Stocks continued upwards last week, and the market seems to be stalling near the resistance levels we mentioned.
We have another week of lunar Green Period to go, so we will see whether it can break any higher.
Let’s have a look at the Nasdaq (click for larger image):
Two weeks ago we mentioned an upside target of 3050 for the Nasdaq. We are almost there and I think we can reach it this week. But I doubt we will get much higher than that. We may well revisit 2900 before we see another rally attempt. This “marking time” mode is likely to end in autumn.
For our chart of week, we take a look at Corn, which has gone to record highs recently. This is a long term weekly chart (click for larger image):
The price of corn has quadrupled since 2006.
Notice how my longer term Earl2 indicator has correctly indicated earlier peaks in 2007, 2008 and 2011 (marked with green arrows).
Right now this indicator is nowhere near these peak levels, which means there is further room to rise in the longer term.
So, it’s too early to call for a top in corn prices.
Good luck, Danny
The market is trading near the middle of the long discussed triangle/pennant that has been forming since Nov 2005. Though eventual gains to the ceiling are still favored (currently at 87.00/25), there is scope for another few months of ranging/consolidating before such a move higher is seen. Note that trade within these patterns is often choppy, the weekly macd is in sell mode (see bottom of weekly chart/2nd chart below), and the market has broken below longer term support at the base of the bullish trendline from May 2011 (currently at 81.25/50, now resistance).