Markets took a serious turn down last week, and most major indices have now fallen through important support levels.
With another week of lunar Green period to go, I think we will see a rebound attempt that takes us back up to these old support levels.
Let’s have a look at the Nasdaq (click for larger image):
The uptrend line was clearly broken, and next major support is now to be found in the 2700-2800 area. So, if we see a rebound move this week then I would use it to reduce long positions.
My Earl2 is well below zero, but not showing any signs of bottoming yet.
As chart of week I am pulling up a longer term chart for gold (click for larger image):
This is a weekly chart. Gold has broken out of a one year consolidation period, just like it did in 2009. My Earl2 indicator is nowhere near peak levels, suggesting that there is more upside potential. Even though gold has been in a bull market for 14 years already, the chart suggests we are ready for another leg upwards. This market must break above its all time highs before the end of 2013, if it is to stay within its long term uptrend channel. I would set a target of 2400 with a stop-loss level around 1550.
Good luck, Danny