As you may have noticed, I have taken a little break in the last couple of weeks. The year end period is generally not very interesting as there is very light trading volume anyway. I have used the time to relax, and also did some research which I will share with you in the coming weeks. Stay tuned.
Meanwhile the market cycles seem to be getting back to their normal lunar rhythm, as downside pressure has been evident in our recent lunar Red period. We are now starting the year with a new lunar Green period, which suggests that the stock market will be off to a good start.
Let’s take a look at the S&P 500 chart (click for larger image):
My Earl2 indicator has clearly bottomed in early December and is now on the way up. Notice that this indicator typically makes only a few bottoms per year, which usually turn out to be good buying opportunities. My faster Earl indicator is also in bottom territory, which means the market is well set to go up in January. I would look for the market to test the 2012 highs and possibly exceed them early in the new year.
That’s it for now. Stay tuned for my yearly forecasts, due to be ready soon.