LunaticTrader

Investing with the Moon

Watching out

Posted by Danny on March 11, 2013

The stock market has produced a nice swing to the upside in our current lunar green period.
But that green period is about to end later this week, so we could be seeing the end of the rally in the coming days.

Here is the chart for the S&P 500 (click for larger image):

S&P 500

The S&P 500 has risen by 200 points since last November, and as you can see on this chart, the move is nicely contained within a narrow channel. But this rate of change can normally not be sustained for a long time, it would take the S&P to 2000 by the end of this year.
So, we are very likely to see the market fall out of this steep channel within the coming months.
And when it does so the decline will be of a bigger magnitude than the brief pullbacks we got in late December and February.

Our Earl2 indicator has been signalling an impending top for a while and continues to do so. Meanwhile the shorter term Earl is now also in position to create a top and turn down.
Any drop below 1510 would now signal the probable end of this 4 month rally.
This means I am doing some serious reductions in my stock portfolio this week (I already sold some last week).

In the best case we will be going sideways for some time, but my guess is we will see the S&P at 1450 before we see 1600.
And if I am wrong, then I can always re-enter the market on a break above 1600.

Good luck,
Danny

 

Enhanced by Zemanta

7 Responses to “Watching out”

  1. roni said

    hi danny
    i dont understand ” But this rate of change can normally not be sustained for a long time, it would take the S&P to 2000 by the end of this year.”…..should expect to 2000 this year or not cause we gonna get down soon at the S&P ? tnx

    • Danny said

      Hi Roni,

      Isn’t the very next sentence already answering your question:

      “So, we are very likely to see the market fall out of this steep channel within the coming months.
      And when it does so the decline will be of a bigger magnitude than the brief pullbacks we got in late December and February

      If I were expecting a rise to 2000 this year, then I wouldn’t be selling..

      Danny

  2. pjsmitnl said

    have you seen this Fend Shui chart of CLSA brokerage , check there website

  3. roni said

    looks intersting tnk u pjsmitol

Post a comment (disagreement also welcome):

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: