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):
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
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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
roni said
ok
pjsmitnl said
have you seen this Fend Shui chart of CLSA brokerage , check there website
Danny said
You mean this: https://www.clsa.com/special/FSI/2013/CLSA-FengShuiIndex2013%28YearOfTheBlackWaterSnake%29.pdf
They have been around for some time. But maybe one should wonder why it is so hard to find their previous years predictions on the site.
pjsmitnl said
Yes you are right the have been doing this for 19 years now , but it is just for keeping an eye on , same with Bradley Siderograph chart
Good trading to you all
roni said
looks intersting tnk u pjsmitol