LunaticTrader

Investing with the Moon

Is it a lemming market?

Posted by Danny on May 13, 2013

Markets have added to gains, and it is now clear that we enjoyed a very strong eclipse green period.
We will be entering a new lunar red period this week, so this could be an important juncture.

Here is the current chart of the Nasdaq composite index (click for larger image):

Nasdaq

The breakout to the upside is now clearly visible and the Nasdaq is even overshooting its recent trend channel to the upside. As if that trend was not going up fast enough.
There are bull markets and bear markets, and then there are lemming markets. Bulls and bears take a good rest once in a while, or waver a bit.. But lemmings are different, they go on as if there is only one way to go, and they just continue until there is some nasty fall. That’s how this market is starting to look.

My Earl2 indicator has turned up and crossed the red line to the upside, indicating that the recent period of sideways pause is over. But, my shorter term Earl is turning down already, pointing to an imminent correction that can start any day. Given the lunar red period that is about to start, I think we will give back some of the recent gains before the end of this month.
Most likely target is 3300-3350. Then a new leg upwards could start from those levels, but we will need to monitor very carefully if this is a lemming market. The fall can come unannounced.

Busy those days, so only getting out my weekly updates. But stay tuned for more charts and materials later this month.

Danny

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2 Responses to “Is it a lemming market?”

  1. marlowe said

    Danny,

    Having read you solar flare post, am curious if you have any thoughts on the X-class flares Sun night and Mon morning? Would seem to reinforce your drop before end of the month. Also wondering if there is any significance as to whether an X-class occurs during a lunar red or lunar green period.

    • Danny said

      Hi Marlowe. The solar flares only affect us to the extent that we get hit by the solar wind it generates (from CME), which gives us geomagnetic storms. The X-flares over the weekend were mostly on the other side of the sun and not pointed directly to us.
      Generally, geomagnetic storms during lunar red periods will add to downside pressure on stocks, while storms during green periods may only produce a temporary halt in a rising market.
      In most cases the effect from geomagnetic storms is weaker than the lunar cycle. But there are exceptions.
      Extremely strong X-flares, when knocking out satellite and other electric systems, could do serious economic damage, and then one could expect a market reaction regardless of where you are in the lunar cycle.

      Danny

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