To the summit
Posted by Danny on August 5, 2013
US markets have pushed into new high territory once again. Many other indices are close to doing so.
With another week of lunar green period to go, we are in the position where we could get to an important peak.
Here is the Nasdaq chart (click for larger image):
Major overhead resistance is around 3770, about 2% above current levels. A 2% advance would also put the S&P 500 near 1750, and the Dow Jones above 16000, major targets we discussed recently.
From the perspective of my Earl indicators, we see that the shorter term Earl has bottomed out, while the slower Earl2 appears to be close to a top. If the market rises 2% and then turns down, it will probably paint bearish divergences in both Earl indicators, which typically indicates the start of a correction or bear market.
So, we keep an eye on that.
If we reach these upside targets next week, then I will be cleaning out my portfolio and turn on the second stage of the options strategy I lined out in Why Dow 16000 will be sold