Up it is
Posted by Dan on October 21, 2013
Markets were off to the races last week, with several indexes jumping to new high territory.
We expected a bit more downside action, based on our lunar phases and the technical picture, but that couldn’t have been more wrong. This suggests the path of least resistance remains to the upside.
So where do we go next?
Let’s have a look at the chart for S&P 500 (click for larger image):
The S&P is breaking out to the upside and all my technical indicators are now pointing up with more room to run. We will be starting an eclipse green period later this week, and eclipse green periods have a positive expectation historically, so I am looking for more upside action.
It is increasingly likely that markets will end the year near the highs. I would look for 1800+ on the S&P, 4000+ for the Nasdaq and 16000+ for the Dow.
Things will not continue to go up in a straight line, but I think the next significant correction is now likely to come in early 2014. More on that later.
I am working on an article about longer term cycles, which I hope to finish later this week.
So, stay tuned,
Danny
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KR said
Danny, Mercury retrograde starts this week, usually associated with violent swings in the market. I know you usually like to not crowd it with too many indicators. My guess is you probably don’t consider mercury rx. But if you do, please share your thoughts on how you see that playing with the generally uptrend momo in the market. Thank you.
Danny said
Hi KR,
Thanks for asking.
I did some research on the Mercury cycle, so I will use the opportunity to post an article about it later today, as I get that question from time to time. The short answer is: I don’t use Mercury retrograde, because it has not shown a consistent effect either way on the over 100 years of stock market data I used in my testing. See article for details.
Danny