It looks like we are ending the year very close to the high targets we pointed out in late November.
4200 for the Nasdaq, 1850 for the S&P 500, and 16500 for the Dow Industrials are important top targets based on some of my methods and also happen to be the level of overhead resistance lines right now. So, the question becomes: what is going to take the market higher from here?
Here is the current chart for the S&P 500 (click for larger image):
We have another week of lunar green period to go, but the S&P is bumping into resistance around 1850.
Technically we see the Earl2 turning up from a shallow bottom, but the Earl and MoM indicators have climbed into overbought territory already. This means we shouldn’t be surprised to see another correction start fairly soon.
Based on the LT wave chart for January (posted below) the market is expected to be strong until the first trading days of the month, but then followed by weakness for the rest of January. This suggests to me that 2014 will probably start with some profit taking after the huge gains of 2013.
The LT wave chart for December was right on the money. We got the dip in the middle of the month, followed by positive performance in the final weeks.
For next January 2014 our LT wave chart looks like this, showing December-January (click for larger image):
Based on the wave we can expect market strength to continue until January 4th or 5th, and then a prolonged period of weakness. The final days of the month look better again.
Many investors may enter the new year with great expectations, knowing that January tends to be a good month for stocks. But according to the LT wave we are setting up for a rather disappointing January.
Happy 2014 to all our readers,
Thank you for another year of great imput
And I see my SA level on twitter… more thanks
Wishing you a prosperous 2014.
A happy New Year to you and your family as well.