Markets have continued to grind higher and are once again bumping into overhead resistance levels. Can they break out to the upside? We cannot rule it out as we are getting into a new lunar green period. But let’s first take a look at the Nasdaq chart (click for larger image):


The Nasdaq made new highs just above 4200, a target level we have been mentioning for a while. But once again we see bearish divergences in my technical indicators. So, I would remain very cautious even though we are now starting a lunar green period. Sometimes a market decline starts with weakness in a green period, followed by even more weakness in the ensuing red period. The risk to reward ratio stinks at this point, so I prefer to stay mostly in cash until we have a more attractive setup.

If a correction starts, then look for support at 4000 and then 3800.


If you missed out on our forecasts for 2014, you can find them here: http://fourpillarsfinance.wordpress.com/2014/01/17/forecast-for-2014/

Good luck,



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By Dan

Author of LunaticTrader and Reversal Levels method. Stock market forecasts based on proprietary indicators, seasonal patterns and moon cycles.


  1. Hi Danny
    I note South Africa is included this year.
    Thank you
    But the forecast is as useful as my next dentists appointment.
    Actually my next dentists app. gives a date and a time, which is useful info.

    The market has been up 60 weeks and is going to fall .Come on!!

    PS The above is what I was going to post,but it would just antagonize a friend,so I cancelled the comment

    1. Hi Bob,

      I don’t know what friend would be antagonized by what you write.
      You actually seem to get my point: there is little or no use in long term forecasts. That’s the point of the metaphor with the duck hunter I used at the beginning of my forecasts, and also recently in a blog post here:
      Be a market agnostic: https://lunatictrader.wordpress.com/2013/11/18/be-a-market-agnostic/

      Forecasts can be at least as harmful as they can be useful, because when a forecast is believed too strongly it will keep the trader on the wrong foot much longer than needed when the forecast fails. One could call it the “prediction trap”. I don’t want to do that to my readers.
      You can see this all over internet, bloggers forecasting when the market will peak and crash, and as the market continues to rise they just continue to push back their forecast, finding excuses for why it has not crashed yet. Of course, if they repeat the same forecast long enough it will come true eventually. But is that useful? They continue to dish out fundamentals and sentiment indicators to back up their calls, which is probably used mainly to give themselves the courage to stay in losing short positions, and the market just continues to go the other way. Are that kind of forecasts more useful than mine?

      The “forecasts” in my letters and on this blog are minimalistic, and that’s on purpose. I have never more than 60% confidence in any forecasts I make or in any cycle I use. And because I offer my forecasts for free I have the luxury to be vague whenever the outlook is unclear to me.

      Maybe you were hoping that I was going to tell the date and time when the South African market will peak. But I have no idea when the markets will peak. I can make educated guesses just like many others do, but that will still be only guesses.
      The only useful thing I can say about the South African market is that it has been going up for 5 years, and has risen along a trend line with multiple touches. So you can stay long as long as it stays above that trend line, but once it falls below you want to get out, because then a significant drop is likely, with 34000 as a possible target.
      And that’s the information you find in my forecast for South Africa, because it’s the only thing I have to say about it.

      For some people that will be useful, and for others not. But that’s how it goes. Can’t please everybody in life, so I don’t even try.


      1. Dear Danny
        You are the best
        You take criticism and make a positive comment
        Maybe you should become a politician…… secretary of trading.
        kind regards

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