Markets reached new highs last weeks, and the S&P 500 came within 2 points of the 1870 target we had put out.
With a lunar red period set to start this week, we have to watch out on the downside.
Here is the current Nasdaq chart (click for larger image):
The Nasdaq keeps working its way up in a narrow trend channel. We are very close to the upper boundary, so upside is very limited at this point. Technically, the Earl and MoM indicators have turned down from significant peaks. The slower Earl2 is still looking upwards, but would probably also turn down if the market gets spooked by the events in Ukraine. With this technical setup and a lunar red period starting I prefer to be on the sidelines until some bottom is seen.
Our LT wave indicator is also not boding well for March (click for larger image):
In February the market did better than I had expected on the basis of the LT wave. But it wasn’t all wrong. The S&P bottomed on February 5th, two days before the lowest LT wave value of the month, and then rose until the end of the month. A peak LT wave value fell on the 27th, and it looks like that was just one day before the actual market peak.
The month of March has started with a weekend, and after that we see a period of weakness in the LT wave until March 25th. The last week of March looks very strong again. Remember, this LT wave is experimental, so use with the necessary caution.
Good luck,
Danny
LunaticTrader 