LT wave for June
Posted by Danny on June 2, 2014
We just ended a very solid lunar green period with a 152 point gain for the Nasdaq. The S&P 500 reached the 1920 target level we mentioned last week and the Dow Industrials is close to new all time highs again. Can the market break convincingly into new high ground this summer?
Let’s have a look at the Nasdaq chart for the current technical setup (click for larger image):
The Nasdaq has climbed to 4250, which matches the January highs, in what could become the right shoulder in a classic head and shoulders pattern. Earl indicators still look bullish but are starting to look toppy. With a new lunar red period now getting underway I think the market will give back some of the recent gains. The LT wave chart (see below) also suggests a rather difficult month of June. First downside target is around 4100, where support should be met. If that level doesn’t hold then 3800-3900 becomes possible in June-July.
Here is the LT wave chart for June (click for larger image):
The wave functioned well in May, correctly indicating market lows on the 7th and 15th. For June the LT wave suggests a rather extended period of weakness that should start early in the month and last until approximately June 24th. Last week of the month shows strength again. Remember, this LT wave chart is experimental, so use with the necessary caveats.