Stocks made some wild moves to start the year. The first lunar red period of the year has ended with a 37 point loss for the Nasdaq. If the cycles stay on track then we are now due for a rally.
Let’s have a look at the Nasdaq chart (click image to enlarge it):
The Nasdaq has dipped below 4600 twice in the last 3 weeks. Each time buyers have come in quickly to push the index back up. Technically we now have the Earl indicator rising up from a bottom and Earl2 is also back below zero, but not turning up yet. The MoM indicator seems to be bottoming out as well. This is not a bad setup at the start of a lunar green period, and a rally towards 4900 is in the cards if all goes well.
A failure to get to new highs in the coming weeks would not bode well, and a drop below 4550 would look particularly ugly.