Time for a rally

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.

Good luck,

By Dan

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

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