Markets enter the week in a nervous mood. Standoff situations in Ukraine and Greece seem to be reaching another climax and energy prices remain very volatile. What’s not to like? Two weeks ago I wrote about the market getting ready for a push to new highs. Is this the wall of worry that is typically seen before a sudden surge higher in the stock market? Let’s have a look at the Nasdaq chart (click image to enlarge it):
We will be starting a new lunar green period this week. That doesn’t guarantee upside action, but it means the odds for some kind of rally are quite good. Technically we also have a setup that can give us a sudden push to new highs. The Earl2 indicator (orange line) has bottomed out and the faster Earl (blue line) shows a building up-trend with further room to rise. All is ready for a move towards 5000.
Could the move be aborted still? Of course, that’s always possible. Given that we have a quadruple bottom at 4550 means it would probably get pretty ugly if that level gets broken on a fifth try. So, we watch that level very carefully. But it remains a bull market until proven otherwise.
Stay tuned,
Danny
LunaticTrader 