Posted by Danny on February 23, 2015
When I wrote a few weeks ago that the Nasdaq was all set for a move to 5000, I got responses like “Really ??”. But here we are, the Nasdaq gained 212 points in the lunar green period that just ended, and the 5000 level is within reach. Of course, we are now entering a lunar red period, so celebrating new records on the Nasdaq may have to wait a little bit.
Let’s have a look at the current Nasdaq chart (click for larger image):
This has been a great move off the January lows. But I think we will get some consolidation just below the 5000 level before marching on in March.
Technically the MoM indicator is reaching the +8 very optimistic range. The slow Earl2 (orange line) is still heading higher, but the faster Earl (blue line) appears to be turning lower already. We may see the 5000 being exceeded this week already, because those psychological barriers do their magic. But a new lunar red period plus an Earl indicator that turns down suggests at least a brief pause in the market first. A few flat weeks would set the stage for further gains in March and April, with 5300+ as a possible target.