We got a flat week as expected. The Nasdaq is sitting right below 5000, and the S&P 500 stopped just short of the 2120 resistance level we mentioned two weeks ago. What next?
Let’s have a look at the S&P 500 chart (click image to enlarge it):
We have another week of lunar red period to go. So far it looks like a very normal pause in an ongoing rally. Technically, the Earl indicator (blue line) is entering the bottom area but not turning up yet. The slower Earl2 (orange line) keeps climbing, suggesting further gains ahead. It is probably too early for the next leg higher, so another flat to down week is the most likely scenario. If so we will be set for a climb towards 2200 later this month.
The LT wave chart for March looks supportive as well (click image to enlarge it):
In February we got strength into the peak near the 21st, followed by a weaker final week. For March we see a similar picture. Further hesitation in the first week, followed by two weeks of strength. If the market is to climb to new record highs, then this is the time to do it. The final week looks weaker again. The lowest value of the month is on the 14th, but that is again a weekend day. Highest values are on the 21st and 22nd, which are also weekend days. That can push out a possible high to 23rd or even 24th.
Good luck,
Danny
LunaticTrader 