Markets turned down again last week. Potentially this paints a failed breakout in the Nasdaq, which surged to new all time highs last week but didn’t see any other major index follow in its footsteps. We remain in a lunar red period for another week, so a pullback was not unexpected. Now it is important to watch how deep this latest pullback will cut. If major support levels are broken things will not look good heading into autumn.
Some readers may wonder: last week you were talking about Dow 20k in August, and now you think stocks are headed down? Well, it’s always important to remember that investing is more about observing than forecasting. Working out possible scenarios of how the market will move next can be useful but has to be matched with unfolding reality at all times. If observed market action is no longer consistent with a given scenario, then I discard it or at least assign much lower odds to it. A climb to Dow 20k is still possible, but the odds if it happening in August is declining rapidly now. The basic condition for a new rally to start is the S&P 500 climbing above 2150, and that isn’t happening yet.
Let’s have a look at the Nasdaq chart (click image to enlarge it):
The Nasdaq has quickly turned back from the 5200 level and is now testing support levels around 5090. Technically the Earl (blue line) and MoM indicators have turned down from significant highs. The slower Earl2 (orange line) is going up and breaking above the zero line. The Earl2 has struggled to get above zero since late March, so a continued rise would be a positive. But for that to happen the Nasdaq has to stabilize at current levels as soon as possible.
With the Earl and MoM coming down a further drop is easily possible and downside targets are 4950 and ~4750 if we get a more prolonged slide.
For the fans of my reversal levels, check out the latest weekly levels: http://www.reversallevels.com/2015/07/wrl-july-25.html
The daily reversal levels are available on Scutify as premium content every day: https://www.scutify.com/profiles/LunaticTrader
LunaticTrader 
Thanks Danny
The export option would make the data points portable. Looking forward to the new version. Any ETA ? Will the new version be priced the same?
Hello Danny, contemplating purchasing the lunatic trader software. Would you consider an export option in the software of the date / time data points, to a text or csv?. moon phases, moon void and moon changing signs with date times would be very useful too.
Thanks for asking.
I am working on a next version which will include the LT wave and other improvements. I also intend to keep the program easy to use.
It is not my intention to make this into a full blown astrology program with data exports and so on. There are plenty of sources (also free) where moon phases and any other astronomical data can be found in various data formats, so I don’t think it makes sense to recreate that kind of functionality in this program. E.g. Void moons or moons changing signs is not considered anywhere in my work, so adding it in would only confuse some users. The focus will stay on practical info for traders.
When new version is ready it will be announced on the blog here.
Ideas remain welcome as always, but I can’t promise all suggestions will be used.
Danny