The market kept climbing last week and didn’t stop for any of the resistance levels we had expected. It’s also not bothering about the current lunar red period. What’s going on?
Maybe we are seeing the first positive red period in almost a year. And that would be an indication that the market is starting another leg higher in its multi-year bull market. It will be more clear by the end of the week. Let’s have a look at the S&P 500 (click image to enlarge it):
The S&P is back within the range it held from February until August. The next major overhead resistance is now at 2100-2130. The Earl (blue line) has dropped a bit but appears to turn back up. We could be going to a bearish divergence in this indicator. The slower Earl2 (orange line) is still going up but getting very high. This looks like a market that is more than ready for a pause, so I don’t think there is much upside left at this point.
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Bitcoin quietly gave a weekly buy signal in our weekly reversal levels a few weeks ago. In my previous articles on bitcoin I was rather bearish: What will replace bitcoin? and Bitcoin price targets, but now could be a good time to turn bullish. Here is a long term icebergs chart for bitcoin (click image to enlarge it):
For the first time since late 2013 we see some significant bullish energy (green) enter the picture. In 2013 the rallies ended in massive overheating (red lava) followed by major corrections. My downside target of $180 was reached earlier this year and a nice base has formed just above $200.
A very long period of “floating ice” has just ended and bitcoin is slowly heading higher. How high can it go? I don’t know, but with this chart $500+ is certainly not out of the question.
As I wrote in 2013, the value of a crypto-currency will start to depend on real intrinsic value that becomes tied to it in some way. It is now clear that this can also be the value of services that are being connected to blockchain technology. This is starting to happen with Bitcoin and also with newer implementations like Ethereum.
Danny
LunaticTrader 
People say this every year. If it was to break into the mainstream it wont be next year. Maybe in 3-5 years but not any time soon. Bitcoin has been moving very slow for over a year now and unless some massive corporation or industry gets on board it’ll probably be another slow year.
Hi,
Bitcoin was at $280 when I wrote this article. It’s now at $430, so up more than 50% in 4 months. Most people would not consider that slow moving…
Danny
this guy who is very accurate => http://www.bit.ly/1S7sxxs
he says market may have cycle bottom, but crude will go down some more.
I think with QE crack on toast, europe might be a good place to invest at the moment. Italy, spain, france, eurostoxx50
Thanks ET