US stocks barely moved last week. I had suggested a sideways period is starting and that’s what we are seeing. How much longer will it continue? Let’s have a look at the Nasdaq chart (click image to enlarge it):
The market is hesitating just below the overhead resistance of this summer’s all time highs. The Earl2 indicator ( orange line) keeps coming down from a major high and is not in bottom territory yet. This suggests we will have to be more patient. The faster Earl (blue line) and MoM are more or less neutral at the moment and still going up. Even though we are starting a new lunar green period I think it will be difficult for the Nasdaq to push much higher already. So further sideways is my base scenario for the coming weeks.
December is coming up, so here we have the LT wave chart for next month (click image to enlarge it):
The wave did not work so well in November. The expected positive bias in the first half of the month failed completely. The low in the middle of the month was not too far off, and the expected neutral period in the final week did come true. It’s a good reminder that we shouldn’t expect perfection with the LT wave.
For December the LT wave stays rather neutral until the 12th, with a slightly positive bias. Then there is a weak period until the 24th. LT wave expects Santa to come in the final week of the year, when the bias goes positive with the highest value coming on the 31st. The lowest LT wave value is on the 20th. If that produces a low in the market then it will be good idea to do so some buying.
Good luck and happy holidays.
Danny
LunaticTrader 