Getting ready to buy with both hands

Couldn’t post yesterday, so I am a bit later than usual. The lunar green period just ended with a 176 points loss for Nasdaq. The last four lunar periods have gone against the normal tendency. Some people call that a “cycle inversion”, I think that’s just a beautiful name for “didn’t work”. Lunar cycle traders have been spoiled all year long, and now we have some give-back. It is normal.
Markets have been very nervous going into an anticipated rate hike. That probably sets us up for a nice Santa rally, because who will be left to sell a few days down the road?
In my November 9 post I warned for a 4 to 6 week pullback, and two weeks later I repeated the call for S&P to stay in the 2000-2100 range for several weeks. That’s what we got and now the indicators are slowly getting in line for a bottom. Here is the current Nasdaq chart (click image to enlarge it):


We are starting a new lunar red period, so stocks could remain under pressure for some more days. All 3 my main indicators are getting low but not bottoming out yet. If we get more downside action then 4800 is the next major support. And the 2000 level is important on the S&P 500. I think the market is getting ready for a big swing to the upside, regardless of what the Fed does, but timing the start of the move could be a bit tricky. It could surge higher all of a sudden, or it could languish another week until the indicators start turning up. Anyway, be ready to buy as soon as MoM turns up for S&P 500 and Nasdaq. I am posting my reversal levels for major stock indexes and gold on Twitter every day, and the tables include the MoM indicator

By Dan

Author of LunaticTrader and Reversal Levels method. Stock market forecasts based on proprietary indicators, seasonal patterns and moon cycles.

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