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Market on the edge

Posted by Dan on February 8, 2016

Stocks turned down again last week, nicely in line with the LT wave chart for February. The reversal levels stay “double red” for most world markets, and the general mood is becoming really depressed. The Nasdaq chart shows that we are reaching a critical point:

^COMP (Daily)  5_28_2014 - 2_5_2016

The Earl2 indicator (orange line) keeps pointing up. But the faster Earl (blue line) has peaked out and turned down again. This means a drop to lower lows is a very realistic possibility for this index. If so, then the 4200-4250 area should offer major support and be the first target in that scenario. If that level doesn’t hold then the odds that we are in an extended bear market will jump up significantly. A pattern of lower highs and lower lows would then clearly stand out from the chart.

We will also enter a new lunar red period later this week, which may further contribute to downside pressures. So, I would be very careful until the Earl and MoM indicators turn back up again. Keep an eye on my reversal levels, which are shared on Twitter every day.


5 Responses to “Market on the edge”

  1. mike said

    Hi Danny, On Feb 1st post Lt wave expect low for month on Feb 5th then Higher rest of month. Then on Feb 8th something about lunar red developing. Feb 8th lunar chinese new yr. On wed did aunt Janet say anything to cause stockmarket to swing real wild? Do you feel nasdaq oversold or just still unwinding the huge excess of the bullmarket. Is here any key eclipses coming up in near future? Please let me know what you think.

    Thank you,


    • Danny said

      Hi Mike.

      Never expect perfection from the LT wave. The yellow line (which is a 9 filter on the wave) doesn’t get back above the neutral line until the second half of the month. That’s why the green line above the chart is drawn from 15th onwards. 5th was the lowest value of the LT wave, but as you can see in the chart the 11th and 12th form a strong 2nd low, so it’s not so surprising that there is renewed selling pressure.
      What Yellen says is not a factor in my methods or analysis.


  2. lis said

    danny sorry to tell u but LTWAVE crushed as the market u called for botum at 5.2 now we are at 11.2 falling like a rock still

    • Danny said


      Where did I call for a bottom on the 5th?
      The LT wave chart indicated weakness in the first half of the month with the orange line drawn in until the 12th.
      More positive period expected in the second half of the month.
      Can’t we at least wait until the month is over before reviewing how good or bad it has been?

      I wonder why people expect perfection from this LT wave. Every month I repeat that it is completely experimental.
      Personally, I am always surprised if it works half of the time.


  3. lis said

    ;twave failed BIGTIME

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