Stocks had a strong week and the S&P 500 is coming close to its April highs. We warned for another strong upswing in our post last week, and that’s what we got. The odds for a further rally have improved again, but the April highs are likely to offer resistance on the way up. Here is the current Nasdaq chart:
The Earl2 indicator (orange line) has finally turned back up and that’s a setup that opens the door for further gains. But we have several overhead resistance lines converging around the 5000 level, so I wouldn’t look for stocks to get over that hurdle without some volatility. I expect stocks to keep trading with a positive bias this week, but a sustainable push above 5000-5050 is likely to take more time.
The LT wave for May did a mixed job. Expected weakness in the first week panned out nicely, but subsequent strength until the 18th only produced some sideways action with a few strong up days. Last week’s climb to new highs for the month went against the expected pattern. Here is the LT wave for June:
The wave projects a strong period until 13th, followed by a weaker period until the 25th. The final days of the month are stronger again. Highest LT wave value comes on the 8th, and lowest values are on the 17th and 23rd.
LunaticTrader 