Posted by Danny on August 8, 2016
Stock markets kept pushing higher and the recent lunar green period added 121 points to the Nasdaq. Will there be no letup?
Of course the market cannot keep climbing without any pullbacks, so we will get a letup and probably sooner rather than later. Lunar cycles have not done well so far this year, but the recent green period could mark the return of some normalcy in that department. A new red period is getting underway, so we will find out soon. Here is the current Nasdaq chart:
The Nasdaq has come very close to its all time high and may break it any day. But my technical indicators are indicating potential problems. The faster Earl (blue line) keeps weakening and may paint a bearish divergence soon. The slower Earl2 (orange line) is flattening out and may turn down any day. The MoM is starting to pull back from a major peak in the +8 euphoric zone. That’s not a setup I want to buy, especially not when a new lunar red period is starting.
The LT wave for August is also indicating weakness after a possible top today (+/-1 day).
I wouldn’t be too greedy at this point. It has been a great rally over the last 6 weeks, but trees don’t grow into the sky. I will take some profits here and then see when the next buying opportunity comes along.