Still grinding higher
Posted by Danny on September 7, 2016
Markets have held very steady and the Nasdaq reached new all time highs yesterday. The S&P 500 is just short of new records.
The recent lunar green period ended with a 12 point gain for the Nasdaq and we are now in a new lunar red period. The red periods have been unusually strong so far this year, but that will end eventually and make place for the weakness we normally see in red periods. A quick look at the S&P 500 charts shows the current technical situation:
The Earl and MoM indicators are turning up from shallow bottoms. This means the sideways consolidation may be ending and another leg higher could start. But the slower Earl 2 (orange line) is still headed lower, which points to more downside or sideways action before we get another sustainable rally. Mixed signals means we better be careful in the coming weeks. There isn’t much of an edge in either direction for short term trades at the moment, so it is better to wait for a more attractive set up.