Getting to Dow 20k

Markets had a fairly flat week and a few attempts to push the Dow above 20k have come up short. The recent lunar red period ended with a 181 point gain for the Nasdaq and we are now starting a new green period. That would normally get us above 20k, but the green periods have been weak all year so that isn’t helping much. Let’s have a look at the S&P 500:


This index is bumping into a few overhead resistance lines. There is also a bearish divergence appearing in my Earl indicator (blue line), which is an early warning sign. The slower Earl2 (orange line) keeps going up, but may be nearing a top as well. The MoM indicator is still in the +8 very optimistic zone.
All in all the lunar green period and the slower year-end trading could be enough to push the S&P to 2300 and the Dow above 20k. But that is not a given and would probably be followed by a slow start in 2017.
A choppy market for the rest of the year would be healthier. Stocks could catch some breath and that would give us a nice setup going into January.
I don’t know what will happen, but with most of my indicators looking rather stretched I am going to trade cautiously until those readings come down to more neutral levels.

By Dan

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

Leave a comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: