LunaticTrader

Investing with the Moon

Getting to Dow 20k

Posted by Danny on December 19, 2016

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:

sp500-daily-4_10_2015-12_16_2016

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.

Post a comment (disagreement also welcome):

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

WordPress.com Logo

You are commenting using your WordPress.com 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 )

Google+ photo

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

Connecting to %s

 
%d bloggers like this: