Stock markets remain under some pressure, but overall the pullback is still small. It is amazing how quickly investors’ talk has changed to crash predictions, which makes me think there is more upside to come before we see a more serious decline. Here is the current S&P 500 chart:
The S&P 500 is currently testing major support near 2420. A drop below 2400 would definitely not look good, but as long as that doesn’t happen we better the possibility of another rally here. All my indicators are in the bottom zone but not turning up yet. If the S&P can hold above 2400 for a few more days then the Earl is likely to turn up first, with MoM following suit. But that remains to be seen, of course. We are in a lunar green period and our LT wave goes strongly positive this week. That “should” give us at least some rebound rally and if that rally is very weak then it would be a very bearish sign.
The solar eclipse over the US will gather some attention today, even on Wall Street. I wrote about this eclipse a few months ago, so you may want to check out that article. See also my older article: Eclipses and the Stock Market. Basically, the historic tendency has been for stocks to drop in the lunar red period that comes two weeks before a solar eclipse. The Nasdaq dropped 206 points in the lunar red period that ended on August 11, again confirming that idea. And then the market tends to climb in the green period containing the eclipse itself. We will find out this week if that happens again.
That wouldn’t rule out a further correction or even bear market in September or October, but I wouldn’t worry too much as long as the 2400 level holds in the S&P 500.
LunaticTrader 