US stock markets are trading in a large sideways pattern since February. But lunar cycles keep doing well in this environment.

The LT wave did a good job in May. Lows of the month came in the first week as expected and a stronger period followed. Projected weakness in the final days of May came right on target. It doesn’t get much better.
Here is the LT wave for June:

June is projected to start with weakness until the 11th with lowest LT wave value coming on 11th. Then we should see a stronger period until the 22nd. The highest LT wave value comes on the 14th. The final week of June is considerably weaker again.

In this type chart we pay most attention to the general direction bias, not so much the absolute levels. For example on June 14th the LT wave peaks above the LT wave highs of May, but that doesn’t mean the market will be higher. If stocks decline considerably in the weak period until the 11th then I would expect only a rebound that stops short of the May highs. If on the other hand the market holds up very well until June 11th then there is a very good chance stocks will break out above the May highs in the subsequent strong period.

Then there are always months when the expected pattern doesn’t show up at all. So, use the LT wave with a healthy skepticism. Last month’s result doesn’t guarantee anything for the next month.

Stocks have largely gone sideways in the recent month. It remains unclear whether the next major move will be up or down.
Here is the current S&P 500 chart:

Technically the Earl (blue line) peaked out in mid April and has come down to the neutral line. No signs of a bottom.
The slower Earl2 is still climbing, but appears to be flattening out near the neutral line. And the MoM indicator is also in the neutral zone. None of this offers us any clues about the next move, so all we can do is wait.

It’s time for our LT wave for May:

The wave did pretty well in April. Expected weakness until the 12th saw the index hover near support just below 2600. The more positive bias for the remainder of April saw the market test the 2700 levels as we expected. Volatility did clearly drop, so that was a good call too.
For May the wave projects another weak period until around the 11th. This is to be followed by a strong period until the 28th. The final days of May show weak again.

Just a quick message today to get out the LT wave.

Our wave did OK in February.
The month was as volatile as the wave projected and the major swings lined up with the wave pattern more often than not. Expected strength around the 5th did not show up, other than one good rebound day on Feb6, and the market declined straight into the expected bottom value on the 11th (which was a Sunday). This was followed by a strong week right into our expected peak on the 17th. Weakness in the 3rd week came in the form of sideways churning and then we got a few good up days in the last week. The final days of February did not show expected strength and this means March is starting on a weak foot.

Here is the LT wave for March:

A strong period is projected until around the 5th and followed by a prolonged weak period until the 26th. The final week of March looks better.
Peak LT wave values come on the 3rd and the 28th. The lowest value of March comes on the 12th.

Good luck.

Markets have finally started a pullback. We did get a 1% down day for first time since August and we also got a 2% down week for the first time since Sep 2016. This means we are starting to see more volatility, but that doesn’t mean this bull market is over already. See my recent article.

Here is the current S&P 500 chart:

No major trend lines have been broken so far, but all my indicators are pointing down now. The Earl (blue line) peaked out a week ago and is dropping fast. The slower Earl2 painted a major peak a few days ago and is nowhere near bottom territory. The MoM indicator has also turned down after reaching the maximum euphoria +10 for a few days. This is not how a good buying opportunity looks like, but we are entering a lunar green period and I do expect some strong rebound days, but probably not new highs any time soon.
I would just wait for the dust to settle and once my 3 indicators start bottoming out we can look for new buying entries.

The LT wave did poorly in January. Expected strength in the first weeks panned out ok, but that strength continued well into the projected weak period. Those gains were given back in the last week, so it wasn’t too bad after all. But the timing of peaks and bottoms didn’t match.
Here is the LT wave for February:

It looks very volatile with alternating stronger and weaker weeks. Peak LT wave values come on the 5th and 17th. And the bottom values are projected around the 11th and the 23rd. I have no idea how this will pan out. The market may just dance around within the wide range that is set by the recent January high and the possible low that we get in early February.

Markets have burst higher in recent weeks, taking most major indexes to new record highs. Does this mean the market has nowhere to go but up? Maybe. We will have a look into that question later in this article, but let’s have a look at the Nasdaq chart first:

Instead of threatening to go down the Nasdaq is breaking out above the red channel it has been occupying most of the year. The longer term up trend remains firmly in place. If anything stocks are accelerating here. But how much longer?
Some warning signs remain in place. There are bearish divergences in the Earl (blue line) and Earl2 (orange line) that do not go away. This has been a painless advance for such a long time now. Some investors will probably panic as soon as we get a 5% drop from the highs some day. I would rather wait for that panic to do any new buying. But we may have plenty company when it comes to waiting for a >3% pullback.

Our LT wave for November did very poorly. It could hardly be any worse, actually. Markets climbed when we expected weakness and fell when the wave indicated strength. Will that continue to be the case? I have no idea. Here is the wave for December:

Weakness is projected until Dec 5, followed by a stronger period until the 22nd. The final week of the month looks weak again. This means that if we see no downside action in the next couple of days the market could just continue to march higher into xmas. And with very thin trading in the final week of the year it remains to be seen how that expected weakness will pan out.
Personally I will rather watch from the sidelines until our cycles get into gear again.

Markets have crept to new record highs. But is it a convincing breakout? The S&P 500 stays within its narrowing range so I would still keep my powder dry here. One or two down days could easily wipe out a full month’s gains, that’s how slow the recent advance has been. Let’s have a look at the Nasdaq chart:

The Nasdaq has climbed and closed above 6500 for the first time. But it has taken more than two months to get 1% above its late July highs. My indicators are unimpressed with this move. The Earl (blue line) and MoM are near the zero line and nowhere near the highs they reached in recent months, which is a clear bearish divergence. And the Earl2 (orange line) is flatlining just above the zero line, completely negating last week’s push to new record highs.

While this doesn’t rule out a further climb it is not the kind of setup that prompts me to buy or stay heavily long. Sometimes you just have to watch and wait and this is one of those times imo.

Our LT wave did a mixed job in September. Here is he wave for October:

Expected weakness until Sep 9 panned out nicely and was followed by a stronger period with a market peak around the 21st as projected by LT wave. But subsequent weakness did not materialize and stocks climbed to new highs in the final week.
For October the wave suggests weakness until the 13th and then a stronger week with a peak value near the 19th. The final week shows a drop again with an expected low near the 27th.

Markets have been jumping higher in recent days and are close to new highs again. This is rather unexpected given the current lunar red period and goes against the projected weakness per our LT wave. What to make of this? Here is the current S&P 500 chart:

The crucial support at 2400 has held easily and my indicators are pointing up. This paves the way for a possible test of the 2500 level in the coming weeks. But this could also be a fake-out move before a bigger downturn. If a lower high gets printed here then it will not look good and the 2400 level may get tested again.

Our LT wave was partially successful in August. Here is the projected pattern for September:

Expected weakness in the first half of August came right on target and the low on August 10 gave us a significant down day. But weakness continued longer than expected. The projected high on August 23rd was only a weak rebound and strength also stretched longer than expected with the best days coming at the very end of the month. So it looks as if the cycle is getting delayed by a few days. I don’t know if that will continue to be the case.
For September some mild weakness is expected until around the 9th, followed by a stronger period with an LT wave peak value on the 21st. The final week of September shows renewed weakness with a bottom value on the 28th.