LunaticTrader

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Posts Tagged ‘LT wave’

LT wave for August

Posted by Danny on August 2, 2018

Our LT wave had a mediocre month in July.

Expected weakness until the 10th did not pan out, with the market breaking out to the upside on the 6th already. Expected strong period until the 22nd did work out but extended well beyond that date with S&P 500 peaking on the 25th before projected weakness started kicking in. Not a terrible month, but the timing was off by several days.

Here is the LT wave chart for August:

ltwaveAug2018

The wave projects ongoing weakness until around the 7th followed by a stronger period until the 17th. The second half of August is expected to be weaker again. The patter is quite similar to the LT wave for July.
Highest daily value comes on the 12th, with lowest values on the 5th and 20th. If the mid-month strong period does not produces a new high (> July high) then the subsequent weak period could be more damaging than the LT wave suggests. Weak periods have mainly given us sideways action in the recent month. That would probably change if we get a lower high and more bearish sentiment.

Good luck.

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LT wave for July

Posted by Danny on July 3, 2018

Markets have been sputtering in recent months, but long term up trends stay intact. The Nasdaq has already climbed to new all time highs and is closing in on the 8000 mark.

Here is the current chart:

^COMP (Daily) 9_12_2016 - 7_2_2018

As long as the trend line is not broken it is too early to declare a top in this market. The Earl indicator (blue line) is turning back up after the recent week’s pullback. This suggests a new upswing could be starting. But the slower Earl2 (orange line) is still going down, which means new highs may have to wait at least a little bit. The MoM indicator is also trying to paint a bottom, so the setup suggests a rally attempt in the next few weeks.

Our LT wave did a reasonable job in June. Suggested weakness in the first week did not pan out, but the month’s high came very close to the 14th and the final weeks were weak again, as expected. Here is the LT wave for July:

ltwaveJul2018

The projected pattern is quite similar to last month. Expected weakness until around the 10th, followed by a stronger week and renewed weakness after the 22nd.
Lowest LT wave values come on the 9th and the 30th. The highest value is expected on the 17th.

Good luck.

Posted in Market Commentary | Tagged: , | 5 Comments »

LT wave for June

Posted by Danny on June 1, 2018

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:

ltwaveJun2018

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.

Posted in Market Commentary | Tagged: | 7 Comments »

LT wave for May

Posted by Danny on May 1, 2018

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:

^SP500 (Daily) 6_30_2016 - 4_30_2018

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:

ltwaveMay2018

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.

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LT wave for April

Posted by Danny on April 2, 2018

Markets are going through another significant downswing. Volatility has been high compared to what traders got used to in 2017. This was of course inevitable, and it is something I was watching as an indication that we are getting into the late stages of a multi-year bull market. See: Updated long term scenarios and charts.

So, what’s next? Here is the current Nasdaq chart:

^COMP (Daily) 6_14_2016 - 3_29_2018

The long term blue trend line in Nasdaq is clearly broken. But the Nasdaq is still in a higher highs and higher lows sequence, so it’s too early to declare the end of the bull market in this index.
The Earl (blue line) is turning up from a major low. The slower Earl2 (orange line) is still dropping fast, but well into bottom territory. The MoM indicator has fallen into the blue pessimistic zone (<-5), where major buying opportunities are usually found. Once the MoM turns back up we will have a nice setup to do some cautious buying here.

If major indexes drop below their February lows, then more bearish scenarios would gain traction. That wouldn't rule out new record highs later on, but it would probably push them further back in time.

Our lunar cycle has been on fire so far this year, so that's something to keep an eye on as well. A new green period starts later this week, so it will be interesting to see if it keeps rolling on: lunar cycle tracking page.

Our LT wave did a decent job for March. The peak early in the month came with several days delay, but the subsequent weak period ended on target at March 26.
Here is the LT wave for April:

ltwaveApr2018

There are no outstanding peaks or lows in the projection for April, which suggests volatility will drop. We see a period of mild weakness until the 12th, followed by a more positive bias for the remainder of April. The lowest LT wave value comes on the 4th, and there is no daily peak value worth talking about.
If the wave holds up then I would look for a low in the first trading days of this week, but probably not a major new low. And then a very gradual recovery that could lift the S&P 500 back to near the 2700 area.
Let’s see.

Posted in Financial Astrology, Market Commentary | Tagged: | 2 Comments »

LT wave for March

Posted by Danny on March 2, 2018

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:

ltwaveMar2018

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.

Posted in Market Commentary | Tagged: | 2 Comments »

LT wave for February

Posted by Danny on February 5, 2018

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:

^SP500 (Daily) 4_27_2016 - 2_2_2018

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:

ltwaveFeb2018

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.

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LT wave for January

Posted by Danny on January 2, 2018

Markets have continued to trade in “painless” fashion, just grinding higher without corrections worth talking about. Naturally this will not continue forever and it may end sooner rather than later. Here is the current Nasdaq chart:

^COMP (Daily) 3_18_2016 - 12_29_2017

The latest all time highs came just before christmas. As long as the blue trend line stays intact there is no problem, but once it gets broken a significant correction will be highly likely. The Earl indicator (blue line) has turned down again, indicating a downturn may have started a week ago. The slower Earl2 (orange line) has been weakening for several month already. This is still not a setup that wants me to do more new buying. The risk/reward ratio is just too poor here.

After weak performance for November our LT wave for December has been close to perfect. Here is the LT wave for January:

ltwaveJan2018

Expected weakness until Dec 5 was right on the mark and followed by a market advance throughout the expected strong period until Dec 22. Weakness in final week came true as well. Doesn’t get much better.
For January the LT wave projects strength until around the 10th followed by weakness for the rest of the month (with some possible bounce around the 20th). Highest LT wave value comes on the 7th with the lowest coming on the 25th. If we do not see new record highs in the first 10 days of the month then the bull run may be over and the rest of January could be down sharply. We really need to watch the long term trend line (see chart above) in that case.

Posted in Financial Astrology, Market Commentary | Tagged: | 2 Comments »

Higher it goes

Posted by Danny on December 4, 2017

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:

^COMP (Daily) 3_10_2016 - 12_1_2017

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:

ltwaveDec2017

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.

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LT wave for November

Posted by Danny on October 30, 2017

Stocks have reached new record highs. But bullish participation has started to weaken again ( see Outlook for week of October 30). A shrinking number of stocks is carrying indexes higher and that’s always something to keep an eye on. Let’s have a look at the Nasdaq chart before sharing the LT wave for November:

^COMP (Daily) 2_16_2016 - 10_27_2017

The Nasdaq keeps moving within a nice channel it has been occupying for most of the year. Friday’s jump has taken the Nasdaq to the upper bound, but this is not a breakout that suggests upward acceleration.
My indicators are showing red flags as well. The Earl (blue line) shows a bearish divergence, while the slower Earl2 (orange line) has peaked and turned lower. The MoM is also on a downward trajectory after peaking out near the 8-euphoric zone. While none of this presents obstacles that cannot be overcome, it is not the kind of setup that prompts me to do fresh short term buying.

Sometimes the best strategy is wait and see. This is an aging rally and there has been no pullback worth talking about for more than year. If investing was always this safe and easy then nobody would be working.

October was not a good month for our LT wave. Expected weakness early in the month did not pan out, but projected strength in the 3rd week came right on target. Markets pulled back from record highs in the final week, when the wave suggested new weakness. But that didn’t carry on and the index bounced right back in the final days. Here is the wave for November:

ltwaveNov2017

Weakness is expected until the 7th, with lowest LT wave values of the month coming on the 6th and 7th. If that brings a market low then a rebound should follow until the 17th or 20th. The final 10 days of November look weak.
Remember the LT wave is experimental, so do not bet the bank on it.

Posted in Financial Astrology, Market Commentary | Tagged: | Leave a Comment »

 
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