So far so good

The market has continued to edge higher.
We are coming close to overhead resistance levels, so I think the upcoming lunar Red Period will be the start of a pause in the market.
Let’s have a look at the current Nasdaq chart (click for larger image):

The stocks have risen more than 10% since mid-December.
With a couple of Green Period days remaining the Nasdaq could reach 2850. But that’s where I expect some hesitation.
Short term traders can use any strong days this week to take some profit.
This has been a good start to the year.

If you missed our 2012 forecasts then you are still welcome to download your copy here:
http://fourpillarsfinance.wordpress.com/2012/01/19/forecasts-for-2012/

Be well, Danny

Needs follow through

The market is gradually breaking out to the upside.
Now we should look for follow through in the coming weeks.

Here is the current chart for S&P 500 Index (click for larger image):

The market has climbed just above the recent October highs, but seems to be hesitating at those levels.
The current lunar Green Period should allow it to go even higher in the next weeks, at least up to 1310 or even 1350, where stronger resistance would be met.
Any failure to break above 1300 would probably indicate a failed breakout, and then we have to be very careful.
I would keep a stop-loss near the 1230 level.

Good luck, Danny

Looking upwards

The year has started with a mildly positive bias in the stock markets. That’s not unusual.
The lunar Red Period will end this week, so we can start looking ahead for the upcoming Green Period.
Things are looking quite good and we are close the point where markets can break out to the upside.

Let’s have a look at the Nasdaq chart (click for larger image):

A narrowing triangle formation is bound to resolve before the end of the month. Upcoming Green Period favors a move to the upside. Once it gets above 2750, we can go to 2850 rather quickly. That’s where important resistance is likely to be met. So we can any use weak days to establish some bullish positions this week.

If we do not get this upwards break, then the odds for the next move will shift completely to the downside, with 2400 as a probable target. So it is necessary to keep our stop-loss near 2570, and we can even reverse position if that level gets broken to the downside.

Good luck, Danny

Starting 2012

Happy new year to all our readers.

2011 has been a good year for our lunar phases approach.
In the lunar Green Periods there was a 110 point profit, while the lunar Red Periods generated a cumulative 187 point loss in the Nasdaq Composite index.
So, an investor going long in the Green Periods and short in the Red Periods would have enjoyed a 297 points profit last year. That’s about 11% in a year when the markets were flat and most funds lost money.
See our performance page for full details.

Knowing these cycles is a simple tool that can help you achieve better investment returns, without sitting in front of a trading monitor every day.
Check it out on our main website: http://LunaticTrader.com

Let’s have a look at the situation going into the new year.
Here is the current chart for the S&P 500 Index (click for larger image):

As we mentioned last week, the market is probably setting up for a move to the upside. The current lunar Red Period is not creating much downside action so far. If it stays like that then look for the market to rally higher by the middle of this month. Keep a stop loss near 1220, any drop below that level would signal a break down.

Stay tuned for our new annual forecasts, which we hope to finish and announce this week.

Be well,
Danny

Outlook 26 December

This is our last weekly outlook for 2011.
Markets rose nicely last week, pretty much as expected.

Let’s have a look at the Nasdaq chart (click for larger imaage);

We remain in a sideways market without clear direction.
Our lunar Green period is about to end, so we will start the new year in Red Period.
Of course, the thin trading in a holiday shortened week can lead to unusual moves and there may be market participants who try to use it to push the Nasdaq above the recent resistance levels (~ 2650 on the Nasdaq).

We are setting up for a major move up or down, which is likely to start in January or February.
The likely direction of the move is going to be UP.
Be ready to buy if the Nasdaq goes above 2700.
More about this in my upcoming annual forecasts.

Happy holidays.
Danny

Outlook 19 December

We finally got a more normal week.
Our lunar Green Period has started, so this should help generate a bit of a year end rally.
Let’s have a look at the current chart for S&P 500 Index (click for larger image).

The market is trapped in a narrowing triangle formation.
We have room to rise to 1250 here. But I do not expect a decisive move up or down before January.

Have nice holidays, and stay tuned for some interesting new year forecasts soon.

Danny

Outlook 12 December

Markets stagnated near the resistance levels we mentioned last week, and seem to be going down at today’s opening.
We have a few more lunar Red period days to go, but we can start looking ahead for the next Green period already.

Let’s take a look at the current chart for the Nasdaq (click for larger image):

We are still in a broad sideways pattern, and this could continue into next year.
Keep an eye on the trend lines in this chart. Sooner or later this market is going to chose a direction, and will have to break out above or below these lines that currently contain the market. A big move is then quite likely.
The upcoming Green period will favor the odds for an upside move in the coming weeks, but I don’t think we will get above 2700 already.
Uncertainty is likely to continue, and on the downside we have to watch support levels near 2500 and 2350.

I would still stay on the sidelines until we get a clearer picture.

Be well, Danny

Outlook 5 December

Another strange week, now with the market swiftly surging back to its October highs.
Volatility remains high, and any news item can turn things around quickly.

Let’s have a look at the chart for the S&P 500 Index (click for larger image):

We are back near the important 1250 support/resistance level. A break above 1275 would be a very positive development.
But a drop back to 1200 is at least equally likely , since we remain in a lunar Red Period.
The market remains highly uncertain, so I would stay on the sidelines.

Be well, Danny

Outlook 28 November

Another very bad week in the markets.
Since the 2600 support level in the Nasdaq was broken, stocks have continued to go down day after day.
A retest of the September lows is now becoming a very realistic possibility.
Our lunar Green Period is about the end, but it is going to be a very weak period and this tells us that we remain in a strong down trend.

Let’s have a look at the Nasdaq chart (click for larger image):

The Nasdaq has come down to 2450 in very quick fashion. This means that most of October’s gains are history already.
With a new lunar Red Period starting tomorrow I would look for some important bottom in the next couple of weeks. The 2300-2350 area should offer major support, and a good buying opportunity if we get there.
Stop loss levels have to be kept just below 2300, because a drop below that level would open the gates to 2100 or even lower.

Stay tuned, Danny

PS: For some unknown reason the comments had become disabled on this blog. This should be fixed now and your comments are welcomed as always. Thanks to the reader who pointed this out to me.

Outlook 21 November

The lunar Red Period ended with a 80 point loss for the Nasdaq.
So that’s in line with our moon cycles.
Meanwhile a new Green Period has begun, but the markets continue to go down and the Nasdaq has dropped below the important 2600 level. This means we are getting signs of weakness once again.
Let’s have a look at the chart for S&P 500 (click for larger image):

I am still looking for some kind of rally, but so far we are seeing a very weak Green Period and that is setting us up for further declines into early December.
Because some major support levels are being broken to the downside, I would move to the sidelines until the smoke clears.
There is too much risk for a downside acceleration at this point.
It’s all about listening to the market, and currently it is sending some strong warning signs.

Be well, Danny