Short term peak
Posted by Danny on February 13, 2012
Markets stagnated last week, but still ended the lunar Red Period with handsome gains.
This indicates the path of least resistance is still up.
We are now entering a lunar Green Period again, favoring further gains, but how much can we expect after the recent rally?
Let’s have a look at the current chart for S&P 500 Index (click for larger image):
The S&P is coming close to last year’s highs @1370, so that may be reached in the next couple of weeks. But my Earl indicator is signalling weakness ahead, so I think we are going to make a short term top here.
We are then likely to fall back to the support trend line, currently around 1310, before making a new push higher.
So, I would use the Green Period to take some profits on ‘good news days’.