While downward pressure on stocks was evident in the beginning of the week, we didn’t get real follow up on the previous Friday’s drop, and the market recovered nicely towards the end of the week.
This means that for the first time since last April we are seeing signs of strength in the market. Of course there are a few more days to go in this Red Period, but the odds are shifting towards a rally that will last into August. It will become more clear this week.
Today I want to show you a chart of the S&P 500 Index (click for larger image).
Since last year the price action has been confined between a few support/resistance lines. Notice how the blue lines connect nearly all major tops and bottoms over the last 12 months.
These lines converge at two points: in mid September and mid November.
It will be interesting to see what happens going into these dates.
Currently I would look for some top in August followed by new downside action.
Based on this chart and the LunaticTrader cycles I will be watching out for the days around 20th September, 15 November and 30th November.
Good Luck, Danny
LunaticTrader Blog 
Hi Klout,
I hadn’t heard about Robert Taylor, but was able to google for it.
I suppose you are talking about this: http://paradigmbook.com/index.html
Will take a look at it.
Tides is something I consider adding to the intraday charts in LunaticTrader
Thx, Danny
hello danny:
nice charts….that trendline convergence analysis is sweet …. forecasting is what is important. nice work
did u do any study of robert taylor techniques??? tidal charts. tides of course are a phenomenon produced by movements of the moon. u may find soem synergy there.
k
Hi Helen,
Stock peaks on full moon do happen, but historically it has been more common to get stock market bottoms around full moons.
Our site offers more details about the effects of various moon cycles.
See: http://lunatictrader.com/?Moon_Cycles
Danny