Stock markets are going back up testing their recent highs, just as we indicated last week.
Some markets have gone into new 52 week highs already.
We have a few more Green periods days to come, so this week will probably be OK.
But from next week onwards I expect some more muddled waters, when we go in the Red Period again.
As this rally ages we have to become prepared for a correction that will take longer than a week.
So we have to keep our eye on the charts, and when the longer up trend breaks down, then I have to be ready to exit the market, especially when a Red Period is just starting.
Here is the current situation for the Nasdaq index (click for full size image):
Upside potential is probably limited by the overhead trendline that has been in play all year long. So if we reach 2650 this week, that will be a very good selling price.
First support is on the trendline for the rally that started last August, near 2550 for this week.
A larger correction would probably take us down to 2300 – 2400, where I would also expect major support to come in.
So I am ready to sell near 2650, or on a break below 2520 this week.
Good luck, Danny
LunaticTrader Blog 