Markets held stable after last week’s dip. Now it remains to be seen whether stocks will continue downwards or simply resume their existing up trend. The current lunar red period is ending and our LT wave for September suggests potential weakness until the 25th, so a downward continuation is to come sooner rather than later, if it comes… If stocks muddle through this week without further losses then an upward continuation will gradually become the more likely scenario.
Let’s have a look at the S&P chart:
The technical situation keeps pointing both ways. The slower Earl2 (orange line) is still not bottoming out, but the faster Earl (blue line) is turning up again. The MoM indicator is entering the blue zone, which typically marks important market lows, but also not turning up yet.
It looks like a bit more time will be needed to get a really good setup. So, I wouldn’t rush in just yet. What will happen next is still very much in the balance.
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