By Jeff Pierce

In my research last night I forgot about the full moon tomorrow night and the potential implication for next week and a possible correction. Given that the last new moon was a reversion incident and it continued to push higher into resistance and subsequently past resistance, the likelihood of a pullback next week is on the table. I’m seeing the most weakness in the TSX from my proprietary indicators that suggest that will be the first of the major indexes I follow to correct. I also feel confident it will be contained, shallow, and a great opportunity to add to existing long trades.

Blue circle – Full Moon

Empty circle – New Moon

djia

 

When you look at the vertical move we’ve had on the DJIA (above),  it’s an easy call to say “we’re due for a pullback” but that doesn’t mean it’s going to happen. A sideways correction is also a possibility.  That’s why it’s important not to unload all your longs here.

As I said in last nights video, it’s a stock pickers market so follow your trading rules per individual names and if you are trading the indexes it probably wouldn’t be a bad idea to trim some of those long trades and add on pullbacks.

4 Responses to “Full Moon Rising Tomorrow”

  1. JohnD Says:

    Good note Jeff, but I am afraid for traders, we should be a bit extra prudent in the face of a straight-up-rally like this and take profits, add shorts and sit on sidelines. My guess is a selloff within a few days and let the fear permeate a bit before start to add to our longterm positions.

    Not sure if we are agreeing or not, but it feels like a buy the dip from you versus add to short side here from me.

    I doubt its just a consolidation – I think we take a punch or two on downside for the right-now-trade.

    Appreciate your thoughts on this since this is a big move – in either direction.

  2. jeff pierce Says:

    I think we’re both on the same page. Markets will go sideways or down and any dips are buying opportunities.

  3. Thinksmart Says:

    When everybody starts to think that we will continue to higher, in my opinion the doubt is ready to coming…

    We don’t have any fear in the market, no politics, no geopolitical tension…

    The market can continue to grind higher, but I am not sure that we can have really more than 1520 on the S&P 500 for now and we will visiting the 1575 at the end of the year.

  4. JohnD Says:

    Thanks Jeff, Thinksmart. I was thinking 1520-1525 as well, if that. Its definitely hard to be early and get short and wait, but I think it is worth it. I might be a bit aggressive in shorting after weakness starts as well, but I think fear will overtake greed in the short term.
    That said, I am entirely in agreement that for longer term names that we like, its time to buy those dips. But slowly.
    Thanks for the replies.
    JD

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