Sometimes markets can have turns on solar anniversaries such the bull markets for the Dow Jones Industrial Average (DJI) and S&P 500 (SPX) which began on 10/10/02 and ended on 10/11/07. Other times lunar anniversaries can signal a change in market direction. The new moon on 03/13/21 could mark a significant top for the US stock market.
First, lets examine the Elliott wave structure of the daily DJI. Chart courtesy of Trading View.
This wave count like the SPX count noted in the prior blog is not ideal. Note that the supposed Minor wave “1” is larger in price and time to the supposed Intermediate wave (1). Normally lesser degree waves are smaller in price and time to the next higher degree wave. There are exceptions, and this could be one.
As for momentum, note that at the 03/12/21 the daily RSI had only a small bearish divergence vs. the prior near-term price top. Its possible the DJI could have a higher high in a few weeks with a larger RSI bearish divergence.
In time analysis, traders in several markets have been using lunar cycles for decades. Note that within the last year there have been four minor turns that have occurred on either a full or new moon.
Christopher Carolan took lunar cycle analysis to a new level with his book “The Spiral Calendar”. Carolan discovered that the DJI 1987 bull market and crash had price points that corresponded with the 1929 bull market and crash on the lunar calendar. This discovery was the starting point for his development of the Spiral Calendar methodology.
The 2020 stock market crash bottomed 03/23/20, the one-year solar anniversary is 03/23/21. However, there was a new moon on 03/24/20 twelve new moons later is 03/13/21 – a Saturday. A good time frame to use with lunar cycles is plus or minus two trading days from the full/new moon. The time frame for this cycle is 03/11/21 to 03/16/21.
The DJI made a new all-time high on 03/12/21 unconfirmed by the other two main US stock indices, SPX, and Nasdaq Composite. Another “Rule of the majority” signal. It’s possible an important top was registered on 03/12/21.
The 15- minute DJI chart provides additional evidence a top could be in place already, or on 03/15/21.
My blog “Nasdaq – 100 Breaks Through Resistance Then Declines” noted that the DJI fifth wave on the intraday chart could be extending. This is what appears to have happened and the extension could be complete as of 03/12/21 or 03/15/21. Note Fibonacci extension resistance at 32913.20.
What happens on 03/15/21 could be important especially if none of the three main US indices make a new high, or if the DJI makes a new unconfirmed high.
The Nasdaq – 100 still appears to be making a series of Elliott wave ones and two to the downside. Which is potentially very bearish. The progress of this index will be updated soon.