Will the Market’s Brown Earth Dog Bite or Protect Us?

Astrology is not recognized as a science. As such, this makes it open to interpretation.

I recently wrote the following based on Raymond Lo’s take of the Year of the Brown Earth Dog:

“When the year of Dog arrives, the fire enters the grave. Hence, it brings setback to optimism which in turn will cause setback in the economic atmosphere.”

Recently, I found a different take:

“The Year of the Brown Earth Dog is going to be a good year in all respects, but it may also be an exhausting one.” Richard Eeds

So, optimistically it will be good but exhausting. Pessimistically, it will bring up the water element, thus an economic slowdown as 2018 goes on.

The Earth Dog has personality characteristics that could play out as interesting metaphors for the market.

Dogs offer safety and security. They have unwavering loyalty to friends and loved ones.

On the flipside, dogs are confrontational and will fight, sometimes to the end. Dogs can be quick to bite.

Perhaps the most fascinating aspect that might have a direct impact on the market and people is that Donald Trump is born the Year of the Brown Earth Dog.

In market terms, how does the underlying pessimism reconcile with the leader of the free world born on a “Fai Kong” day?

Moreover, what do we see on the charts?

Yesterday, none of the indices improved in phase from warning to bullish. Today, although they inched closer to the 50 daily moving average, none pierced it again.

NASDAQ 100 came closest. Percentagewise, QQQs had the biggest gains on the back of Amazon.

Semiconductors remained red all day. That implies that the technology sector remains tired. A strong leader in 2016-2017, SMH now threatens the foundation of the market should it continue to falter.

In the other key sectors of the Modern Family, Biotechnology (IBB), confirmed the warning phase. Specs are feeling a bit more confident.

The Russell 2000 (IWM) traded within Monday’s range. Indecisive.

Transportation, IYT, traded a bit more decisively, closing above previous day high, but not close enough to the overhead 50 DMA at 193.60. Quite a distance away.

SPY still has not cleared 267.09 (the weekly MA it failed after 15months). And if it does, it has its overhead 50 DMA at 271.50.

The charts tell us that they are hopeful that the U.S. will remain as “man’s best friend.”

However, the weakening of the phases and our Wonder Woman fatigued also suggests that the market is ready for a dog with a dark side.

Raymond Lo says, “As President Trump has already indicated, he does not sit quietly and go into the night. He will use every means at his disposal to retain his position and get what he wants. This, almost certainly, will result in conflict and chaos of some type.”

Both astrologers say that we should pay attention to our health this year. Make that, our health and that of the markets!

S&P 500 (SPY) I’m happy to see this move higher if it can. However, 267.20 is the weekly chart breakdown it held for 15 months. If it can clear, we still have lots of resistance, starting with the 50 DMA. Under 272-263 more trouble.

Russell 2000 (IWM) 151.50 major overhead resistance. The longer it holds 145.50 the better.

Dow (DIA) Inside day here too. Big resistance overhead and 241 has to hold

Nasdaq (QQQ) 155.25 pivotal. 160.60 the 50 DMA resistance