Summary:
CPCE top signal might be confirmed today.
Expect more pullback on the intermediate-term.
| Trend | Momentum | Comments - Sample for using the trend table. | |
| Long-term | Down | Idea for trading intermediate-term under primary down trend. | |
| Intermediate | Down | Neutral | |
| Short-term | Down | Neutral |
Take a look at 0.0.0 Signal Watch and Daily Highlights first, short-term almost all neutral, so no idea tomorrow. Some paid statistics favors bulls in the next 2 days though. Also today’s After Bell Quick Summary mentioned a bull edge for tomorrow as well, take a look if you will.
2.8.0 SPX:CPCE, this is the today’s main story. Indeed it looks different this time, so probably the breakout is for real which means the top is confirmed.
Bellow chart shows more history about using CPCE trend line to catch the market top. I found this rule in year 2007 and so far it never went wrong. (Well, wrong twice since March, but I’ve explained that it’s my problem not the chart’s problem. LOL)
0.0.3 SPX Intermediate-term Trading Signals, all sell signals now, plus all negative divergences, therefore the sell signals should have a little bit credit this time than that of May when these signals were first triggered.
Besides, let me remind you a few other factors:
1. 1.2.0 INDU Leads Market, unlike SPX, INDU has no higher high which is a negative divergence. Now INDU has broken bellow MA200 before the SPX which means that soon or later the SPX will breakdown bellow MA200.
2. 2.3.3 NYSE Total Volume, 2.3.4 Nasdaq Total Volume/NYSE Total Volume, the normalized signal at bottom is more likely a top rather than a bottom.
3. 7.1.3 Major Accumulation/Distribution Days, the 2nd Major Distribution Day is waiting for us somewhere.
So from all the above, I still think the the market may continue pullback after a short-term bounce (if any). The initial target is SPX 878 which is the May lows.
Additional charts to watch:
3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), could be a back test of the breakout point. If so, the US$ may rise which is not good for the stock market.
3.4.2 United States Oil Fund, LP (USO 30 min), could be a Bull Flag which means that oil may rise further.
5.3.0 Financials Select Sector SPDR (XLF Daily), possible Symmetrical Triangle breakout on the downside。
Cobra, do you use the CPCE trend line in reverse too, for swing bottoms?
ReplyDeleteYou have a very convincing argument, Cobra.
ReplyDeleteBut for the UUP, do you see a bear flag forming?
i trade both energy and financials, the Dow and the S&P seem to follow either or both of these sectors.... i like to reference these 2 charts when trading SKF and DUG..
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$BPENER&p=D&yr=0&mn=8&dy=0&id=p73869613884
http://stockcharts.com/h-sc/ui?s=$BPFINA&p=D&yr=0&mn=8&dy=0&id=p40068126330
Erik, I haven't noticed a rule for bottom yet.
ReplyDeleteMe vs. Wall st, yes, UUP could form a Bear Flag. Thanks.
Anonyomous, thanks for the chart link!