Summary:
Expect at least a short-term pullback.
| 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 |
Not much else to say as all the major stuff is in the after bell Quick Summary. To summarize:
1. The 2 days bounce was weak, especially if bulls cannot break above SPX 927 tomorrow then good chances this is a sell-able bounce. Here’s some statistics about a weak rebound: Poor Rebound Breadth Not A Good Sign.
2. It would be the SPY’s 8th gap if we have another gap up tomorrow therefore I don’t think that gap could hold.
3. About FOMC and the day after (Not the same chart posted in the after bell summary), ever since the Oct 2007 bear market, the FOMC and the day after were reversely correlated. This means probably we’re going to see a red close tomorrow.
From the intraday model below, we could see, especially Nasdaq, that the market is very close to overbought, so if the market rise again tomorrow, no panic is necessary for bears.
7.7.9 Russell 3000 Dominant Price-Volume Relationships, 1095 stocks price up volume down, this is the most bearish price-volume relationships. Also the pullback starting form June 10 so far had all bearish price-volume relationships therefore arguing more pullbacks ahead.
Yes, the tech was strong today, but let me remind you 2 charts:
2.3.4 Nasdaq Total Volume/NYSE Total Volume, I think we should still remember what would happen whenever the ratio between NYTV and NYTV is too high. Well, the ratio rose to an extreme level again today.
5.0.2 S&P Sector Bullish Percent Index, Tech still is very overbought.
At the end, let me quote what Don Worden from Telechart has summarized:
My personal gut feel (subject to minute-by-minute change) is that the May lows will be violated and that the market will slip into an Intermediate Downtrend. I think that will be a healthy thing and that the March low will not be violated, probably not even tested.
My guess is that Don Worden is expecting a Head and Shoulders Bottom and the market is now making a right shoulder, which is exactly the same as John Murphy is expecting...
Cobra,
ReplyDeleteGood write up tonight. I think the H&S bottom is very possible and is something to keep in mind if we get to the 800 level.
Thank you Cobra. I truly appreciate your work. =D
ReplyDeleteHave you considered the bottom in march to be the left shoulder instead of the head?
ReplyDeleteBecause of the high volume, it would make more sense for march to be the left shoulder.
So we should be seeing the head soon (with lower volume). What do you think the chances of that are?
Nice work Cobra. I just did some research on the 5 minute. Hope you don't mind if I leave a link.
ReplyDeletehttp://www.bostonwealth.net/2009/06/25/sp-500-update/
Excellent write up Cobra and I do really appreciate your view on the market from different directions!
ReplyDeleteThanks Cobra, Interesting chart re. Likley direction post FOMC,..thanks.
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pricepersia, I actually don't belive this H&S bottom story.
ReplyDeleteGuys, thank you very much for the comments and additional info, really appreciate!
i think you mean "below" instead of "bellow"
ReplyDeleteYes, thanks, I mean below.
ReplyDeleteI agree with princepersia that 3/9 is the left shoulder. Head is coming up.
ReplyDeleteGood work. What is your take on TLT/TBT at this stage? FOMC statement seemed negative for bonds. But knee jerk reaction is seldom the sustainable one longer term.
ReplyDeleteIn Debt, I think TLT will be up.
ReplyDeletehello... hapi blogging... have a nice day! just visiting here....
ReplyDelete