Live Update

Tuesday, June 30, 2009

06/30/2009 Market Recap: VIX Sell Signal

Summary:

Bears have 4 days to breakdown bellow SPX 888 to prove themselves.

A VIX sell signal was triggered.

  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 Up Neutral  

The drop today doesn’t say anything to me. Still it looks like a consolidation pattern on the daily chart therefore it could go either up or down. Let’s wait to see how the market unfolds tomorrow. In the After Bell Quick Summary, I mentioned that if there’s a rebound tomorrow then QQQQ has better chances.

7.1.0 Use n vs n Rule to Identify a Trend Change, bear sees some hopes finally. Now it has 4 days to prove itself.

NvsN

7.3.4 VIX Trading Signals, VIX rose from under BB lower boundary into BB, triggering a well known short-term sell signal. From below chart we can see that the signals worked so far so good ever since the 2008 bear market.

VIXTradingSignals

06/30/2009 After Bell Quick Summary

According to the intraday model from www.sentimentrader.com, QQQQ may rebound tomorrow.

NasdaqIntradayModel

Personally I won’t be too excited about the possible QQQQ rebound tomorrow as the Tech Bullish Percent Index is still at a multi years high.

BPINFO

My 7 trading days and 13 trading days cycle worked pretty well recently. Tomorrow will be the end of the 13 trading days cycle, so if we get an up day then probably a down day the day after or if we get a down day then probably an up day the day after…

SPY60min

Monday, June 29, 2009

06/29/2009 Market Recap: Firework trading setup triggered

Summary:

Firework trading setup triggered.

I still see this rebound is weak, another up day tomorrow will probably change my view.

Expect a pullback at least tomorrow morning.

  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 Up Neutral  

In the After Bell Quick Summary, I mentioned because CPC < 0.8, so 81% chances the market may close in green tomorrow, also a firework (means the stock market skyrocketing high) trading setup was triggered today. As I didn’t have enough data before posting the after bell quick summary therefore I also mentioned that I’m not sure if I could long from here. Now I have all the data, it seems that the market isn’t as overbought as I thought, so all I can say is possibly there could be a pullback at least tomorrow morning. Noted that my short-term prediction wasn’t very accurate recently (6/24 right, 6/25 wrong, 6/26 right, 6/29 wrong). From my experiences, once all my signals appear not worked so well then there’re possibilities the trend is shifting. So beware.

Firework

Institutional Buying and Selling Trending from www.stocktiming.com as per request. From this chart we can see that institutions have started accumulation again. This is another sign that trend maybe shifting.

instbsell

7.1.0 Use n vs n Rule to Identify a Trend Change, 1 vs 5, bears won, personally, I still see it as a sell-able bounce. Well, I’ll shut up if we do see a firework tomorrow.

NvsN

Reasons for a possible pullback at least tomorrow morning:

1.0.4 S&P 500 SPDRs (SPY 15 min), 1.1.6 PowerShares QQQ Trust (QQQQ 15 min), Bearish Rising Wedge plus lots of negative divergence.

SPY15min

2.0.0 Volatility Index (Daily), new low (while SPX no new high) plus ENV 10 oversold plus STO way oversold. I believe that VIX will rebound soon, this means a pullback for SPX.

VIXDaily

7.7.9 Russell 3000 Dominant Price-Volume Relationships, 1289 stocks price up volume down, this is a bearish readings.

RUA

Intraday model from www.sentimentrader.com, overbought.

IntradayModel

Today’s ISEE All Indices & ETFs Only readings are 117. About what’d happen when readings > 100, the discussion is here: http://cobrasmarketview.blogspot.com/2009/06/06122009-market-recap- stuck-in-range.html.

06/29/2009 After Bell Quick Summary

I’m sick today, have to go see doctor now so cannot wait after all data being collected.

Because CPC < 0.8, so there’re 81% chances the market will close in green tomorrow and also a firework setup has triggered.

CPCWatch

Firework

Personally, I’m not sure if I should long here, although I haven’t got all data yet, but I guess the market is pretty overbought now.

Sunday, June 28, 2009

06/26/2009 Market Recap: VIX new low again

Summary:

Expect QQQQ to have 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 Up Neutral  

I discussed the negative divergence between VIX and SPX in Friday’s After Bell Quick Summary. This is the main reason that I don’t trust this rally.

SPXVIXWatch2

2.0.0 Volatility Index (Daily), VIX ENV10 oversold, still is a pullback setup.

VIXDaily

1.0.4 S&P 500 SPDRs (SPY 15 min), 1.1.6 PowerShares QQQ Trust (QQQQ 15 min), Bearish Rising Wedge plus lots of negative divergences, a possible pullback setup as well.

SPY15min

Besides, QQQQ has some additional extremes:

2.3.4 Nasdaq Total Volume/NYSE Total Volume, too high which usually means a top. Since it’s a RATIO, so I don’t think the spike was caused by Russell 3000 re-balance on Friday.

NATVvsNYTV

5.0.2 S&P Sector Bullish Percent Index, Tech sector is overbought. This is year level of overbought, so I don’t think it could be neglected.

BPINFO

Nasdaq 100 short-term model from www.sentimentrader.com, way overbought。

STEM.MR

So to summarize, I tend to believe a pullback Monday, especially QQQQ. 

0.0.2 SPY Short-term Trading Signals, lots saying about a Complex Head and Shoulders Top is in the forming on SPX. The chart below illustrates the idea which shows SPY is probably making a right shoulder now. I have no idea if this is true, just put the chart here for your reference only.

SPYShortTerm

Friday, June 26, 2009

06/26/2009 After Bell Quick Summary

The below chart shows, when both SPX and VIX closed in red the same day, 70% chances a green day next day.

SPXVIXWatch

But since VIX reached a new low again today while SPX still hasn’t reached even a SWING high, I see some similarities in the following chart.

SPXVIXWatch2

So which one to believe, it’s your call. Personally I’m more willing to believe that this time we’re in that 30% chances which means a red Monday.

I still believe it’s a sell-able bounce according to “n vs n” rule. And since very short-term, QQQQ is extremely overbought, so perhaps betting on QQQQ to pullback next Monday is safer.

NvsN

Thursday, June 25, 2009

06/25/2009 Market Recap: VIX new low

Summary:

Not convinced by today's rally.

Expect a pullback as early as tomorrow.

  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 Up* Neutral  

I’m not convinced by today’s rally:

1. 7.1.0 Use n vs n Rule to Identify a Trend Change, 3 up days vs 1 down day, still bears went further, therefore I cannot say that the market is bullish. SPX 927 is the key, if the market closes above it then I have to re-evaluate the call for an intermediate-term down trend. For bears no panic is necessary, even if SPX 927 were broken tomorrow because very short-term already is very overbought, so at least next week bears would have a chance to escape.

NvsN

2. There are 2 dominant “Russell 3000 Dominant Price-Volume Relationships” today, 1361 stocks price up on increased volume which is bullish, but on the other hand, there are 1216 stocks price up on decreased volume which is bearish. A strong day ideally should have 2000+ stocks price up on increased volume so I cannot say today is a strong day.

3. Although SPX didn’t even close to a SWING HIGH but VIX already reached a new low today, this is a negative divergence which means the complacency is high.

SPXvsVIX

4. I’ve discussed “All Up Day” in the after bell Quick Summary, although today missed a single point to be an “All Up Day”, but at least both stock and bond were up a lot. Since normally bond and stock are reversely correlated, so either stock lied or bond lied today. And who’s lying, we might know as early as tomorrow. Anyway, from 3.0.3 20 Year Treasury Bond Fund iShares (TLT Daily), the Head and Shoulders Bottom should be confirmed upon the breakout today which means probably the bond will rise further.

TLTDaily

Tomorrow, I expect a pullback.

The short-term model from www.sentimentrader.com is the main reason for arguing a pullback tomorrow.

STEM.MR

From the above chart we can see that there’re 2 exceptions for not pulling back big when STEM.MR was overbought. The question is if we’re going to have another exception this time? I’ve compared today’s case with the previous 2 cases in the below chart. Since the strength of today is far less than those of 2 cases while STEM.MR is now almost equally overbought than those of 2 cases, so I believe that the pullback this time wouldn’t be weak.

BreadthWatch

1.0.3 S&P 500 SPDRs (SPY 30 min), possible Bearish Rising Wedge in the forming. ChiOsc is a little bit too high which was fairly accurate in predicting a pullback.

SPY30min

2.0.0 Volatility Index (Daily), the famous VIX ENV10 is oversold today also the famous VIX BB setup is (half) triggered. Look at the red dashed lines, at least these 2 combinations worked pretty good recently. This also means a possible pullback tomorrow.

VIXDaily

06/25/2009 After Bell Quick Summary

I see a good chance a pullback tomorrow, details will be discussed in tonight’s report.

According to “N vs N”  rule, bulls have spent 3 days, still couldn’t break above SPX 927, so this is still a sell-able bounce.

NvsN

Some discussion in my Chinese forum about All Up Day today which if turned out to be true then we’d see a big down day tomorrow. But, sorry bears, the US$ missed by one point so strictly speaking, today is not an All Up Day. But, I think that the very essence of an All Up Day is still presented today: The market is more likely in a transition state when the normal inter-market relationships are totally out of order as we see today that commodity, bond, stock and US$ (well, missed one point) all rose. So although no good news for bears, but personally, I’m not convinced by today’s rally.

AllUpDay

Wednesday, June 24, 2009

06/24/2009 Market Recap: FOMC and the day after

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.

NvsN

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.

SPY60min

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.

FOMCLong

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.

IntradayModel

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.

RUA

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.

NATVvsNYTV

5.0.2 S&P Sector Bullish Percent Index, Tech still is very overbought.

BPNYA

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...

SPXWeekly

06/24/2009 After Bell Quick Summary

I don’t see much edge for either bulls or bears tomorrow except that statistically the day after FOMC tends to be a down day recently.

FOMC

According to “N vs N” rule, the rebound so far was weak.

NvsN

Here again is the past example of how “N vs N” rule was used to detect a trend changes.

NvsN2008

SPY has 7 unfilled gaps again as we all know that at least recently the SPY seemed to unable to hold the 8th up gap so at least bears should not be too worried about a gap up tomorrow if any.

SPY60min 

The conclusion is that it might be a sell-able bounce especially if we get another gap up tomorrow.

Tuesday, June 23, 2009

06/23/2009 Market Recap: No Title

Summary:

No idea about tomorrow.

  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  

Tomorrow is the Fed Day, so no idea what will happen. Although in the after bell Quick Summary I mentioned that this kind of “after a big bar” Doji more likely means a continuation, but from the NYSE Intraday Cumulative TICK(Courtesy of www.sentimentrader.com), it’s very likely a good rebound is due soon or later. So maybe bulls should not be too worried if we have another down day tomorrow. If the current oversold tension couldn’t be relieved first, I also don’t think that bears could punch through the SPX 878 with the very first try.

CumTICK

Nothing else to say, let’s watch how the market unfolds tomorrow. 2 additional charts to watch:

3.0.3 20 Year Treasury Bond Fund iShares (TLT Daily), a possible Head and Shoulders Bottom in the forming, if break through then it’s not good for the overall market because it means a flight to safety.

TLTDaily

3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), could be a Bearish Abandon Baby therefore US$ could fall further and this is good for the overall market.

UUPDaily

06/23/2009 After Bell Quick Summary

I see no edges for either bulls or bears tomorrow mainly because tomorrow is FOMC which means anything could happen after 2:15pm ET.

Simply from the SPX daily chart, today’s Doji bar is 64% more likely to be a continuation pattern then a reversal pattern plus today’s Russell 3000 Dominant Price-Volume Relationships has 1002 stocks price down on decreased volume which also means a continuation. So I still see that SPX 878 will be tested (not necessarily tomorrow though).

NvsN

Oh, in case you’re still interested: Here is the most recent Institutional Buying and Selling Trending chart from www.stocktiming.com. (Today’s data is not included)

instbsell

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