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INTERMEDIATE-TERM: INITIAL PULLBACK TARGET MET BUT COULD BE MORE
No update, see 02/05/2010 Market Recap, Fib 38.2% retracement target was met, but I suspect there’s more. There’s a chance that after the pullback is over, we’ll see a new high followed by a bigger pullback thereafter.
SHORT-TERM: SEASONALITY IS NOT VERY BULL FRIENDLY THE NEXT WEEK
As mentioned in 02/11/2010 Market Recap: Ascending Triangle or Bear Flag?, the last Friday would determine the “Bull Moon” or “Bear Moon”. So far from chart 1.0.8 SPX Cycle Watch (Moon Phases), it looks like a top.
I know, most people think the Moon as superstitious, well, let’s see some statistics about the next week.
- Days after the President’s Day was down 8 out of the last 10 years.
- OE day next Friday was down 12 out of the last 16 years.
- Take a look at statistics here: President's Day Trading.
- Take a look at statistics here: President’s Day – But Not For The Markets.
And lastly, let’s take a look at a seasonality chart form the SentimenTrader. Not so bull friendly next week either. Sure, the coming Tuesday is bullish, but I think maybe the above “1” – the day after the President’s Day was down 8 out of the last 10 years, weights more, as the last Friday was supposed to be bullish too, but when combines with the statistics about “the day before the President’s day was down 15 out of the last 18 years”, SPY was closed in red eventually.
Well, what about the famous very very bullish Monday? 1.0.2 S&P 500 SPDRs (SPY 60 min), ChiOsc is way too high, this usually means at least 4 hours pullback, plus that would be the SPY’s 12th gap if we have a gap up open the next Tuesday, so be careful about possible gap fade.
Take a look at the recently outperforming QQQQ, 1.1.5 PowerShares QQQ Trust (QQQQ 30 min), multiple resistances plus Bearish Rising Wedge.
Also don’t forget although the Cumulative TICK usually doesn’t pin exactly the top, but sooner or later there’ll be a pullback, so I don’t think QQQQ has much room left on the upside.
So to summarize, be careful about the next week. Statistics is not a sure thing to act on but it also could not be neglected. For example, at the beginning of this year, I said, statistically, starting from the 8th trading day till the end of the January, QQQQ should generally bearish. How many people actually believed this? Now you all know it’s true, isn’t it? 0.0.3 SPX Intermediate-term Trading Signals, do the comparison yourself, what is the major differences between the rebound in the past and that of now?
The Long Term Trending Fed. Liquidity and Foreign Liquidity Inflows from StockTiming below should enough explain why the rebound so far was different than what we used to see in the past.
STOCK SCREENER: For fun only, I may not actually trade the screeners. Since SPY ST Model is in SELL mode, only SHORT candidates are listed. For back test details as well as how to confirm the entry and set stop loss please read HERE. Please make sure you understand the basic risk management HERE.
Today’s screener has 1 stock found.
According to the entry rule, PBR found Thursday wasn’t confirmed.
