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: NEGATIVE SEASONALITY + OVERBOUGHT + RESISTANCES + FED VS MAD COW
0.0.3 SPX Intermediate-term Trading Signals, see blue cycles, looks like the old mad cow is back. Tomorrow, in addition to the Fed discount rate hike, there’re a few not so bull friendly factors, so if the market could ignore all those and keep going up then most likely the old mad cow is back. The bottom line, from chart 6.4.A SPY Bottom Shape, I still don’t think a solid market could stand on a single foot so I still think that low will eventually be tested, just right now, I’m not sure if the market would rise to a new high first. The speculation about the market rising to a new high is from 02/05/2010 Market Recap, according to the past pattern that too many people in II Survey are expecting a correction.
Some of not so bull friendly factors are listed below:
Seasonality wise, tomorrow is the most bearish day in Feb. Also statistically, Feb OE Day was down 12 of the last 16 years.
6.2.0b VIX Trading Signals (ENV), this is a potential trading setup for tomorrow. In order to trigger the setup, not only should the VIX rise back into MA ENV, but also SPY Open > Close. The winning rate of this setup is 66%.
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 4 stocks found.
According to the entry rule, 17 stocks found yesterday were confirmed.