02/18/2010 Market Recap: Is the same old mad cow back?

TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart) Long-term 3 of 3 are BUY     Intermediate 2 of 3 are SELL 5 of 6 are NEUTRAL SPY ST Model is in SELL mode Short-term 1 of 1 are BUY 6 of 8 are OVERBOUGHT

BULLISH 0.0.3 SPX Intermediate-term Trading Signals: CPC MA10 is too low. 1.0.3 S&P 500 SPDRs (SPY 30 min): Ascending Triangle confirmed. Target $111.72. BEARISH 6.4.A SPY Bottom Shape: Could be another leg down to test the low. 02/12 Market Recap: Seasonality is generally bearish this week. 2.4.2 NYSE - Issues Advancing: Overbought. CONCLUSION

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING VEHICLE: SSO/SDS, UPRO/SPXU ST Model     Reversal Bar       NYMO Sell       VIX MA ENV     *Short if SPY Open > Close and VIX rise back into MA ENV.

OTHER ETFs TREND COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ   IWM   ChiOsc too high. CHINA Down Double Top confirmed. EMERGING Down CANADA FINANCIALS Down REITS   MATERIALS   ChiOsc too high. ENERGY Down OIL   *ChiOsc and STO too high. GOLD Down DOLLAR UP Head and Shoulders Bottom, target $24.28.  ChiOsc too low. BOND Down

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.

0.0.2 SPY Short-term Trading Signals and 0.0.5 QQQQ Short-term Trading Signals, overbought plus multiple resistances.

1.0.3 S&P 500 SPDRs (SPY 30 min) and 1.1.5 PowerShares QQQ Trust (QQQQ 30 min), lots of negative divergences。

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.