03/02/2010 Market Recap: Higher Beta Stocks are Most Welcome

TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart) Long-term 3 of 3 are BUY     Intermediate 2 of 3 are BUY 4 of 6 are NEUTRAL SPY ST Model is in BUY mode Short-term 1 of 1 are BUY 5 of 8 are OVERBOUGHT

BULLISH 1.0.2 S&P 500 SPDRs (SPY 60 min): Could be Head and Shoulders Bottom, target 119.42. BEARISH 6.4.A SPY Bottom Shape: Could be another leg down to test the low.  0.0.8 SPX:CPCE: A top was confirmed. 1.0.2 S&P 500 SPDRs (SPY 60 min): *14 unfilled gaps. (max was 15) 1.1.0 Nasdaq Composite (Daily): *9 unfilled gaps. (max was 9) 2.3.4 Nasdaq Total Volume/NYSE Total Volume: *Too high, topped? 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 02/26 L breakeven Reversal Bar 02/26 L breakeven NYMO Sell       VIX MA ENV

OTHER ETFs TREND COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ   IWM   CHINA   EMERGING Down CANADA FINANCIALS   REITS   *Black bar, could pullback. MATERIALS   ChiOsc too high. ENERGY Down Broadening Top in the forming, the breakout direction is unknown. OIL   ChiOsc too high. *2 reversal bars in a row, could pullback. GOLD Down DOLLAR UP Head and Shoulders Bottom. BOND Down *3 reversal bars in a row, could pullback.

INTERMEDIATE-TERM: VERY CLOSE TO A TURNING POINT, NOT SURE IT’S A TOP OR BOTTOM THOUGH

See 03/01 Market Recap, there’re several cycles due this week or early next week, among them the 03/08 could be the most important one. The market rises into 03/08 then 03/08 could be a top while the market drops into 03/08 then 03/08 could be a bottom.

SHORT-TERM: COULD SEE A PULLBACK VERY SOON

I see three things against bulls today, so very short-term there could be a pullback. Besides, as mentioned in today’s After Bell Quick Summary, even the market rises again tomorrow, it’s very unlikely to rise big.

0.0.2 SPY Short-term Trading Signals, black bar (see red cycles), looks like all the next day was in red recently.

2.3.4 Nasdaq Total Volume/NYSE Total Volume, Nasdaq volume to NYSE volume ratio too high means people are too bullish therefore it usually means a top.

If you haven’t noticed this in the table above, then let me remind you here: 1.0.2 S&P 500 SPDRs (SPY 60 min) now has 14 unfilled gaps, it had maximum 15 unfilled gaps in the most bullish period of the last year; 1.1.0 Nasdaq Composite (Daily) now has 9 unfilled gaps, and it had maximum 9 unfilled gaps in the most bullish period of the last year. The question is whether now is more bullish than that of last year? Well, at least from the inflow liquidity (courtesy of stocktiming) chart below, the answer is no.

 

STOCK SCREENER:  For fun only, I may not actually trade the screeners. Since SPY ST Model is in BUY mode, only LONG 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.

Since the intermediate-term direction is not clear, so no stock screeners from now on until the dust settles.