03/04/2010 Market Recap: Typical Non Farm Payrolls Day Pattern

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 3 of 8 are NEUTRAL

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): *8 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   Black bar, could pullback. IWM   ChiOsc too high. CHINA   *Big red bar usually means more pullback ahead. EMERGING Down CANADA *Bearish reversal bar. FINANCIALS   REITS   MATERIALS     ENERGY Down Broadening Top in the forming, the breakout direction is unknown. OIL   *Hollow red bar, could pullback. GOLD Down DOLLAR UP Head and Shoulders Bottom. ChiOsc too low. BOND Down

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: A TYPICAL NFP DAY USUALLY REVERSES WHATEVER HAPPENS IN THE MORNING

Nothing to say today. 0.0.2 SPY Short-term Trading Signals shows 3 reversal bars in a row, it doesn’t look good. However it also can be seen as a consolidation above the neckline of the Head and Shoulders Bottom after a breakout, which is actually bullish, so very difficult to say now. Personally, I still think that the top signal given by the chart 2.3.4 Nasdaq Total Volume/NYSE Total Volume is very reliable therefore should not be ignored.

Tomorrow is Non Farm Payroll day, the general rule is to fade the open gap, most likely the later day will reverse whatever happens in the morning. The charts below are from Bespoke, basically saying the same thing. Also statistically, up big tomorrow then the next week will pullback while down big the next week will rebound, and also if up day again tomorrow then this week is an all up weekday week then the next week will most likely consolidate, the chances of up big is low.

 

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.