03/18/2010 Market Recap: Worden Market Indicators

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

ATTENTION 2.4.4 NYSE McClellan Oscillator: Negative divergence. 1.1.0 Nasdaq Composite (Daily): Non confirmation between SOX and COMPQ. BULLISH 1.0.2 S&P 500 SPDRs (SPY 60 min): Head and Shoulders Bottom, target 119.42. 2.4.4 NYSE McClellan Oscillator: NYHGH new high means SPX new high ahead. BEARISH 1.0.2 S&P 500 SPDRs (SPY 60 min): 16 unfilled gaps. (max was 15) 1.1.0 Nasdaq Composite (Daily): 10 unfilled gaps. (max was 9) 03/08 Market Recap: Institutional Distribution is too low. 0.0.1 Market Top/Bottom Watch: NYDNV too low. 0.0.6 Nasdaq 100 Index Intermediate-term Trading Signals: NAADV MA(10) too high. 0.0.9 Extreme Put Call Ratio Watch: Topped? 0.0.3 SPX Intermediate-term Trading Signals: CPCE MA(10) too low. 4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high. 03/17 Market Recap: Dumb money confidence too high. 03/17 Market Recap: Too many bearish extremes among all sentimentrader indicators. CONCLUSION Could short after seeing a daily reversal bar (Open > Close), for aggressive traders only. Reversal bar triggered on 03/12, good luck bears! 03/17, be prepared to admit wrong, at least no average down here.

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 *03/05 low *Adjust Stop Loss. Reversal Bar 02/26 L *03/16 low *Adjust Stop Loss. NYMO Sell       VIX MA ENV

OTHER ETFs COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ 0.0.5 QQQQ Short-term Trading Signals: ChiOsc too high. IWM CHINA EMERGING CANADA 1.5.2 TSE McClellan Oscillator: A little bit negative divergence. FINANCIALS REITS MATERIALS OIL & ENERGY Broadening Top in the forming on XLE, the breakout direction is unknown. GOLD & GDX BIOTECH DOLLAR Head and Shoulders Bottom. ChiOsc too low. BOND *ChiOsc too high.

*Please make sure you understand how to use the table above. The main purpose of this report is to provide information so contradictory signals are always presented.
*Skip the SEASONALITY and CYCLE ANALYSIS sessions below if you think they’re superstitious.

SEASONALITY: THE FIRST HALF OF THE WEEK IS GENERALLY BULLISH

See 03/12 Market Recap for details.

CYCLE ANALYSIS: EXPECT A CYCLE TOP WITHIN THIS WEEK

See 03/12 Market Recap for details. The SPX daily cycle mentioned yesterday, still valid and look like a top. See 1.0.7 SPX Cycle Watch (Daily).

INTERMEDIATE-TERM: EXPECT CORRECTION TO CONFORM THE PAST II PATTERN, NOT SURE WHEN IT STARTS

See 03/12 Market Recap for details.

SHORT-TERM: NORMALIZED CPCE IS A LITTLE BIT TOO LOW

Nothing to say today, just throw something below to keep my promise.

8.1.5 Normalized CPCE, the word “normalize” means instead of checking the absolute value using the distance between MA(10) and MA(200). Because put call ratio varies a lot in different market period so it’s better to use MA(200) to eliminate base differences.

0.0.0 Signal Watch and Daily Highlights, don’t know if anybody have noticed the T2105 and T2112 red marks? Below are those two charts.

T2105, a little bit too high comparing with the most recent trend. The blue curve represents SPX, so accordingly this kind of high value may mean a top. However longer history wise, the current value is nothing.

T2112, the same, the blue curve represents SPX, above the horizontal blue line is extremes, so now the value is a little bit too high.

 

8.2.8a Record NYSE 52 Week Highs 2009, 8.2.8b Record NYSE 52 Week Highs 2004 - 2006, 8.2.8c Record NYSE 52 Week Highs 2003 - 2004, I mentioned yesterday that NYHGH new high means an index new high ahead however a pullback is very likely in a short-term. The links above have loosened the new high conditions to NYHGH > 450 so that more cases are presented. Take a look if you have time as I’m not sure I’ve described the edges correctly.

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.

Looks like it’s too late to long stocks now as the market is way too overbought. Waiting for a better chance.