03/30/2010 Market Recap: Symmetrical Triangle?

TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart) Long-term 3 of 3 are BUY     Intermediate 3 of 3 are BUY 4 of 6 are NEUTRAL 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. BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246 1.0.2 S&P 500 SPDRs (SPY 60 min): Head and Shoulders Bottom, target 119.42. BEARISH 1.0.2 S&P 500 SPDRs (SPY 60 min): 16 unfilled gaps. (max was 16) 1.1.0 Nasdaq Composite (Daily): 9 unfilled gaps. (max was 10) 0.0.3 SPX Intermediate-term Trading Signals: CPCE MA(10) too low. 4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high. 1.1.0 Nasdaq Composite (Daily): NDXA50R is way too high. 03/25 Market Recap: Smart/dumb confidence spread is too large. 4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high. CONCLUSION Bearish signals are accumulated enough to justify a short sell. For aggressive traders only. 03/25, another Bearish Engulfing and the NYMO Sell setup was triggered.

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 *03/22 low *Adjust stop loss. Reversal Bar   NYMO Sell 03/25 S 03/25 high Non-Stop     Newly added setup as requested, suitable for investors, no stop loss, simply long or short. Better use RSP (equal weighted SPX ETF) for an average annual return around 15.4% since 2004. Will start to give signal on this setup the next time it’s triggered. OTHER ETFs MID TERM INDICATOR COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ UP 3 of 3 BUY 6.4.6 QQQQ Black Bar Watch: doesn’t look good. 4.1.1 Nasdaq 100 Index (Weekly): BPNDX too high. IWM UP 2 of 2 SELL CHINA UP 1 of 1 BUY Symmetrical Triangle breakout. Expect more on the upside. EMERGING ? *2 of 2 BUY   CANADA UP 2 of 3 SELL 4.1.5 iShares CDN S&P/TSX 60 Index Fund (XIU.TO Weekly): 3 Doji under important resistance. Lots of negative divergence plus BPTSX is too high. Expect pullback. BOND DOWN 2 of 2 SELL Symmetrical Triangle breakdown. Expect more pullbacks ahead. DOLLAR UP 2 of 2 BUY Head and Shoulders Bottom, target $24.28. 3.1.1 PowerShares DB US Dollar Index Bullish Fund (UUP 30 min): Could be Head and Shoulders Top, target $23.74. GOLD DOWN 2 of 2 SELL GDX DOWN 2 of 2 SELL Small Double Top, target $41.52. OIL ? 1 of 2 SELL ENERGY ? 2 of 3 SELL FINANCIALS UP 2 of 3 BUY REITS UP 1 of 2 BUY False breakout on narrow range so the real breakout could be on the downside. MATERIALS ? 1 of 3 BUY 4.4.4 Materials Select Sector SPDR (XLB Weekly): BPMATE 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.

SEASONALITY: THE LAST 3 TRADING DAYS OF MARCH ARE BEARISH WHILE APRIL 1ST IS VERY BULLISH

CYCLE ANALYSIS: EXPECT A DOJI THIS WEEK, MAY PULLBACK NEXT WEEK UNTIL 04/12

See 03/26 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

Nothing new, according to the II Survey, too many people expected a correction, so the stock market should rise to a new high first before actually pulling back. Basically, my guess is that we’ll repeat the year 2004 roller coaster pattern. See 03/19 Market Recap for more details.

SHORT-TERM: A SYMMETRICAL TRIANGLE MEANS ONE MORE PUSH UP?

Nothing to say again. 1.0.3 S&P 500 SPDRs (SPY 30 min), could be a Symmetrical Triangle in the forming therefore according to Elliott Wave Theory, tomorrow we could see one more push up. The VIX sharp sell off before the close also supports the theory. However whether SPY will eventually close in green is hard to say because the breadth below (black histogram bars) is becoming weaker and weaker,unless there’s some really good news tomorrow otherwise the breadth would become even weaker so chances for a red day tomorrow is a little bit higher.

 

4.1.0 S&P 500 Large Cap Index (Weekly), take a look at the weekly chart again, see red vertical lines, BPSPX way too overbought means at least there’ll be a red weekly bar ahead. However, see green cycle, there’s one case in the past the SPX rose one more week before actually pulling back and this is why I think we might have a Doji or small bar this week (i.e. one more green week) and the next week will be red.

 

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.