04/14/2010 Market Recap: CPCE Closed at a Record Low

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 OVERBOUGHT Non-Stop Model is in BUY mode Short-term 1 of 1 are BUY 4 of 6 are NEUTRAL SPY ST Model is in BUY mode

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. BEARISH *1.0.2 S&P 500 SPDRs (SPY 60 min): 18 unfilled gaps. (max was 18) *1.1.0 Nasdaq Composite (Daily): 10 unfilled gaps. (max was 10) *0.0.3 SPX Intermediate-term Trading Signals: CPCE and CPC 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. 4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high. *0.0.9 Extreme Put Call Ratio Watch: CPCE and CPC MA(5) too low. *8.1.5 Normalized CPCE: New record low. 6.2.3 VIX:VXV Trading Signals: Too low. *2.3.4 Nasdaq Total Volume/NYSE Total Volume: Too high. *04/14 Market Recap:  percent of SPX stocks 1+ std dev above MA(50) is too high. *04/14 Market Recap: Smart/dumb confidence spread at sentimentrader is too large. *04/14 Market Recap: Too many bearish extreme signals at sentimentrader. *04/14 Market Recap: Intermediate-term Indicator Score at sentimentrader is too high. CONCLUSION So far no bearish signals worked but they are simply too many. I won’t attempt any short until the next NYMO Sell setup is triggered. Still hold the SPY ST Model long position, but no more equities long will be added.

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 03/31 low   Reversal Bar   NYMO Sell     Non-Stop     Newly added setup, will give signal on this setup the next time it’s triggered. OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ UP   4.1.1 Nasdaq 100 Index (Weekly): BPNDX too high. IWM UP     CHINA ?     EMERGING UP     CANADA UP   4.1.5 iShares CDN S&P/TSX 60 Index Fund (XIU.TO Weekly): BPTSX is too high. BOND DOWN   *Black bar plus big red bar, so pullback confirmed? DOLLAR UP   Head and Shoulders Bottom, target $24.28. GOLD UP   *Seems to hold well above the breakout point. GDX UP   Ascending Triangle, target $54.2. *Hammer and held the Ascending Triangle breakout point, will keep rebound? OIL UP ENERGY UP   FINANCIALS UP   4.4.2 Financials Select Sector SPDR (XLF Weekly): Fib confluences area from $16.76 to $16.97 could be the target. Up 9 weeks in a row tied the past record of streak up weeks. REITS UP MATERIALS UP   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 LATER HALF OF THE WEEK IS GENERALL BULLISH

According to the Stock Trader’s Almanac:

1. 04/15 income tax deadline, Dow down only 5 times since 1981.
2. April expiration day, Dow up 11 of last 13.

CYCLE ANALYSIS: CYCLE TOP COULD BE AROUND 04/11 TO 04/15

See 04/08 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 STRONG EARNINGS OFF-SEASON USUALLY MEANS A WEAKER EARNINGS SEASON

See 04/09 Market Recap, the statistics about the Earnings Season plus the cycle analysis and plus too many bearish extremes accumulated in the table above, so my guess is that we’ll see typical sell on news in the coming earnings season.

I bet everyone knows what I’m going to talk about tonight, yes, lots lots lots lots of bearish extremes, as shown on all the newly added stars in the table above. But I still think it’s worth to take a look at the charts I posted today because after a few days we might realize that either they’re nothing (comparing with the more extremes perhaps we’ll see later) or we’ve already witnessed a history today. Well, who knows and perhaps who cares?

6.1.0 Extreme CPCE Readings Watch, I believe every newsletters will mention this tonight – a record low CPCE readings which means never ever so much call buying and so less put buying.

 

0.0.9 Extreme Put Call Ratio Watch, because CPCE is way too low so now a top signal is triggered on this chart, see dashed red lines.

 

The most interesting thing today is the Nasdaq Intraday Cumulative Tick (courtesy of sentimentrader) is extremely extremely high.

 

Take a look at the chart below then you’ll know why the above Nasdaq Intraday Cumulative Tick was so high today – there’re virtually no minus ticks today. That really really is bullish.

 

All the charts below are not available in my public chart list, so I post them here to let you know the current status. For other charts not posted, please click the links in the table above to see them.

 

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.