04/23/2010 Market Recap: New high ahead but could be a red week the next week

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

ATTENTION 0.2.3 NYSE McClellan Oscillator: Negative divergence. 1.0.6 SPY Unfilled Gaps: 16 unfilled up gaps. (max was 18) 0.1.1 SPX Intermediate-term Trading Signals: Could be an Ascending Broadening Wedge in the forming. BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246. *0.2.3 NYSE McClellan Oscillator: NYHGH new high could mean SPX new high ahead. BEARISH 0.1.1 SPX Intermediate-term Trading Signals: CPCE and CPC MA(10) too low. 4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high. 4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high. 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 04/19 low   Reversal Bar   NYMO Sell     *Stopped out short position with loss. Non-Stop     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 overbought and too high above MA(200). *0.1.0 SPY Short-term Trading Signals: Ascending Triangle breakout, target $51.48. *ChiOsc a little too high. IWM UP   *ChiOsc a little too high. *4.1.2 Russell 2000 iShares (IWM Weekly): Too high above MA(200). CHINA ?   EMERGING UP   CANADA UP   BOND DOWN   *0.2.1 10Y T-Bill Yield: Breakout of a Bull Flag, so yield could up while bond will be down. DOLLAR UP GOLD UP   GDX UP   OIL UP ENERGY UP   *4.4.1 Energy Select Sector SPDR (XLE Weekly): Breakout! FINANCIALS UP   *4.4.2 Financials Select Sector SPDR (XLF Weekly): Too high above MA(200). REITS UP MATERIALS UP

*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: MOSTLY THE MONTH’S LAST TRADING WEEK WAS RED SINCE AUG 2009

See chart below, interestingly, ever since the Aug 2009, mostly the last trading week of each month was a red week.

 

Especially the last 2 trading days of each month. Still remember this setup?

 

CYCLE ANALYSIS: THE NEXT IMPORTANT DATE IS 05/06

See 04/16 Market Recap for more details. Please don’t read too much into cycle analysis, all I know is that the next potential turn date is 05/06 (+-) which could either be a top or a bottom depending on how the market marches to that date.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

See 04/16 Market Recap for more details.

SHORT-TERM: EXPECT A NEW HIGH AHEAD BUT COULD BE A RED WEEK THE NEXT WEEK

Start with the good news first, 0.2.3 NYSE McClellan Oscillator, the NYHGH (NYSE New 52 Week Highs) below reached a new high last Friday which means that SPX will have a new high ahead. See charts below for the past patterns, although the NYHGH very high reading may mean a red day the next day but a top could only be formed after NYHGH negative divergence. So in another word, even the market starts to pullback the next Monday (which by the way is unlikely if you remember the chart 6.5.2a Weekday Seasonality Watch) there’ll be at least a rebound to a new high thereafter (so that NYHGH could have a chance to form a negative divergence).

 

4.1.0 S&P 500 Large Cap Index (Weekly), my guess is that Fib 61.8% at 1228 could be the new high since it’s not far away now. However, see vertical red solid lines (PPO(1,40,1)), every time the SPX was too high above MA(200), the next week was a red week. So combining with the above mentioned seasonality factor – mostly every month’s last trading week was a red week since Aug 2009, therefore chances are good that we might see a red week the next week.