05/03/2010 Market Recap: Symmetrical Triangle or Diamond Top?

TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart) Long-term 3 of 3 are BUY     Intermediate 2 of 3 are SELL 3 of 5 are NEUTRAL Non-Stop Model is in BUY mode Short-term 1 of 1 are SELL 6 of 6 are NEUTRAL SPY ST Model is in BUY mode

ATTENTION *1.0.6 SPY Unfilled Gaps: 17 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 MA(10) too low. 0.2.2 Extreme Put Call Ratio Watch: CPCI too high, top? 4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high. 4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high. 04/20 Market Recap: Record high Climax Buying. 04/20 Market Recap: Weekly Bearish Engulfing could mean a top. CONCLUSION 0.0.2 Combined Intermediate-term Trading Signals, although the primary sell signal is not yelling yet, but sometimes NYSI and BPSPX sell signals did work, so be careful 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 04/29 L 1.5xATR(10) Be careful, don’t get too bullish, the uptrend is weakening. Reversal Bar     NYMO Sell     Non-Stop     VIX MA ENV       OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ UP   IWM UP     CHINA DOWN   EMERGING ?   Price overlap, so could be a failed bearish 1-2-3 formation, the trend is unclear. EUROPEAN DOWN   Stick Sandwich, so more down? CANADA UP   Lots negative divergence and I don’t like the BPTSX bearish crossover. *Plus 2 reversal bars in a row today, should mean something, I guess. BOND ?   Breakout, the trend could be changed to up from down. EURO DOWN   *6.4.5 GLD and UUP Watch: GLD black could mean UUP rebound. YEN DOWN     GOLD UP   4.3.0 streetTRACKS Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99. Also there’s a small Head and Shoulders Bottom, target $121.96. OIL ? ENERGY UP   FINANCIALS ?   Price overlap, so could be a failed bearish 1-2-3 formation, the trend is unclear. 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: MONDAY AND FRIDAY ARE BULLISH

See 04/30 Market Recap for more details.

CYCLE ANALYSIS: COULD BE A CYCLE TOP AROUND 05/03 TO 05/10

See 04/30 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD OR THE MARKET COULD BE TOPPED

See 04/30 Market Recap for more details.

SHORT-TERM: MIXED SIGNAL, A LITTLE BULLISH BIASED THOUGH

Not sure about the short-term direction, need see tomorrow. For the intermediate-term see 04/30 Market Recap, the market could be building a top of some kind. In another word, I’m not sure if the market still has a final push up left.

0.1.0 SPY Short-term Trading Signals, from bull’s eyes, could be a Symmetrical Triangle in the forming, which could mean a wave 4 and therefore could be a wave 5 final push up ahead. The potential target for the wave 5 (if so) could around SPX 1250ish.

 

0.1.1 SPX Intermediate-term Trading Signals, from bear’s eyes, could be a Diamond Top in the forming  plus a big Ascending Broadening Wedge.

 

Whether it’s a Symmetrical Triangle or a Diamond Top, need see tomorrow. My bias lean to the Symmetrical Triangle, the excuse is the chart 6.2.2b VIX Trading Signal (BB), the VIX BB buy setup triggered today. See the back test, buy tomorrow open, sell at the 4th day close, bull has 75% chances.

 

If the market rises again tomorrow, pay attention to today’s WOW. Again Nasdaq had almost no minus TICK the whole day today. The previous 3 WOWs were on 04/29 Market Recap, 04/20 Market Recap and 04/14 Market Recap. However the WOW today is the smallest comparing with the previous 3 WOWs, so I’m not sure if it’ll have the same dramatic effects as the previous 3 WOWs.