06/23/2010 Market Recap: Bear Flag?

TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart) Long-term 3 of 3 are BUY     Intermediate 2 of 3 are BUY 5 of 5 are NEUTRAL Non-Stop Model is in BUY mode Short-term 2 of 2 are SELL 6 of 6 are NEUTRAL SPY ST Model is in BUY mode GANN DAY MOON/SOLAR CYCLE & TIME FIB CONCLUSION 07/07-07/11 06/26 / 07/07 06/24, 07/31, 08/20-08/23 Next pivot date: 06/24?

BULLISH 8.1.1 Normalized NATV/NYTV: Bottomed? 0.2.1 10Y T-Bill Yield: Bottomed? BEARISH *0.0.2 Combined Intermediate-term Trading Signals: Topped? CONCLUSION

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU ST Model   *Buy if SPY rises tomorrow. The stop loss will be 1.9 * ATR(10). Reversal Bar     *Buy if SPY rises tomorrow. The stop loss will be 0.9 * ATR(10). *This model will be retired as soon as the SPY ST Model upgrade project is done. NYMO Sell     Non-Stop(RSP) 06/17 L N/A See 06/17 Market Recap for more details. OTHER ETFs TREND *DTFMS COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ UP   IWM DOWN   Ascending Broadening Wedge, downward breakout 73% of the time. CHINA DOWN EMERGING UP   EUROPEAN UP   CANADA UP   *Hollow red bar held above MA(20), rebound? BOND UP *BUY *ChiOsc is way too high now. EURO DOWN   GOLD UP   4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99. GDX UP   4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX:$SPX is too high. OIL UP   ENERGY UP   FINANCIALS DOWN   REITS UP   *Bullish reversal bar held above MA(20). 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.
*DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals. Use it as a filter, don’t trade directly.

SEASONALITY: WEEK AFTER JUNE TRIPLE WITCHING WAS BEARISH

See 06/18 Market Recap for more details.

INTERMEDIATE-TERM: INITIAL REBOUND TARGET AROUND 1150 AND TIME TARGET AROUND 06/24

See 06/14 Market Recap for more details.

SHORT-TERM: COULD BE AT LEAST ONE SMALL LEG DOWN TOMORROW

No good news today, as mentioned in the After Bell Quick Summary, could be a Bear Flag in the forming in chart 1.0.0 S&P 500 SPDRs (SPY 60 min), which usually means one more leg down at least. Another way to read the chart is to take a look at what happened in the past after so many consecutive red bars (6 or more red bas). Looks to me, usually after a few blue bars rebound there’d be a few more red bars down, then, if lucky enough, a sizeable rebound would kick in, but if not lucky then there’d be the 3rd leg down.

So my conclusion is that bulls need some lucks tomorrow. Hopefully:

1. The both VIX and SPX red trick (see chart 6.2.4a SPX and VIX Divergence Watch) mentioned in today’s After Bell Quick Summary could work.
2. The Reversal Bar setup could work which had 67% winning rate if it could be confirmed tomorrow.

 

0.0.2 Combined Intermediate-term Trading Signals, I mentioned this chart yesterday, 3 points validated trend line was broken which argues that the market may have topped.