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Thursday, June 24, 2010

06/24/2010 Market Recap: SPX Down 4 Days in a Row

  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 5 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 07/31, 08/20-08/23 Next pivot date: 07/07?
BULLISH 8.1.1 Normalized NATV/NYTV: Too low, so bottomed?
0.2.1 10Y T-Bill Yield: ROC < –9%, so bottomed?
*0.2.2 Extreme Put Call Ratio Watch: all 3 ratios are high, so bottomed?
BEARISH 0.0.2 Combined Intermediate-term Trading Signals: trend line broken, so topped?
*6.3.2b Major Distribution Day Watch: 2 MDD within 5 days means an intermediate-term downtrend?
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ST Model   *Buy setup is no longer valid. 
Reversal Bar     *Buy setup is no longer valid.
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  
BOND UP BUY ChiOsc is way too high now.
EURO DOWN *BUY
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  
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: OFFICIALLY STILL UP BUT BEARISH BIASED AS MORE TOP SIGNALS PILING UP

Officially the intermediate-term trend is still up because there’re no lower high and lower lower yet on the SPX daily chart, and the 2 main intermediate-term model SPY ST Model and Non-Stop Model in the table above are still in buy mode. However, since there’re already 2 signals arguing for a market top so all I can say are I’m bearish biased toward the intermediate-term trend. If down day again tomorrow (or rise not much) then there could be the 3rd top signal triggered – the weekly Bearish Engulfing which successfully called the April top (see 04/30 Market Recap). So a down day tomorrow will make the possibilities much higher that the market has topped.

0.0.2 Combined Intermediate-term Trading Signals, I mentioned this top signal yesterday, a broken trend line usually means a market top. The trend line held today so the trend line broken should be confirmed.

CPCEWatch 

6.3.2b Major Distribution Day Watch, this is a bad news today. See blue dashed lines (means there was a short-term rebound thereafter) and red dashed lines (means there’s no short-term rebound thereafter), 2 Major Distribution Days within 5 days, most likely mean an intermediate-term downtrend. Of course, since there’re more blue dashed lines so short-term more likely we’ll see a rebound.

 2MDDWithin5Days

SHORT-TERM: EXPECT A REBOUND AS EARLY AS TOMORROW

I expect a short-term rebound for 5 reasons:

6.3.2b Major Distribution Day Watch, I’ve mentioned this in the intermediate-term session above, the chances for a short-term rebound are higher. Plus 6.3.2a Major Distribution Day Watch mentioned in today’s After Bell Quick Summary, there’re 67% chances a green day tomorrow.

In today’s After Bell Quick Summary, I also mentioned if SPX down 4 days in a row then there’re more than 70% chances a green day the next day. The chart below shows all the recent cases when SPX down 4 days in a row. All I can say are that indeed we may see a short-term rebound. But if your luck is not good then buy dip today would be miserable, so I don’t mean to imply that you should buy this dip, just if you happen to have a trapped long position, wait for 2 more days to bet your luck may not be a very bad idea.

SPX4ConsecutiveDownDays 

0.2.2 Extreme Put Call Ratio Watch, see green dashed lines, CPC/CPCE/CPCI too high at the same time means panic, therefore market could be bottomed.

ExtremePCRatioWatch 

1.0.0 S&P 500 SPDRs (SPY 60 min), the RSI in this chart is very reliable, especially when there’s a positive divergence.

SPY60min 

0.2.1 10Y T-Bill Yield, bullish reversal bar looks promising. Yield usually leads the market.

TNXDaily 

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