06/28/2010 Market Recap: Firework?

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 07/11 / 07/07 07/31, 08/20-08/23 Next pivot date: 07/07-07/11

BULLISH 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? 0.2.5 NYSE Total Volume: Spike 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? 4.1.0 S&P 500 Large Cap Index (Weekly): bearish engulfing were bearish for the next several weeks. 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 wasn’t confirmed therefore is invalid. Reversal Bar     *Buy setup wasn’t confirmed therefore is invalid. 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 BUY Ascending Broadening Wedge, downward breakout 73% of the time. CHINA DOWN EMERGING UP   EUROPEAN UP CANADA UP *SELL BOND UP *BUY Breakout but ChiOsc is way too high now. EURO DOWN BUY GOLD UP BUY 4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99. GDX UP BUY 4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX:$SPX is too high. OIL UP BUY ENERGY UP *SELL FINANCIALS DOWN BUY REITS UP BUY 4.4.3 Real Estate iShares (IYR Weekly): Pay attention to XHB weakness! MATERIALS UP *BUY

*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: BEARISH MONDAY TO WEDNESDAY, BULLISH THURSDAY AND FRIDAY

See 06/25 Market Recap for more details.

INTERMEDIATE-TERM: THIS WEEK NEUTRUAL, NEXT AND NEXT NEXT WEEK ARE BEARISH

See 06/25 Market Recap for more details.

SHORT-TERM: DIRECTION UNCLEAR BUT BULLISH CPC READINGS MAY MEAN A FIREWORK AHEAD

All I wanted to say are in today’s After Bell Quick Summary, the market dropped again but put call ratio seems bullish therefore we could see some “firework”. Just I don’t know if this “firework setup” originated in 2008 would work this time or not. Besides this, I have nothing else to say. The short-term direction is not clear, could be a Symmetrical Triangle in the forming which means one more leg down but also could be a Head and Shoulders Bottom in the forming which means a rebound. We have to wait until tomorrow to see in which direction the market will breakout. Either way, the move will be big, so buckle your belt!