Live Update

Wednesday, June 30, 2010

06/30/2010 Market Recap: Head and Shoulders Top To Be Confirmed

  TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart)
Long-term 3 of 3 are BUY    
Intermediate 3 of 3 are SELL 5 of 5 are NEUTRAL Non-Stop Model is in SELL mode
Short-term 2 of 2 are SELL 3 of 6 are OVERSOLD 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%, bottomed?
6.3.2c Major Distribution Day Watch: MDD > 35, bottomed?
BEARISH 4.1.0 S&P 500 Large Cap Index (Weekly): bearish engulfing was bearish for the next several weeks.
*4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Top to be confirmed.
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM:
SSO/SDS, UPRO/SPXU
ST Model   *Possible sell short signal, if SPY tomorrow’s open > tomorrow’s close and has a  new low. May not be a good timing, so be careful.
Reversal Bar    
NYMO Sell    
Non-Stop(RSP) 06/30 S N/A *Closed the long entered on 06/17 with loss and shorted on 06/30.
Be sure to check the chart from 8.2.2a Combined Intermediate-term Trading Signals – 2004 to 8.2.2g Combined Intermediate-term Trading Signals – 2010 to understand the risks of trading on trend following indicators which usually has a lower winning rate and relies heavily on a few winning trades to profit in the long run.

*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: BEARISH MONDAY TO WEDNESDAY, BULLISH THURSDAY AND FRIDAY

Form the July seasonality chart (courtesy of sentimentrader) below, we can see tomorrow and the day after tomorrow are very bullish. In the 06/25 Market Recap, I’ve also listed some statistics arguing for bullish tomorrow and the day after tomorrow, take time to review them because the bull’s only hope is the seasonality now. The bottom line, as mentioned in 06/29 Market Recap, QQQQ down 7 days in a row means the downward pressure is high so most likely the very first rebound attempt would fail and after that at least there shall be one more leg down.

JulySeasonality 

INTERMEDIATE-TERM: HEAD AND SHOULDERS TOP TO BE CONFIRMED

4.1.0 S&P 500 Large Cap Index (Weekly), the main story today is the Head and Shoulders Top neckline breakdown, considering the statistics mentioned in 06/25 Market Recap about weekly bearish engulfing, this Head and Shoulders Top could be as real as it gets, so be careful bulls.  Personally, I prefer to wait for a few days to make sure this is indeed a Head and Shoulders Top breakdown.

SPXWeekly 

I purposely post the chart below in advance so that bulls could be prepared, even eventually it proves that I’m totally wrong, it’s no harm to be prepared for the worst case I think. If, I mean IF, indeed the Head and Shoulders Top is confirmed in the following days then the current correction should be at higher level than that of happened in June 2009 and Jan 2010. If the 03/06/2009 to 04/26/2010 was a clear 5 wave up then at least what we are having now is an ABC correction, so the min correction time could be Fib 38.2% from 03/06/2009 to 04/26/2010 which is on 10/02/2010. This looks still far far away and that’s why I want bulls to be prepared in advance. By the way, there’re 2 multiple cycle date confluences area on the chart below. One is 07/31 to 08/02, the other one is 08/22 to 08/24. These 2 time windows could be very important although right now it’s hard to know whether they mean a top or bottom.

TimeTarget 

SHORT-TERM: BE CAREFUL OF NASDAQ INTRADAY CUMULATIVE TICK

I said in today’s After Bell Quick Summary that I’d WOW tonight. Here’s the chart. I don’t understand what’s going on here but the cold fact is the previous 8 times (06/25 Market Recap, 06/02 Market Recap, 05/26 Market Recap, 05/18 Market Recap, 05/12 Market Recap, 05/03 Market Recap, 04/29 Market Recap, 04/20 Market Recap and 04/14 Market Recap) when I WOW-ed, the market was all sold off hard no later than the day after tomorrow, so be careful bulls.

IntradayCumTICK 


HIGHLIGHTS OF THE OTHER ETFS IN MY
PUBLIC CHART LIST
*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.
  TREND *DTFMS COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ UP *SELL  0.1.3 Nasdaq 100 Index Intermediate-term Trading Signals: ChiOsc a little too low.
IWM DOWN *SELL *Ascending Broadening Wedge breakdown, target $54.97.
CHINA DOWN
EMERGING UP SELL
EUROPEAN UP
CANADA DOWN SELL
BOND UP BUY Breakout but 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 DOWN SELL *ChiOsc a little too low.
FINANCIALS DOWN
REITS UP *SELL 4.4.3 Real Estate iShares (IYR Weekly): Pay attention to XHB weakness!
MATERIALS *DOWN SELL  
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