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SEASONALITY: EARLY THIS WEEK IS BULLISH, OE FRIDAY IS BEARISH
See 07/09 Market Recap for more details.
INTERMEDIATE-TERM: EXPECT HUGE REBOUND BEFORE 2ND LEG DOWN
Still expect a 2nd leg down but since the retailers sentiment is way too bearish so the rebound we have now could be huge. See 07/09 Market Recap for more details.
SHORT-TERM: MARKET MAY TURN DOWN SOON UNLESS UP HUGE TOMORROW
Time, price and price pattern all are arguing that the market may turn lower very soon, unless the market could up huge tomorrow. So a key day tomorrow.
The chart below contains the bull’s best hopes. Up huge tomorrow then most likely we’re going to see the last year’s mad cow again. In this case, forget about all the other blah blah I said in today’s report. If however, a small bar tomorrow, then be careful, chances a very good we may see a little bit bigger pullback thereafter.
RSI now has a little little bit negative divergence, fulfilled the pre-condition required for a sizable pullback. The divergence may appear not large enough so combining with the chart above – extreme high NYADV MA(5) almost guarantees a new recovery high, so chances are pretty good that SPX will make a new recovery high (higher than the Tuesday’s high) tomorrow.
OK, all the good news for bulls ends above. To summarize, a new recovery high is very possible but if the market cannot up big then bulls should be careful about a potential big pullback.
Now the bear’s turn. Why am I saying the market may turn lower soon?
Price and time target both fulfilled, especially the time, 07/16 is very close now.
The Multiple Gann Day below also argues that around 07/16 could be very important.
For price pattern, now SPY is testing its primary bear trend line. A Hollow Red bar (Close > Open but Close < Yesterday’s Close) could be a potential reversal bar.
VIX leads SPX.
0.2.1 10Y T-Bill Yield, looks like a typical breakdown then back test before going down further. TNX usually leads SPX, so it’s not a good news for the stock market.
The weekly chart should be more clear on why TNX leads SPX and why the line that was broken and now retested is very important.
Last but not the least, starting from tomorrow, seasonality won’t be so bull friendly anymore. And also don’t forget the WOW I mentioned in the yesterday’s report.
HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
| TREND | COMMENT – *New update. Click BLUE to see chart if link is not provided. | |
| QQQQ | DOWN | 4.1.1 Nasdaq 100 Index (Weekly): Bearish 1-2-3 formation, target 1565. |
| IWM | DOWN | |
| CHINA | DOWN | |
| EMERGING | UP | |
| EUROPEAN | UP | 4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.45. |
| CANADA | DOWN | 4.1.5 iShares CDN S&P/TSX 60 Index Fund (XIU.TO Weekly): Bearish 1-2-3 formation, target $15.30. |
| BOND | UP | |
| EURO | UP | |
| GOLD | UP | 4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99. |
| GDX | UP | |
| OIL | DOWN | |
| ENERGY | DOWN | 4.4.1 Energy Select Sector SPDR (XLE Weekly): Bearish 1-2-3 formation, target $43.14. |
| FINANCIALS | DOWN | |
| REITS | DOWN | 4.4.3 Real Estate iShares (IYR Weekly): Pay attention to XHB weakness! |
| MATERIALS | DOWN | 4.4.4 Materials Select Sector SPDR (XLB Weekly): Double Top, target $23.27. |
