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SEASONALITY: THE LAST TRADING WEEK OF RECENT MONTH WAS GENERALLY BEARISH
See 07/23 Market Recap for more details.
INTERMEDIATE-TERM: KEY WEEK THIS WEEK
Key week this week, as multiple pivot dates are due until 08/03. The market may turn down on any of those pivot dates to at least test the 07/01 low. However if the market simply keeps rising during this time window, then most likely the same March 2010 mad cow is back. See 07/23 Market Recap for more details.
SHORT-TERM: DIRECTION NOT CLEAR, A LITTLE BIT BULLISH BIASED THOUGH
Mixed signals, so the short-term direction is not clear, need see tomorrow.
Bears have two hopes:
- Seasonality. See today’s After Bell Quick Summary for more details.
- Pivot price and date were met, so the market should turn down and the down size should not be small (See 07/26 Market Recap). As mentioned in the 07/23 Market Recap, this week is an important test for my pivot date forecast skill, because theoretically 07/27 is a perfect turning point. However, I’m not confident about my pivot date forecast skill or to be precise, not confident about the pivot price and date theory yet.
The bulls’ hope is that the pullback today showed no urgency therefore didn’t look like a start of the 2nd leg down to test the 07/01 low. Instead a Bull Flag could be in the forming. And with the help of the price channel support, chances are pretty good that we may see a rebound tomorrow.
The charts below are little bit bear friendly but neither are perfect so I won’t read too much into them.
6.4.3a SPY Bearish Reversal Day Watch. I mentioned this chart in yesterday’s report, claiming 2 failed bearish reversal days in a row were rare, so as expected we did see a red day today. See chart below, now only the bearish reversal day with a follow through red day cases are left on the chart. As we can see that 7 out of 10 times a red day the next day since March 2009 bull market. However the longer history back test doesn’t show any edge for bears. And this is why I won’t read too much into it.
0.0.2 Combined Intermediate-term Trading Signals, 3 points validated trend line was broken today therefore arguing for a market top. However, for a perfect top signal, bears need see the trend line held tomorrow. Besides the trend line is a little bit too steep so I’m not sure the validity of this signal.
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 | UP | 4.1.1 Nasdaq 100 Index (Weekly): Bearish 1-2-3 formation, target 1565. |
| IWM | UP | |
| CHINA | UP | |
| EMERGING | UP | 4.1.6 iShares MSCI Emerging Markets (EEM Weekly): Bear Flag?; EEM:$SPX too high. |
| EUROPEAN | UP | 4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.45; Bear Flag? |
| 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 | DOWN | 4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99. |
| GDX | DOWN | |
| OIL | UP | 4.4.0 United States Oil Fund, LP (USO Weekly): Bear Flag? |
| ENERGY | UP | 4.4.1 Energy Select Sector SPDR (XLE Weekly): Bearish 1-2-3 formation, target $43.14. |
| FINANCIALS | DOWN | |
| REITS | UP | |
| MATERIALS | UP |
