07/29/2010 Market Recap: Kiss Channel Goodbye?

TREND MOMENTUM COMMENT Long-term 1 of 2 are SELL     Intermediate 3 of 3 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode Short-term Model is SELL 5 of 5 are NEUTRAL Re-shorted on 07/29, hold overnight as the mini target is not met, not because it’s safe to hold overnight. GANN DAY MOON/SOLAR CYCLE CONCLUSION 07/27 07/25 / 07/23 07/26, 07/31, 08/02 Next pivot date: 07/26 – 08/03

BULLISH 0.2.1 10Y T-Bill Yield: ROC(30) < –9, so market bottomed? BEARISH 0.0.2 Combined Intermediate-term Trading Signals: Trend line broken, so market topped?

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop 07/15 L N/A Be sure to check 8.2.2a to 8.2.2g to understand the risks. ST Model 07/20 L Breakeven

*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: 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: A LITTLE BIT BEARISH BIASED

I see more bearish signals than bullish signals but none of them are decisive, so all I can say now are: I’m bearish biased, especially if you look at the chart 1.0.0 S&P 500 SPDRs (SPY 60 min), could be a breakdown then kiss channel goodbye so the market may resume the pullback tomorrow.

So far SPY had 2 bearish reversal days (open high then higher high but eventually close in red) within 3 days. Short at today’s close, cover 3 days later since year 2000 (plus 2 additional conditions: RSI(2) 3 days ago  > 75 and MA(20) up meaning the reversal days happened on an uptrend) , looks like bears have some edges.

 

If you take a look at the SPY daily for what happened after all the dates listed in the chart above, you also could see those dates at least were very close to a short-term top. The chart below shows the most recent 5 cases (highlighted in red).

 

This is just to follow up the top signal I mentioned yesterday: 0.0.2 Combined Intermediate-term Trading Signals, looks like the trend line breakout was confirmed today.

 

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
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