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Monday, August 2, 2010

08/02/2010 Market Recap: Watch 2 Overbought Signals

  TREND MOMENTUM COMMENT
Long-term 1 of 2 are SELL    
Intermediate 2 of 3 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode
Short-term Model is BUY 4 of 5 are NEUTRAL Trend is up but I hold no long position overnight.
GANN DAY MOON/SOLAR CYCLE CONCLUSION
8/6,8/11,8/26 08/09 / 08/08 8/2,8/9,8/11,8/23 Next pivot date: 08/09 – 08/11, 08/23 – 08/26
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 FIRST NINE TRADING DAYS OF AUGUST ARE HISTORICALLY WEAK

See 07/30 Market Recap for more details.

INTERMEDIATE-TERM: THE CORRECTION SINCE 04/26 ISN’T OVER, THE REBOUND SINCE 07/01 IS NEAR END

The market action today answered the question I raised in 07/30 Market Recap: Yes, we did have a new recovery high. However, as you’ll see in the short-term session below, there’re 2 very important signals are now overbought, so the chances are very good that we’ll see at least a short-term pullback. So I’ll temporarily maintain the forecast below (will adjust the forecast once I see how the market actually pulls back):

  1. The correction since 04/26 is not over.
  2. The rebound since 07/01 could be very close to an end.

SHORT-TERM: A LITTLE BIT OVERBOUGHT

I know once you see the title above, the very first reflection will be overbought can be more overbought. However, I’ve explained this in the 07/26 Market Recap that the overbought signals I watch are by no means any ordinary signals and I believe you should still remember what happened when I used “overbought” as title in 07/26 Market Recap. Based on my many years observation these signals should have some credibility. Of course, today is not extreme enough to use the “overbought” as the title, but I think it’s no harm to remind you in advance especially if the market rises huge again tomorrow.

T2122, my ultimate weapon for watching overbought/oversold.

T2122 

T2112, NYSE stocks 2 std dev above MA(40). Not very extreme, but prior to the year 2009, today’s reading would be a record high.

T2112 


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 $15.30.
BOND UP
EURO UP
GOLD DOWN *6.4.5 GLD and UUP Watch: GLD black bar may mean US$ rebound tomorrow.
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 *UP
REITS UP
MATERIALS UP
Posted by Cobra at 7:11 PM
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