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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
See 07/30 Market Recap for more details.
SHORT-TERM: PIVOT DAY TOMORROW, NOW LOOKS LIKE A TOP
Maintain the forecast for a top around 08/06 pivot date (either short-term or intermediate-term). See 08/03 Market Recap for detailed explanation on why it’s 08/06. The charts below may also support my speculation about a top around tomorrow (allow +/- 1 day error), especially if the market opens high but closes lower. By the way, trading wise, as you can see the table above, even I guess the top is close, but I’m not shorting this market yet because I always let the market go first.
6.2.3 VIX:VXV Trading Signals, a little bit too low so at least I don’t think the market could go too high.
0.2.5 NYSE Total Volume, a little bit low, so the market could have topped.
As for tomorrow’s NFP, I don’t think it’s bad, however the discussion about why NFP won’t be bad is beyond the scope of this report, so I’ll stop here. From the pure TA aspect, I’ve already mentioned in today’s After Bell Quick Summary, even if the NFP report is bad the market gaps down, the gap will likely be filled. The reason is simple, take a look at the chart below, for the past year and half, even we had record number of unfilled gaps, but none of them were back to back remaining unfilled, right? There’re at least several days apart between each unfilled gaps, correct? Since we already got an unfiled gap today (pink line) so this basically guarantees a gap down tomorrow (if any) will be filled very soon.
As for general trading pattern on NFP Report Day, the contents below are from Bespoke:
If Friday’s report comes in significantly stronger and the market opens up, history says not to chase it. If the report comes in much weaker than expected and the market opens down, investors should buy on weakness.
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 | |
| EUROPEAN | UP | |
| CANADA | UP | 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 | UP | |
| REITS | UP | |
| MATERIALS | UP |
