08/23/2010 Market Recap: Rebound still is possible

TREND MOMENTUM COMMENT Long-term 2 of 2 are SELL   Intermediate 2 of 3 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode. Short-term Model is SELL 5 of 5 are NEUTRAL Trend is down but I hold no short position overnight. GANN DAY MOON/SOLAR CYCLE CONCLUSION 8/26, 9/10 08/24 / 08/23 8/23 Next pivot date: 08/23 – 08/26

BULLISH BEARISH 0.2.3 NYSE McClellan Oscillator: the 3rd Hindenburg Omen triggered. *T2105 too high. *0.2.5 NYSE Total Volume: A little bit low.

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop 08/16 S N/A For general direction guide only. ST Model *08/23 S 1.9*ATR(10) *Long closed and short initiated on 08/23.

*Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.

SEASONALITY: NO UPDATE

INTERMEDIATE-TERM: STATISTICS ARE BEARISH

See 08/20 Market Recap for more details.

SHORT-TERM: REBOUND STILL IS POSSIBLE

The bottom line:

1. A short-term rebound still is possible. I’m not very sure though because 0.2.5 NYSE Total Volume is still very low, doesn’t look like a bottom pattern.
2. Since I see another not so bull friendly intermediate-term signal, so I’m relatively sure that intermediate-term is bearish.

Why is a short-term rebound still possible? Besides the time, price and chart pattern I mentioned in the 08/20 Market Recap, which are still valid, I see 2 additional good signs:

VIX Leads SPX. This chart seems work very good recently.

 

I’ve mentioned a possible firework setup in today’s After Bell Quick Summary. If you have read the History of the Firework trading setup then you should know it’s a powerful setup if it still works nowadays. Of course, I heard that the CPC < 0.8 today was caused by huge speculation calls on an individual stock, so whether it’s just a special event that shouldn’t be counted is remained to be seen.

To be fair, if bulls rather believe the above mentioned firework, then should equally accept the fact that according to the chart 6.1.0 Extreme CPCE Readings Watch, CPCE < 0.42 although means short-term bullish but intermediate-term is quite bearish which fits well with all the bearish statistics I listed in  the 08/20 Market Recap.

 

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

	TREND	DTMFS	COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ	UP	SELL
IWM	UP	SELL
CHINA	UP		Head and Shoulders Bottom in the forming?
EMERGING	UP	SELL	4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high.
EUROPEAN	DOWN	SELL	Could be a breakdown of an important support.
CANADA	UP	*SELL	*Black bar doesn’t look good.
BOND	UP		4.2.0 20 Year Treasury Bond Fund iShares (TLT Weekly): Too far away from MA(200).
EURO	DOWN	SELL
GOLD	UP
GDX	UP		4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high.
OIL	DOWN	*SELL
ENERGY	DOWN	SELL
FINANCIALS	DOWN	SELL	4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
REITS	UP	SELL	4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
MATERIALS	UP	SELL

*DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals. Use it as a filter, don’t trade directly.