08/24/2010 Market Recap: Test 07/01 Low?

TREND MOMENTUM COMMENT Long-term 2 of 2 are SELL   Intermediate 3 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.

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 *Breakeven *Adjust stop loss.

*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.

Remember the T2105 back test I mentioned in 08/20 Market Recap? Since T2105 keeps making new high since then, so I tightened the test conditions: Sell short at close when MACD(10, 200, 1) > 0.60 (so called normalizing), cover when MACD(10, 200, 1) < 0.60 since year 2000. The test results below should be clear enough, so I won’t bother to blah blah here again.

The chart below is the visual back test of the above test results. For you to “feel” it like feel the force around you sort of feel.

SHORT-TERM: THE 07/01 LOW MAY BE TESTED

The bottom line:

1. Since both Head and Shoulders Top and Rising Wedge text book target point to the same 07/01 low, so the 07/01 low may be tested.
2. The next important pivot date is around 08/26(+-).
3. Since the selling this time is weaker than the previous 3 times since 04/26, so the bullish call is a potential Head and Shoulders Bottom in the forming. Personally, however, I won’t put my bet on this though.

1.0.0 S&P 500 SPDRs (SPY 60 min), this chart explains why the 07/01 low may be tested.

 

The chart below should also clearly explain why 08/26 is an important date. Especially, if you’ve noticed that the 2 of the most important dates so far this year were 04/26 high and 05/25 low, both happened around date 26. In addition I also have a 3rd party document (cannot be disclosed yet) claiming that 08/26 is very important. As for whether 08/26 is low or high, is hard to say. Just if the market pullbacks to 08/26 and at the same time reaching the 07/01 low at SPX 1010 or SPX 1040 (for possible Head and Shoulders Bottom as shown on the chart below), then chances are good that 08/26 could be an important low.

 

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	*DOWN	SELL
IWM	*DOWN	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
CANADA	UP	SELL
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	*DOWN	SELL	4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
MATERIALS	*DOWN	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.