09/14/2010 Market Recap: Two Consecutive Small Body Bars

TREND MOMENTUM COMMENT Long-term 2 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 BUY 6 of 6 are NEUTRAL The trend is up, I hold no long position overnight. GANN DAY MOON/SOLAR CYCLE CONCLUSION 9/10, 9/21 09/08 / 09/08 9/5, 9/6 Next pivot date: 09/07 – 09/10, 09/21 – 09/23

BULLISH BEARISH 0.2.2 Extreme Put Call Ratio Watch: CPCI too high, topped? 0.2.5 NYSE Total Volume: Volume too low, topped? 6.4.6a QQQQ Black Bar Watch: Black bar, top is close? 6.4.4 SPY Price Volume Negative Divergence Watch: Price volume negative divergence. 1.0.6 SPY Unfilled Gaps: 17 unfilled gaps, the max was 18.

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop 09/07 L N/A ST Model

*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.

SHORT-TERM: STILL EXPECT PULLBACK, NOT SURE WHEN AS THE MARKET MAY STILL HAVE A FEW DAYS UP

Maintain the forecast mentioned in 09/13 Market Recap: Expect a pullback, but it may occur after a few days small up or consolidation.

I saw a couple of not so good signs today, but they’re not very solid so for fun only.

The chart below shows a few Fib 100% coincidences. Theoretically, when both price and time target are met, it may mean that today could be a top of some kind. I’m not sure though, just a possibility.

1. 09/14 is Fib 100% from 07/01 low to 08/09 high in terms of trading days.
2. 89 point from 06/08 low to 06/21 high = 89 point from 07/01 low to 07/13 high = 88 point from 08/27 low to 09/14 high.

 

I mentioned a hollow red bar in chart 0.1.0 SPY Short-term Trading Signals may mean a top in today’s After Bell Quick Summary. Actually, besides the hollow red bar, 2 consecutive small body bars (kind of Doji bars) also don’t look good. The chart below highlighted all the 2 consecutive small body bars (|open - close| < 0.25 * ATR(10) and RSI(2) > 85) formed in recent years. From the chart, we can see:

1. Chances are high for at least a short-term pullback thereafter. Although in some cases, SPY simply up and up and up, and this is why in today’s After Bell Quick Summary, I said, in order to avoid a pullback, a huge up day is needed.
2. Short at today’s close, cover at the very first red day close since year 2000, you have 71% chances.

  

INTERMEDIATE-TERM: BULLISH, BUT HOW BULLIS IS TO BE REASSESSED

See 09/10 Market Recap for more details.

SEASONALITY: SEPTEMBER IS BEARISH, THE TRIPLE WITCHING FRIDAY IS BULLISH

See 09/03 Market Recap for September seasonality.

Also according to Stock Trader’s Almanac, the September Triple Witching, Dow up 5 straight and 6 of last 7.

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): NDX to SPX ratio too high. *1.1.1 PowerShares QQQ Trust (QQQQ Daily): NAADV MA(10) too high.
IWM	UP
CHINA	UP	Head and Shoulders Bottom in the forming?
EMERGING	UP	4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high. *1.4.1 iShares MSCI Emerging Markets (EEM Daily): Hollow red bar, pullback?
EUROPEAN	UP
CANADA	UP	*TOADV MA(10) too high. Hanging Man and Shooting Star, pullback?
BOND	*UP	3.0.0 20 Year Treasury Bond Fund iShares (TLT Daily): rebound from multiple support. More up?
EURO	*UP
GOLD	*UP
GDX	*UP	4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high and Bearish Engulfing.
OIL	*LA	Black bar under MA(50), pullback?
ENERGY	*LA	*2 Doji in a row, doesn’t look good.
FINANCIALS	*LA	4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
REITS	*LA	4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging and IYR to SPX ratio too high. *3.4.1 Real Estate iShares (IYR Daily): Hollow red bar, pullback?
MATERIALS	UP	*3.4.2 Materials Select Sector SPDR (XLB Daily): Hollow red bar, pullback?

*LA = Lateral Trend.