Live Update

Friday, April 30, 2010

04/30/2010 After Bell Quick Summary

OK, bullish Monday? Plus according to the Stock Trader’s Almanac, the first trading of May (that’s the next Monday), Dow up 9 of last 11. And from all the initial evidences I’ve collected so far, it does look like that bulls have some chances the next Monday, not sure, need do more research though.

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The bottom line, I don’t think this is a buyable dip at least not today. I’ll talk about this in the weekend report as right now the most important thing is to enjoy your weekend!

Thursday, April 29, 2010

04/29/2010 Market Recap: Nasdaq Traders Got Very Excited

  TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart)
Long-term 3 of 3 are BUY    
Intermediate 2 of 3 are SELL 3 of 5 are NEUTRAL Non-Stop Model is in BUY mode
Short-term 1 of 1 are SELL 6 of 6 are NEUTRAL SPY ST Model is in BUY mode
ATTENTION *1.0.6 SPY Unfilled Gaps: 17 unfilled up gaps. (max was 18)
0.1.1 SPX Intermediate-term Trading Signals: Could be an Ascending Broadening Wedge in the forming.
BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246.
0.2.3 NYSE McClellan Oscillator: NYHGH new high could mean SPX new high ahead.
BEARISH 0.1.1 SPX Intermediate-term Trading Signals: CPCE MA(10) too low.
0.2.2 Extreme Put Call Ratio Watch: CPCE MA(5) too low.
4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high.
4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high.
CONCLUSION
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU
ST Model *04/29 L 1.5xATR(10) *Be careful, don’t get too bullish, the uptrend is weakening.
Reversal Bar *04/29 L 0.9xATR(10)
NYMO Sell    
Non-Stop    
VIX MA ENV *04/29 L 1.0xATR(10)  
OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ UP   4.1.1 Nasdaq 100 Index (Weekly): BPNDX overbought and too high above MA(200).
IWM UP   4.1.2 Russell 2000 iShares (IWM Weekly): Too high above MA(200).
CHINA DOWN  
EMERGING DOWN   Bearish 1-2-3 formation, target $39.90.
CANADA UP  
BOND ?   Testing important resistance, will upgrade to up from down if breakout.
DOLLAR UP FXE breakdown to new low!
GOLD UP  
GDX UP  
OIL ? $WTIC tests MA(50) again, will downgrade to down from up if breakdown.
ENERGY UP  
FINANCIALS DOWN   4.4.2 Financials Select Sector SPDR (XLF Weekly): Too high above MA(200).
Bearish 1-2-3 formation, target $15.29.
REITS UP
MATERIALS UP    

*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: MOSTLY THE MONTH’S LAST TRADING WEEK WAS RED SINCE AUG 2009

See 04/23 Market Recap for more details.

CYCLE ANALYSIS: THE NEXT IMPORTANT DATE IS 05/06

The next potential turn date is 05/06 (+-) which could either be a top or a bottom depending on how the market marches to that date. See 04/16 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

See 04/26 Market Recap for more details.

SHORT-TERM: NASDAQ TRADERS GOT VERY EXCITED AGAIN

Tomorrow should be another key day for bulls, because from the chart 1.0.0 S&P 500 SPDRs (SPY 60 min), there’s a possibility that today was just a typical back test of the broken trend line, so if the market drops tomorrow then it’d make things a little bit complicated for bulls.

 SPY60min

I have no idea whether tomorrow will be up or down, just one thing I’d like to remind you: The Nasdaq traders got very excited today, maybe too excited, because there’s almost no minus TICK the whole day today (means nobody is selling only buyers left in the market) and therefore the Intraday Cumulative TICK (Courtesy of sentimentrader) skyrocketed again. A big WOW again, the last 2 times I WOW-ed was in 04/14 Market Recap and 04/20 Market Recap.

IntradayCumTick

04/29/2010 After Bell Quick Summary

OK, my trick says 41 out of 57 times a green close tomorrow. The bottom line, don’t get too excited, because I’m probably going to WOW again tonight (assuming my calculation is correct). The last 2 times, I WOW-ed was on 04/14 Market Recap and 04/20 Market Recap.

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Wednesday, April 28, 2010

04/28/2010 Market Recap: VIX MA ENV Buy Setup

  TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart)
Long-term 3 of 3 are BUY    
Intermediate 2 of 3 are BUY 3 of 5 are NEUTRAL Non-Stop Model is in BUY mode
Short-term 1 of 1 are SELL 5 of 6 are NEUTRAL SPY ST Model is in BUY mode
ATTENTION 1.0.6 SPY Unfilled Gaps: 16 unfilled up gaps. (max was 18)
0.1.1 SPX Intermediate-term Trading Signals: Could be an Ascending Broadening Wedge in the forming.
BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246.
0.2.3 NYSE McClellan Oscillator: NYHGH new high could mean SPX new high ahead.
0.2.0 Volatility Index (Daily): Too high above MA ENV(10,20), also out of BB.
BEARISH 0.1.1 SPX Intermediate-term Trading Signals: CPCE MA(10) too low.
0.2.2 Extreme Put Call Ratio Watch: CPCE MA(5) too low.
4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high.
4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high.
CONCLUSION
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU
ST Model *Long if SPY is up tomorrow. The stop loss will be 1.5 x ATR(10).
Reversal Bar *Long if SPY is up tomorrow. The stop loss will be 0.9 x ATR(10).
NYMO Sell    
Non-Stop    
VIX MA ENV     *Long if SPY tomorrow’s open < tomorrow’s close. The stop loss will be 1 x ATR(10).
OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ UP   4.1.1 Nasdaq 100 Index (Weekly): BPNDX overbought and too high above MA(200).
IWM UP   4.1.2 Russell 2000 iShares (IWM Weekly): Too high above MA(200).
CHINA DOWN  
EMERGING DOWN   Bearish 1-2-3 formation, target $39.90.
CANADA UP  
BOND ?   Testing important resistance, will upgrade to up from down if breakout.
DOLLAR UP FXE breakdown to new low!
GOLD UP  
GDX UP  
OIL ? $WTIC tests MA(50) again, will downgrade to down from up if breakdown.
ENERGY UP  
FINANCIALS DOWN   4.4.2 Financials Select Sector SPDR (XLF Weekly): Too high above MA(200).
Bearish 1-2-3 formation, target $15.29.
REITS UP
MATERIALS UP    

*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: MOSTLY THE MONTH’S LAST TRADING WEEK WAS RED SINCE AUG 2009

See 04/23 Market Recap for more details.

CYCLE ANALYSIS: THE NEXT IMPORTANT DATE IS 05/06

The next potential turn date is 05/06 (+-) which could either be a top or a bottom depending on how the market marches to that date. See 04/16 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

See 04/26 Market Recap for more details.

SHORT-TERM: A FEW LONG SETUP NEED CONFIRMATION TOMORROW

From SPY daily chart, today is a typical consolidation day therefore the direction is unknown, need see tomorrow (see 8.0.1 Small Body Bar Trading Rule for why). However as discussed in 04/27 Market Recap, if the market repeats the past Major Distribution Day pattern, then the small green day today probably means that the market was bottomed.

MDD 

Of course, calling a market bottom for now is merely a speculation. For trading, we better have a good setup. And today we’re lucky to have one: 6.2.0a VIX Trading Signals (ENV), VIX dropped back into MA ENV(10, 20) triggering a potential long setup.

VIXENVSetup 

Below are the back test summary for the VIX MA ENV trading setup since 2002.

If wait until you’re sure that SPY tomorrow Open < tomorrow Close before entering a long position, the winning rate is 81%.

 VIXMAEnvSetupSummary

If buy at tomorrow’s open without waiting for a confirmation then the winning rate is 59%.

VIXMAEnvSetupSummary4NoConfirm

04/28/2010 After Bell Quick Summary

The trick today is to sell the close and cover the day after tomorrow at close. I have no idea if the trick will work or not this time because according to what I mentioned in the yesterday’s recap, a small red or green today will probably mean that the market was bottomed. Besides, a potential VIX ENV Buy setup could be triggered if tomorrow SPY open < tomorrow SPY close. I will discuss this in details tonight, overall, signals seem favor bulls.

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Tuesday, April 27, 2010

04/27/2010 Market Recap: Key Day Tomorrow

  TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart)
Long-term 3 of 3 are BUY    
Intermediate 3 of 3 are BUY 3 of 5 are NEUTRAL Non-Stop Model is in BUY mode
Short-term 1 of 1 are BUY 4 of 6 are NEUTRAL SPY ST Model is in BUY mode
ATTENTION 1.0.6 SPY Unfilled Gaps: 16 unfilled up gaps. (max was 18)
0.1.1 SPX Intermediate-term Trading Signals: Could be an Ascending Broadening Wedge in the forming.
BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246.
0.2.3 NYSE McClellan Oscillator: NYHGH new high could mean SPX new high ahead.
*0.2.0 Volatility Index (Daily): Too high above MA ENV(10,20), also out of BB.
BEARISH 0.1.1 SPX Intermediate-term Trading Signals: CPCE and CPC MA(10) too low.
4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high.
4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high.
CONCLUSION
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU
ST Model *Stopped out of long position with gains.
Reversal Bar  
NYMO Sell    
Non-Stop    
OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ UP   4.1.1 Nasdaq 100 Index (Weekly): BPNDX overbought and too high above MA(200).
IWM UP   4.1.2 Russell 2000 iShares (IWM Weekly): Too high above MA(200).
CHINA *DOWN  
EMERGING *DOWN   *Bearish 1-2-3 formation confirmed trend line breakdown. So downgrade the trend to down from up. Target $39.90.
CANADA UP  
BOND *?   *Testing important resistance, will upgrade to up from down if breakout.
DOLLAR UP *FXE breakdown to new low!
GOLD UP  
GDX UP  
OIL *? *$WTIC tests MA(50) again, will downgrade to down from up if breakdown.
ENERGY UP  
FINANCIALS *Down   4.4.2 Financials Select Sector SPDR (XLF Weekly): Too high above MA(200).
*Bearish 1-2-3 formation confirmed trend line breakdown. So downgrade the trend to down from up. Target $15.29.
REITS UP
MATERIALS UP    

*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: MOSTLY THE MONTH’S LAST TRADING WEEK WAS RED SINCE AUG 2009

See 04/23 Market Recap for more details.

CYCLE ANALYSIS: THE NEXT IMPORTANT DATE IS 05/06

The next potential turn date is 05/06 (+-) which could either be a top or a bottom depending on how the market marches to that date. See 04/16 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

See 04/26 Market Recap for more details.

SHORT-TERM: BIG RED TOMORROW MEANS MORE PULLBACK AHEAD WHILE SMALL BAR MEANS A BOTTOM

Take a look at 0.1.0 SPY Short-term Trading Signals and 0.1.2 QQQQ Short-term Trading Signals, technically, no damage yet, so the sell off today might not mean anything, need see tomorrow.

SPYShortTermQQQQShortTerm

The 1.4.1 iShares MSCI Emerging Markets (EEM Daily) and  3.4.0 Financials Select Sector SPDR (XLF Daily) illustrate what I consider as technical damage: Both have formed a bearish 1-2-3 formation, confirming lower high (since 3 is lower than 1) and lower low (breakdown below 2 today forming a lower low), so officially we can say they’re in downtrend now (well, strictly speaking it depends on your time frame). Now, take a look at the SPY and QQQQ chart above again, even in the worst case, say, assume they’ll go down further, at the most they’re forming the 2 of a possible bearish 1-2-3 formation now, which is far away from confirming a downtrend, as firstly a lower high 3 is needed and after 3, a breakdown below 2 to confirm a lower low also is needed, so again SPY and QQQQ have no technical damage yet.

EEMDailyXLFDaily

As illustrated in the chart below, tomorrow could be a key day: keep selling off then most likely a correction similar to the June 2009 we’ll see, while small red or green then most likely bottomed the market was (is).

MDDWatch

My speculation about tomorrow has already been mentioned in today’s After Bell Quick Summary, for 4 reasons I expect a green day:

  1. 6.3.2a Major Distribution Day Watch, the day after a Major Distribution Day is more likely a green day.
  2. 6.5.1 SPX and FOMC, FOMC day (that’s tomorrow) is more likely a green day.
  3. 6.5.2b Month Day Seasonality Watch, the 3rd last trading day of a month is mostly a green day.
  4. 0.2.0 Volatility Index (Daily), according to the statistics about VIX surging more than 20%, very good chances the next day is a green day, at least won’t drop much.

So in another word, looks like bulls have more chances on both short and intermediate term.

In addition:

Today’s Nasdaq Intraday Cumulative TICK (courtesy of sentimentrader) is at very very extreme level so it also favors an up day tomorrow.

IntradayCumTick

1.0.0 S&P 500 SPDRs (SPY 60 min), ChiOsc is way too low also says that at least we could see a rebound tomorrow morning.

SPY60min

04/27/2010 After Bell Quick Summary

OK, any bulls left daring to buy this dip? Well, I have plenty of EXCUSES to call a green day tomorrow, may not green much though.

1. The day after a Major Distribution Day (NYSE Down Volume : Up Volume > 9) is more likely a green day.

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2. FOMC tomorrow which also is likely a green day.

2

3. The last 3rd trading day of a month is amazingly always green although the last 2 days are not so bull friendly.

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4. Statistics show whenever VIX surges more than 20%, the next day is more likely a green day.

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The bottom line, see 04/16 Market Recap, ever since the March 2009 rally, almost all Major Distribution Day meant a bottom except the June 2009. So we’ll have to wait until tomorrow to get more clues about whether the market was bottomed today (or very close) or this is going to be a June 2009 kind of sell off.

Monday, April 26, 2010

04/26/2010 Market Recap: NYHGH New High Again

  TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart)
Long-term 3 of 3 are BUY    
Intermediate 3 of 3 are BUY 4 of 5 are OVERBOUGHT Non-Stop Model is in BUY mode
Short-term 1 of 1 are BUY 4 of 6 are NEUTRAL SPY ST Model is in BUY mode
ATTENTION

0.2.3 NYSE McClellan Oscillator: Negative divergence.
1.0.6 SPY Unfilled Gaps
: 16 unfilled up gaps. (max was 18)
0.1.1 SPX Intermediate-term Trading Signals: Could be an Ascending Broadening Wedge in the forming.

BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246.
*0.2.3 NYSE McClellan Oscillator: NYHGH new high could mean SPX new high ahead.
BEARISH 0.1.1 SPX Intermediate-term Trading Signals: CPCE and CPC MA(10) too low.
4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high.
4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high.
CONCLUSION
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU
ST Model 02/26L 04/19 low *Stopped out of long position with gains.
Reversal Bar  
NYMO Sell    
Non-Stop    
OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ UP  

4.1.1 Nasdaq 100 Index (Weekly): BPNDX overbought and too high above MA(200).
0.1.0 SPY Short-term Trading Signals: Ascending Triangle breakout, target $51.48.
ChiOsc a little too high.

IWM UP  

ChiOsc a little too high.
4.1.2 Russell 2000 iShares (IWM Weekly): Too high above MA(200).

CHINA ?  
EMERGING UP    
CANADA UP  
BOND DOWN   0.2.1 10Y T-Bill Yield: Breakout of a Bull Flag, so yield could up while bond will be down.
DOLLAR UP
GOLD UP  
GDX UP  
OIL UP
ENERGY UP   4.4.1 Energy Select Sector SPDR (XLE Weekly): Breakout!
FINANCIALS UP  

ChiOsc a little too high.
4.4.2 Financials Select Sector SPDR (XLF Weekly)
: Too high above MA(200).

REITS UP
MATERIALS UP    

*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: MOSTLY THE MONTH’S LAST TRADING WEEK WAS RED SINCE AUG 2009

See 04/23 Market Recap for more details.

CYCLE ANALYSIS: THE NEXT IMPORTANT DATE IS 05/06

The next potential turn date is 05/06 (+-) which could either be a top or a bottom depending on how the market marches to that date. See 04/16 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

Although so far the earnings season appears OK (I was expecting sell on news), but still maintain the forecast for a roller coaster intermediate-term ahead. Two major reasons:

6.1.0 Extreme CPCE Readings Watch, see blue dashed lines, extremely low CPCE means a choppy ahead.

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T2111 from Telechart, percent of stocks 2 std dev above MA(200) is a little bit too high. See the blue curve representing SPX, it becomes very choppy whenever T2111 is too high (above the blue horizontal line).

2

From the weekly T2111 below we can see that the current T2111 reading is at very extreme level which in the past also means a choppy market ahead.

 3

SHORT-TERM: EXPECT A NEW HIGH AHEAD BUT MAY SEE SOME SHORT-TERM WEAKNESS FIRST

As mentioned in the 04/23 Market Recap, whenever NYHGH (NYSE New 52 Week Highs) is extremely high, a red day is more like the next day. However the market could only be topped when a negative divergence is formed on the NYHGH first, so accordingly the NYHGH new high means SPX will have a new high ahead. Today we saw a new high and got a red day therefore conforming the pattern. As of tomorrow, we might see a similar pattern (a red day and a SPX new high tomorrow or some day later) because the NYHGH reached a new high again today.

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6.4.3a SPY Bearish Reversal Day Watch, by definition today is a bearish reversal day although the gap up in the morning was a little too small. Anyway, the chart also argues for a short-term weakness, expect either pullback or consolidation ahead.

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