01/18/2011 Market Recap: The Tale of AAPL and IBM ER

TREND MOMENTUM COMMENT Long-term 2 of 2 are BUY   Intermediate 5 of 5 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode. Short-term 4 of 6 are NEUTRAL GANN DAY MOON:SOLAR CYCLE CONCLUSION 01/19,01/26 01/19 : 01/20 Next pivot date: 01/19

BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months. BEARISH 1.0.6 SPY Unfilled Gaps: 25 unfilled gaps, the max is 25. 12/20 Market Recap: Smart/Dumb money confidence spread too high. 0.2.1 10Y T-Bill Yield: ROC(30) >= 9, topped? (Due to Quantitative Easing, I’m not sure if it still works) 1.2.0 INDU Leads Market: INDU had a lower low, so SPX might follow eventually? 8.2.7b Record High ISEE Equities Only Index Readings 2010: Record high, top is close? 0.2.3 NYSE McClellan Oscillator: Hindenburg Omen confirmed. 0.1.1 SPX Intermediate-term Trading Signals: CPC MA(10) too high, so topped? 6.2.3 VIX:VXV Trading Signals: Too low, so topped? 12/31 Market Recap: Lowest ATR(10) readings in 13 years, so topped? 0.2.2 Extreme Put Call Ratio Watch: Both CPC and CPCE are low, so topped? 6.5.1b SPX and NFP: Red NFP day means the trend will turn (down). 8.2.9c QQQQ – 2002 to 8.2.9k QQQQ – 2010: Poor QQQQ performance until the end of January. 01/07 Market Recap: Seasonality wise the rest of January isn’t good. 01/07 Market Recap: Strong Off-Season means poor Earning Season. 01/07 Market Recap: SPX weekly price volume negative divergence, 71% chances SPX < 1271 in 2 weeks. 01/10 Market Recap: SPX down 3 days in a row was a bad sign. 01/10 Market Recap: INDU down Friday and the following Monday was a bad sign. 4.1.0 S&P 500 Large Cap Index (Weekly): Too high above MA(200). 4.0.4 Dow Theory: Averages Must Confirm: BPSPX is way too overbought. *6.2.2a VIX Trading Signals (BB): Short setup triggered on 01/18.

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 TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop 09/07 L N/A ST Model *The buy setup is no longer valid. The model took long on 01/14 intraday but I simply had no way to give the intraday signal. Today the model sets the stop loss to breakeven so this essentially means the setup is no long valid if not entered long on 01/14 intraday. Short-term N/A N/A Trend is UP.  I hold partial long position overnight.

My Thoughts A correction is just a matter of time, but until price confirms, I prefer long to short, with caution though.

SHORT-TERM: AAPL COULD PULLBACK AFTER ER, IBM CLOSE TOMORROW WOULD PREDICT SPX DIRECTION IN NEXT 5 WEEKS

Well, I find myself genius because I’m still able to find something to say today, LOL. As mentioned in 01/14 Market Recap, if ever there’s a counter-strike from bears, this week is the best time. So far the good ER in AH seems not make the SPX skyrocket into the sky, probably it is the very first good sign for bears, but of course we need see tomorrow. Still, before seeing a 1%+ down day and close almost low of day, any pullback expectation is only expectation no matter how many excuses I’m able to find.

Three points for your attention:

• 6.2.2a VIX Trading Signals (BB), the VIX BB short setup has been triggered today. 

• From all the recent AAPL ER actions, looks to me, no matter beat or not beat, it’s not very pleasant thereafter, so be careful.

• Statistically (From Bespoke), how IBM close tomorrow has 80% chances to predict the SPX direction in the next 5 weeks.

INTERMEDIATE-TERM: COULD BE WAVE 5 UP TO SPX 1300+, PIVOT TOP COULD BE AROUND 01/05 TO 01/12

The price and time target I’ve been blah blah for the intermediate-term has finally been met, although the time target seems a little too early but let’s give it another week to see whether the forecast is good or bad. See 01/14 Market Recap for more details.

SEASONALITY: BULLISH TUESDAY, BEARISH FRIDAY, HORRIBLE WHOLE WEEK

See 01/14 Market Recap for more details. Also see 12/31 Market Recap for the January seasonality chart.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

	SIGNAL	COMMENT
QQQQ	01/10 L
NDX Weekly	UP	Too far away from MA(200) and BPNDX is way too overbought.
IWM
IWM Weekly	UP
CHINA
CHINA Weekly	UP	Should have set the trend to down from up but I’ll see how the market rebounds.
EEM
EEM Weekly	UP
XIU.TO	01/06 S
XIU.TO Weekly	UP	Weekly Bearish Engulfing, be careful.
TLT		0.2.1 10Y T-Bill Yield: Symmetrical Triangle? So bond should keep falling?
TLT Weekly	UP
FXE
FXE Weekly	DOWN
GLD		1-2-3 trend change, wait for further confirm, GLD may fall into a downtrend.
GLD Weekly	UP
GDX	12/17 S	1-2-3 trend change confirmed, so GDX could be topped. Be careful about gold itself.
GDX Weekly	DOWN
USO
WTIC Weekly	UP
XLE	06/15 L	Too far away from MA(200).
XLE Weekly	UP
XLF	10/15 L
XLF Weekly	UP	Testing resistance which also is multiple Fib confluences area.
IYR
IYR Weekly	UP
XLB	*01/18 L
XLB Weekly	UP	BPMATE is way too overbought.

1. 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.
2. Conclusions can be confirmed endlessly, but trading wise, you have to take actions at certain risk level as soon as you feel the confirmation is enough. There’s no way for me to adapt to different risk levels therefore no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
3. * = New update; Blue Text = Link to a chart in my public chart list.
4. Trading signals in OTHER ETFs table are mechanical signals. See HERE for back test results. 08/31 L, for example, means Long on 08/31.
5. UP = Intermediate-term uptrend. Set when I see at least one higher high and higher low on weekly chart.
6. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on weekly chart.