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Thursday, February 17, 2011

02/17/2011 Market Recap: Seasonality - Bear’s Best Bet Tomorrow

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 3 of 5 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term 6 of 6 are NEUTRAL
GANN DAY MOON:SOLAR CYCLE CONCLUSION
02/10-/13,02/20 02/18 : 02/19 02/13,02/19 Next pivot date: 02/20
BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
4.1.0 S&P 500 Large Cap Index (Weekly): Cup with Handle, target 1428.
BEARISH 01/07 Market Recap: Strong Off-Season means poor Earning Season.
4.0.4 Dow Theory: Averages Must Confirm: BPSPX is way too overbought.
4.0.1 SPX Long-term Trading Signals: Weekly EMA(13) is way too high above weekly EMA(34).
4.1.0 S&P 500 Large Cap Index (Weekly): Price is now too high above MA(200).
02/14 Market Recap: Smart/Dumb Money Confidence spread is too large.
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 *02/17 L 1.9*ATR(10) *Long if SPY pullback to 02/17 mid price around $133.89 but above 02/11 lows. Cannot give intraday signal for now so have to buy the next day pullback.
Short-term N/A N/A Trend is UP. I hold no position overnight.
My Thoughts I’m almost convinced that this could be a primary 3 of 3 up to much much higher.

SHORT-TERM: BEAR'S BEST BET TOMORROW IS THE SEASONALITY

Another bullish reversal day today. This usually is a very bullish sign so chances are good that we’ll see more upside ahead. Supporting this view is the VIX bearish reversal bar which, if history repeats, should mean that VIX will have further pullbacks and therefore is bullish for SPX.

VIXDaily

Not sure about tomorrow, by default, it should be up of course, but seasonality wise, according to Stock Trader’s Almanac, day before Presidents Day weekend, SPX down 16 of last 19 and February Expiration Day, Dow down 7 of last 11, should be very bear friendly. The chart below from another angle shows the bearish seasonality for tomorrow as it could be the most bearish day in February.

Seasonality

In addition to the seasonality, here’s a small statistics (Thanks for a reader reminding me): SPY closes above MA(5) for 13 days in a row, short at today’s close and cover at the very first down day since 1991, you’d have 71% chances. Further more, the back test summary below, if you read carefully, you’ll find, interestingly, all losing trades were very very bullish cases that on average they’re up 6.8 more trading day! So think twice before shorting this crazy bull market.

13DaysAboveMA5

INTERMEDIATE-TERM: WHETHER THIS IS PRIMARY 3 OF 3 TO GALAXY FAR FAR AWAY WE MAY KNOW THIS WEEK

See 02/04 Market Recap for more details.

SEASONALITY: BEARISH MONDAY AND FRIDAY

See 02/11 Market Recap for more details.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 01/28 S
NDX Weekly UP BPNDX is way too overbought. Too far above MA(200).
IWM
IWM Weekly UP
CHINA
CHINA Weekly UP No higher low yet but the rebound is so strong so could be in uptrend now.
EEM
EEM Weekly DOWN
XIU.TO 02/04 L TOADV MA(10) is a little too high, all led to a pullback of some kind recently.
XIU.TO Weekly UP
TLT
TLT Weekly DOWN
FXE Watch for possible 1-2-3 trend change to down from up.
FXE Weekly UP
GLD
GLD Weekly *UP
GDX 02/03 L
GDX Weekly *UP
USO
WTIC Weekly UP
XLE 02/09 S
XLE Weekly UP Too far above MA(200).
XLF 10/15 L
XLF Weekly UP Testing resistance which also is multiple Fib confluences area.
IYR
IYR Weekly UP
XLB 02/09 S
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 daily chart.
  6. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on daily chart.
Posted by Cobra at 8:24 PM
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