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Wednesday, March 16, 2011

03/16/2011 Market Recap: Rebound maybe but lower low ahead

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 5 of 5 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode.
Short-term 3 of 6 are *OVERSOLD
GANN DAY MOON:SOLAR CYCLE CONCLUSION
03/12,03/16-03/21 03/19 : 03/21 Next pivot date: 03/21
BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
02/23 Market Recap: Pullback could last 4 weeks, then 02/18 highs will be revisited.
03/01 Market Recap: Bearish Engulfing is very bullish in 2 to 4 weeks.
03/10 Market Recap: Price overlaps so the pullback may not go far.
*0.2.3 NYSE McClellan Oscillator: Oversold.
*0.1.0 SPY Short-term Trading Signals: A few short-term long setup triggered on 03/16.
BEARISH 4.0.1 SPX Long-term Trading Signals: Weekly EMA(13) is way too high above weekly EMA(34).
03/04 Market Recap: OEX open interest ratio too high, could be choppy ahead.
03/16 Market Recap: Could see lower low ahead.
My Thoughts The pullback since 02/22 may last but the 02/18 high will be revisited in 69 calendar days on average.
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM: SSO/SDS, UPRO/SPXU
Non-Stop 02/24 S N/A Short is for aggressive traders only.
ST Model   Sell mode means downtrend. The model needs 2nd signal to open a short position.
Short-term DOWN 03/14 High As long as 03/14 high remains intact, the game is to sell bounce.

SHORT-TERM: COULD SEE REBOUND AS EARLY AS TOMORROW BUT THERE’LL BE A LOWER LOW AHEAD

Three things:

  1. C0uld see a rebound as early as tomorrow.
  2. Sell off might not be over yet, so today’s low is not the low.
  3. Trading wise, sell bounce is still the name of the game. See short-term model in the table above for more details.

Why I expect a rebound?

As mentioned in today’s After Bell Quick Summary, bulls have 76% chances tomorrow.

VIX

6.3.2a Major Distribution Day Watch, a Major Distribution Day (NYSE Down Volume : NYSE Up Volume >= 9) means 37/56 (66%) chances for bulls tomorrow.

MDD

0.2.3 NYSE McClellan Oscillator, NYMO oversold is a very reliable signal, one of my favourite.

NYMO

Why today’s low is not the low?

Very oversold NYMO means a VISIBLE positive divergence is a must before a meaningful bottom. What does VISIBLE mean? The index must rebound for a few days first then fall back below the previous low while NYMO hold above its previous low to form a positive divergence. Let’s say tomorrow, the index keeps selling off and we have a lower low then rebound huge, NYMO in this case may have a higher low, well, too bad, that is not a visible positive divergence. Must be a rebound (say, starting from tomorrow) for a few days then falls back below today or tomorrow’s low, whichever is lower, then we shall have the visible positive divergence.

NYMOPositiveDivergenceNeeded

Two Major Distribution Day within 2 days, so could see a short-term rebound (see dashed blue lines), could not (see dashed red lines), whichever the cases, the point is the sell off mostly continues thereafter.

2MDDWith5Days

INTERMEDIATE-TERM: COULD NOT BE VERY BRIGHT BUT STATISTICALLY BULLISH IN 3 TO 6 MONTHS

See 03/11 Market Recap for more details.

SEASONALITY: BULLISH MONDAY

According to Stock Trader’s Almanac:

  1. Monday before March Triple Witching, Dow up 17 of last 23.
  2. March Triple Witching Day mixed last 10 years, Dow down 3 of last 4.

For March seasonality chart please refer to 03/01 Market Recap.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

TREND COMMENT
QQQQ&Weekly UP
IWM & Weekly UP
SSEC & Weekly UP
EEM & Weekly DOWN
XIU & Weekly UP 1.5.1 TSE McClellan Oscillator: Oversold.
TLT & Weekly UP
FXE & Weekly UP (weekly) Testing Fib confluences area.
GLD & Weekly UP
GDX & Weekly UP
USO & Weekly UP
XLE & Weekly UP
XLF & Weekly UP
IYR & Weekly UP
XLB & Weekly DOWN
DBA & Weekly DOWN

  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. * = New update; Blue Text = Link to a chart in my public chart list.
  3. UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  4. DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.
Posted by Cobra at 9:20 PM
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