SHORT-TERM: MORE UP BUT IT’S A SELL OPPORTUNITY
Two cents:
- Could see more up until perhaps the day after tomorrow FOMC announcement, targeting 06/14 highs.
- Will temporarily regard the current rally as a sell opportunity.
The chart below explains why I think more upside ahead: Ascending Triangle or Cup with Handle.
For three reasons, I think this is a sellable bounce.
- I’ve given the first reason in today’s Trading Signal: Price Volume Negative Divergence.
- The chart below shows the reason number tow. If you still remember how SPX used to rebound from a bottom then apparently the current rebound is much weaker. That said, there’re always some exceptions so maybe this time it simply starts slow, may catch up tomorrow, so let’s wait and see.
- The third reason is OEX Put Call Ratio surged again which looks suspicious as today’s CPCE reads merely 0.57. This means people were buying lots of calls while OEX option traders bought lots of OEX put and historically, OEX option traders are more often on the right side of the market.
INTERMEDIATE-TERM: STATISTICALLY BEARISH FOR THE NEXT WEEK
See 06/03 Market Outlook for more details.
SEASONALITY: BEARISH NEXT WEEK
According to Stock Trader’s Almanac, week after June Triple Witching, Dow down 11 in a row and 18 of last 20, average loss since 1990, 1.2%.
Also see 06/01 Market Outlook for June day to day seasonality.
ACTIVE BULLISH SIGNALS:
- 8.1.5 Normalized CPCE: Too high, so bottomed?
- 06/17 Market Outlook: Net % of all Sentimentrader’s Indicators at Extreme is very bullish.
ACTIVE BEARISH SIGNALS:
- N/A
ACTIVE BULLISH OUTLOOKS:
- 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
06/10 Market Outlook: 75% to 81% chances a green next week.
ACTIVE BEARISH OUTLOOKS:
- 06/03 Market Outlook: IWM weekly Bearish Engulfing and SPY down 5 consecutive weeks were bearish for the next 3 weeks.
HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST:
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