08/02/2011 Market Outlook (Exhaustion Bar?)

SHORT-TERM: REBOUND, IF ANY, IS SELL

Two conclusions:

1. Could see a rebound as early as tomorrow.
2. Rebound, if any, is sell.

Listed below are the reasons why we could see a rebound as early as tomorrow:

• NYMO oversold. This is not an ordinary oversold, it’s extremely oversold.

• 2 Major Distribution Day within 5 days means rebound but also means rebound, if any, is sell.

• Today’s SPX bar looks like an exhaustion bar, so a rebound of some kind should be close. It doesn’t guarantee green tomorrow or even worse, could be another bigger red bar with even bigger volume (which means more exhaustion), so I don’t mean it’s the reason for a rebound tomorrow, it just means that we’re almost there, it’s a sign when I read charts, that’s it.

Why, rebound, if any, is sell?

• Still it’s the law of inertia, a forward accelerating car cannot be reversed without slowing down first. NYMO new low means the downward is accelerating so need a sign of decelerating first which in terms of NYMO is NYMO positive divergence that is still missing in the chart below.

• As mentioned above 2 Major Distribution Day within 5 days, although could mean a short-term rebound but it’s not pleasant on a little bit longer than short-term.
• Remember all the reasons I blah blah in 08/01 Market Outlook? They’re mostly still valid, especially that SPX down 5 days or more stuff, since no rebound today, so it should be valid for sure.

 

INTERMEDIATE-TERM: IN DOWNTREND, SPX TARGET MARCH LOWS AT 1249

See 08/01 Market Outlook for more details.

SEASONALITY: BEARISH FIRST 9 TRADING DAYS OF AUGUST

See 07/29 Market Outlook for more details. Also please see 07/29 Market Outlook for day to day August seasonality chart.

ACTIVE BULLISH OUTLOOKS:

• 07/01 Market Outlook: Bullish July.  Also one more evidence in 07/05 Market Outlook. Failed!
• 07/07 Market Outlook: New NYHGH high means SPX higher high ahead. Failed!

ACTIVE BEARISH OUTLOOKS:

• 07/20 Market Outlook: Multiple evidences arguing for more pullbacks ahead. Also 2 more evidences in 07/25 Market Outlook.
• 07/22 Market Outlook: Bearish on AAPL, therefore QQQ as well.
• 08/01 Market Outlook: Rebound, if any, is sell. Also so 08/02 Market Outlook for more evidences.

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

TREND MOMENTUM COMMENT Long-term 2 of 2 BUY Intermediate 5 of 5 SELL 4 of 5 NEUTRAL Cobra Impulse in SELL mode; Non-Stop in *SELL mode. Short-term DOWN 4 of 6 NEUTRAL

TREND COMMENT QQQ & Weekly UP 4.1.1 Nasdaq 100 Index (Weekly): SOX lags, be careful. IWM & Weekly DOWN   SSEC & Weekly DOWN   EEM & Weekly UP   XIU & Weekly DOWN   DAX & Weekly DOWN   TLT & Weekly UP   UUP & Weekly DOWN GLD & Weekly UP   USO & Weekly UP   XLE & Weekly UP   XLF & Weekly DOWN IYR & Weekly DOWN 4.4.3 Real Estate iShares (IYR Weekly): XHB lags, be careful. XLB & Weekly DOWN

* = New update; Blue Text = Link to a chart in my public chart list. UP = Intermediate-term uptrend. Set when weekly buy signal is triggered. DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.