08/30/2011 Market Outlook (Overbought)

SHORT-TERM: COULD SEE PULLBACK TOMORROW

The market is overbought so could see pullback tomorrow. From the VIX chart below there’re some chances the top was in, just a single evidence is far from enough to draw any solid conclusion so I need see the next few days.

Three charts below are arguing for a red tomorrow, among them T2122 and NYMO are my ultimate weapons for watching overbought/oversold, should be pretty reliable.

INTERMEDIATE-TERM: SPX DOWNSIDE TARGET  IS 1,000, THE CORRECTION COULD LAST 1 TO 2 MONTHS

See 08/19 Market Outlook for more details.

SEASONALITY: BEARISH TUESDAY, BULLISH THURSDAY

According to Stock Trader’s Almanac:

• August’s next-to-last trading day, S&P up only twice in last 14 years.
• First trading day in September, S&P up 11 of last 15, back-to-back huge gains 1997 and 1998, up 3.1% and 3.9%.

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

ACTIVE BULLISH OUTLOOKS:

• N/A

ACTIVE BEARISH OUTLOOKS:

• N/A

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

TREND MOMENTUM COMMENT Long-term 3 of 3 SELL Intermediate 3 of 5 SELL 4 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode. Short-term UP 3 of 6 *OVERBOUGHT

TREND COMMENT QQQ & Weekly DOWN   IWM & Weekly DOWN   SSEC & Weekly DOWN 4.1.4 Shanghai Stock Exchange Composite Index (Weekly): Long term support broken. EEM & Weekly DOWN   XIU & Weekly DOWN   DAX & Weekly DOWN   TLT & Weekly UP   UUP & Weekly DOWN GLD & Weekly UP   USO & Weekly DOWN   XLE & Weekly DOWN 4.4.1 Energy Select Sector SPDR (XLE Weekly): BPENER oversold. XLF & Weekly DOWN 4.4.2 Financials Select Sector SPDR (XLF Weekly): Long term support broken. IYR & Weekly DOWN   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.