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Sunday, February 22, 2009

02/20/2009 Market Recap: Finally Oversold

Friday's Russell 3000 Dominant Price-Volume Relationships has finally confirmed that the market is oversold, so we shell have a bounce sometime next week. And since I haven't seen any signs of bottom yet, I believe it's a tradable bounce only, not a bottom.


Bad news first: 1.2.0 INDU Leads Market, 10 year new low! Although some newsletters consider INDU new low without SPX's confirmation to be a positive divergence, but according to chart 1.2.0, if the past rule still applies, I believe that SPX will follow INDU, eventually will have a new low. Besides, again, 0.0.1 Market Top/Bottom Watch has not a single bottom signal yet.



1.3.7 Russell 3000 Dominant Price-Volume Relationships, 1479 stocks price down volume up, finally oversold. Look at the chart, starting from Feb 9, these are series of typical downside price-volume relationships, where at the very beginning, the "price down volume up" was bearish, and during the down trend, the "price down volume down" (not annotated on the chart: either "price up volume up" or "price down volume down") was a sign of continuation, and finally "price down volume up" again which is bullish because it means a possible capitulation.


2.3.4 Nasdaq Total Volume/NYSE Total Volume, looks like a short-term bottom to me.


0.0.2 SPY Short-term Trading Signals, perfect bounce setup, well, as long as you don't consider the "perfect" as a contrarian sign.


1.0.3 S&P 500 SPDRs (SPY 30 min), 1.0.4 S&P 500 SPDRs (SPY 15 min), lots of positive divergence arguing for a rebound as well.


3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), Bearish Engulf, Bearish Rising Wedge, dollar should drop further which is good for commodities.


5.0.2 S&P Sector Bullish Percent Index, looks like there's not much room for Financials to drop.


5.2.0 Energy Select Sector SPDR (XLE Daily), right on the support, XLE should rebound.


And lots of oversold signals from various angles bellow. So again, looks like a "rare" "perfect" sign of a tradable bounce. I'm not a fan of "contrarian", but in case the market is sold off again next week, if I have long, I might turn off the computer and pretend that nothing has happened. LOL

Liquidity Flow and Institutional "shift in direction" from


SPX Climactic Volume Indicator and SPX Price Momentum Oscillator from


NYSE 4 Weeks New High/Low Ratio from Telechart.



  1. Sunday Night Coffee - Market Analysis for Upcoming Trading Week -

  2. Thanks. Nice blog. Are you willing to exchange links? I've added your link anyway.

  3. Well my friends,,

    Whats it going to be,, open down then recover nicely?? or red all day??

    Be brave, predict going into Geithners talk.


  4. I just add cobramarketview into my blog list

    new hot charts for monday

  5. Well, Cobra, you said it was "perfect" bounce formation or "perfect conspiracy." Score one for a perfect conspiracy? :(

  6. Well, it's a sad nature of TA, sometimes "conspiracy" works. :-) And that's why follow the trend is of the most importance.



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