Live Update

Sunday, June 21, 2009

06/19/2009 Market Recap: Head and Shoulders Bottom or Bear Flag?


Bull or bear, we might know on Monday.

Tech Sector Bullish Percent Index is way overbought.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Down Neutral  
Short-term Down Neutral  

No conclusion, let’s see how Monday unfolds, suspect tech sector might not very pleasant though. About short-term, the Friday’s After Bell Quick Summary has mentioned 2 things: 1. Statistically, Monday is a little bit “Bear Friendly”; 2. According to N vs N rule, bulls must push SPX above 946 on Monday to prove themselves.

From SPX 30 min chart, both bulls and bears have chances. Breakout on the upside, a Head and Shoulders Bottom is formed, then most likely the June high 956 will be tested; Breakout on the downside, a Bear Flag is confirmed, according to measured move, SPX will have about 53 points drop. Well, up or down? I have no idea. Trading wise, better wait after the breakout before joining bulls or bears.


1.1.5 PowerShares QQQ Trust (QQQQ 30 min), could be a Bearish Rising Wedge in the forming. Well, yes, I know, there’s no egative divergence on the chart therefore this so called Bearish Rising Wedge might not that bearish. Just the Tech Sector Bullish Percent Index is at a record high now, so accordingly I think QQQQ has very good chances to pullback soon.


No much else to say, take a look at 0.0.0 Signal Watch and Daily Highlights, short-term neutral, intermediate-term all sell signals now.

A few other charts for your references only:

3.1.1 PowerShares DB US Dollar Index Bullish Fund (UUP 30 min), Bullish Falling Wedge plus positive divergence, US$ could rebound which is not good for the stock market.


5.2.0 Energy Select Sector SPDR (XLE Daily), oversold plus multiple supports, XLE may rebound. 5.2.1 Energy Select Sector SPDR (XLE 30 min), lots of positive divergences, also say XLE may rebound too.

XLEDaily XLE30min


  1. Good stuff.

    One thing I see few people acknowledging is the highly respected downtrend channel line. The bulls had a chance to break it in early June and their efforts were a joke. Absolutely no buying interest.

    In the 2000-2003 bear market, this channel was respected all the way to the bottom, and only broke out from it after a base was put in. I think this will be the case now too, and that base is likely not be at 600-700 but more likely as I show in this chart:

    The channel is dropping 1pt/day, so this is damn serious. Few people seem to be panicking.

    The DOW is also now trapped by its channel and the monsterous 200-month MA, trumping the P2 player's call for a push to 10,0000:

    It all seems pretty obvious.

    Your thoughts?

  2. Joe Battaglia and Louise Yamada share similar points of view, except Louise thinks the negative divergence of the MACD as being note worthy...

  3. i'm looking forward to the completion of some bear market rallies


    It seems that every website, blog, video, webcast, audio, or book I read or watch is now Bearish. If that's the case, then won't the market fool everyone and continue this Rally upward? I've asked myself that question many times, as I know that the market likes to trick both Bulls and Bears. Most of us online today, that study the market and the economy, know that when the average person (retail investor) is extremely Bullish, the market will turn Bearish and take all their money.

    Then of course the opposite is true too, as they will steal the Bears' money by rallying when everyone is extremely Bearish. With that being the case, everywhere I look now, I see Bears coming out of hibernation... should I now become Bullish? I think NOT!

    What many of us overlook is the fact that "We are not the Retail Investor". Just because we don't work for Goldman Sucks or some big Wall Street firm doesn't mean that we don't know what they are planning.

    We seem to focus only on those that we follow on the internet and in books that we read. But, I find myself only reading from people that I consider to be "right". And, since most of them are Bearish now, I question myself as if I'm on the "retail investor" side... which is usually wrong.

    Much like those people who have seen UFO's or know people who have seen them feel. You think that everyone knows someone that has seen them, so you think that everyone assumes that they are real. That's not the case. Most people still don't believe in UFO's. Those are the "retail investors"... blinded by the deep BS they are fed by the mass media.

    For those of us that study the market and economy, fear not because UFO's and Bears do exist!

    Just because everywhere we read now is Bearish, doesn't mean that the average Joe Blow is! He doesn't read these blogs, watch video's, or listen to podcast's on the economy. He gets his news from Cramer or some other "Bull-tard" on TV.

    Don't believe me? Next time you are in Walmart ask at least 10 strangers what they think of the economy and the how the stock market is doing. Most will say the that Obama is doing a good job, and that the worst is behind us.

    That dear folks... is the "retail investor", that is why I'm still Bearish! Regardless of what some are saying that we have "too many Bears" right now! I say that most of the world doesn't read about the economy on the various blogs and websites I, and many of you visit. They hear it on CNBC news, or some other "always bullish" news agency.

    Nobody wants to hear the "negative stuff", only the positive. I want to hear both! Therefore I took the Red Pill, and many of you reading this did too... while the rest of the world took the Blue Pill.

    While they watch Jerry Springer, America Idol, and CNBC News... we learn from people like Bob Hoye, Gerald Celente, Peter Schiff, Glen Beck, Robert Prechter and combine that with Astrology from Raymond Merriman, Adrian Fourie, Larry Pesavento, Donald Bradley, Mahendra Prophecy, and many others.

    We read blogs like Cobra's, TheChartPatternTrader, Evil Speculator, Slope of Hope, StockTockSocial, InTheMoneyStocks, Tony Caldaro's Elliott Wave Lives on, LiveWithOscar, AfraidToTrade, and many many others.

    Yes folks! We are the "Minority", and I believe that we are "Right" most of the time, while the "Blue Pill taker's" are wrong most of the time. Therefore... you should NOT fear that so many people you follow are now bearish, they are Right this time!

    Dan Black

  5. On another note... CUDO's TO THE REBEL's!

    There are many trader's that don't publish blog's because they are too busy living life from all the success they've had. Some have more recently decided to share that knowledge with us. One relatively new blog is over at Recently you will find him posting comments on Evil Speculator and Slope of Hope.

    He has an excellent blog, and I look forward to reading every new post. He stated in one of those post ( that he believe that a "One Day Crash" was coming in mid August. That fit's in perfectly with my previous post ( that the market will crash on August 14th, and continue crashing hard through September and into October.

    I believe we are still on track for that to happen, as the Banks are just about done stealing money from the public. They are now "Cashing Out" and paying themselves huge Bonuses ( At the same time record number's of people are going hungry... not some third world country, but here in America! (

    If stoning were allowed in America, I'd be happy to throw the first stone at these Banksters. Americians should be outraged at these crooks, and demand a public hanging! But, they are too busy watching American Idol to even care. As such, the deception continues...

    I'll end this long post by saying...

    Many thanks go to all those mentioned for their tireless postings and updates... all for Free, just because they care! I think Zig Ziglar said it best... "If you help enough people get what they want, you'll get want you want". As long as the internet is Free everyone can continue to help others by sharing their knowledge. We might not be able to help those that took the Blue Pill, but for those that took the Red one... Look out below, this train is about to crash off a cliff, and this fall/winter is the time and date!

    Dan Black

  6. A bearish view on the U.S. economy, with Charles Biderman, Trimtabs Investment Research and CNBC's Maria Bartiromo. Interesting discussion regarding the retail investor.
    Airtime: Thurs. Jun. 18 2009 | 3:28 PM ET

  7. Guys, thanks soooo much for all those wonderful comments. I really really really appreciate. Please please keep going on.

    Sorry about later reply. I had a very busy day today, my wife and kid will be back tonight from China, so I have to prepare everything for them and most of all pick them up at airport around 2am in the morning.


  8. PS. It took me 2 hours to set a car seat in my car. And it turned out to be wrong as my neighbor just corrected me moment ago. And he said it took him one day to figure that out. Well, at least this is a good news as I'm not the only one who don't know how to set a car seat...

  9. Anonymous,

    Charles Biderman is one the "Rebels" that is lucky enough to actually get on the mainstream media in an interview. Good for him, although Maria Bartiromo seems to be "trying to talk Charles into being Bullish". I bet she laughs at him, after the interview is over.

    I also mentioned Peter Schiff who was also interviewed many times by the mainstream media. Search him out on YouTube. There are tons of video's where he was laughed at in 2007-2008 for predicting this financial crisis... but he was right!

    The mainstream media does occasionally have someone one that "knows what they are talking about". I'm not saying they are all "bought and paid for", just most of them.

    Dan Black

  10. lol, Dan....I love it when Jim Rogers come on cnbc and the like. He has some good ones on Youtube too.

    Keep the great analysis coming Cobra, I really enjoy reading your blog.


  11. I was writing about what Biederman was talking about back in May on stockstop. Of course, I was using all of Biederman's ideas. His liquidity theory was right on the mark in the spring of 2000 as the Nasdaq was going ballistic. That's why I can't fall in line with all of the experts who say that we have started a new bull market. Anyway, seasonally we are about to hit many strong bearish headwinds. July 7th top on the Panic of 1907 model, July 7th lunar eclipse, another one a month later, a Puetz crash cycle, and several astrological calls for a severe drop. We also had Sign of the Bear characteristics although technically they were violated by the extreme negative breadth day on Monday. August Sept 2000 had a sign of the bear signal and the market actually started to drop before the sell signal went into effect but the 2 week period before the Sept selloff was similar to the previous 2 week period prior to this week. Someday I might put together a coherent post tying all of this together.
    Mr. Panic of 1907/2009

  12. Sounds like you and I are on the same page Mr. Panic... Great to have some "Red Pill" taker's onboard!

    Dan Black

  13. Dan,
    I didn't read all of your posts last night but I see you mentioned some of the gurus that I mentioned were calling for a crash. McClellan oscillator actually predicted a hard drop today and for this downturn to continue for some more. The July 7th top I mentioned on the Panic of 1907 model was actually a secondary top before the market went into complete freefall. I am 90%convinced we have seen the rally highs but we still might get a sizeable wave 2 rally into July once this drop is over.
    Mr. Panic

  14. Yes,

    I agree Mr. Panic. I see us going down to one of the Fib lines, and then bouncing back up... only to hit the weekly falling upper trend line at about the 900 range by then.

    That should put us at Mid-August... just in time for a major "One Day Crash" to kick off the firework! Yeah Haw! Go Bears!

    Dan Black

  15. Just to let you know CNBC created an online special report that highlights key moments of the most severe economic crisis since the Great Depression in "Boom, Bust & BLAME: The Inside Story of America's Economic Crisis." There is an interesting section on Alan Greenspan where he defends his actions, answers his critics, and explains his philosphy.
    If you're interested you can find the link here: http://bit.lyu/tFlyJ




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