Live Update

Wednesday, June 24, 2009

06/24/2009 Market Recap: FOMC and the day after

Summary:

Expect at least a short-term pullback.

  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  

Not much else to say as all the major stuff is in the after bell Quick Summary. To summarize:

1. The 2 days bounce was weak, especially if bulls cannot break above SPX 927 tomorrow then good chances this is a sell-able bounce. Here’s some statistics about a weak rebound: Poor Rebound Breadth Not A Good Sign.

NvsN

2. It would be the SPY’s 8th gap if we have another gap up tomorrow therefore I don’t think that gap could hold.

SPY60min

3. About FOMC and the day after (Not the same chart posted in the after bell summary), ever since the Oct 2007 bear market, the FOMC and the day after were reversely correlated. This means probably we’re going to see a red close tomorrow.

FOMCLong

From the intraday model below, we could see, especially Nasdaq, that the market is very close to overbought, so if the market rise again tomorrow, no panic is necessary for bears.

IntradayModel

7.7.9 Russell 3000 Dominant Price-Volume Relationships, 1095 stocks price up volume down, this is the most bearish price-volume relationships. Also the pullback starting form June 10 so far had all bearish price-volume relationships therefore arguing more pullbacks ahead.

RUA

Yes, the tech was strong today, but let me remind you 2 charts:

2.3.4 Nasdaq Total Volume/NYSE Total Volume, I think we should still remember what would happen whenever the ratio between NYTV and NYTV is too high. Well, the ratio rose to an extreme level again today.

NATVvsNYTV

5.0.2 S&P Sector Bullish Percent Index, Tech still is very overbought.

BPNYA

At the end, let me quote what Don Worden from Telechart has summarized:

My personal gut feel (subject to minute-by-minute change) is that the May lows will be violated and that the market will slip into an Intermediate Downtrend. I think that will be a healthy thing and that the March low will not be violated, probably not even tested.

My guess is that Don Worden is expecting a Head and Shoulders Bottom and the market is now making a right shoulder, which is exactly the same as John Murphy is expecting...

SPXWeekly

13 comments:

  1. Cobra,

    Good write up tonight. I think the H&S bottom is very possible and is something to keep in mind if we get to the 800 level.

    ReplyDelete
  2. Thank you Cobra. I truly appreciate your work. =D

    ReplyDelete
  3. Have you considered the bottom in march to be the left shoulder instead of the head?

    Because of the high volume, it would make more sense for march to be the left shoulder.

    So we should be seeing the head soon (with lower volume). What do you think the chances of that are?

    ReplyDelete
  4. Nice work Cobra. I just did some research on the 5 minute. Hope you don't mind if I leave a link.
    http://www.bostonwealth.net/2009/06/25/sp-500-update/

    ReplyDelete
  5. Excellent write up Cobra and I do really appreciate your view on the market from different directions!

    ReplyDelete
  6. Thanks Cobra, Interesting chart re. Likley direction post FOMC,..thanks.

    For anyone interested in end of day Rydex fund trading program, keep an eye on 4CSNS site, ..has been doing great, up 49% YTD trading Rydex 2X SP500 either Long or Short at End of Day.

    http://www.4csns.com/

    I participate in this program and am very pleased.

    Regards, Jim

    ReplyDelete
  7. pricepersia, I actually don't belive this H&S bottom story.

    Guys, thank you very much for the comments and additional info, really appreciate!

    ReplyDelete
  8. i think you mean "below" instead of "bellow"

    ReplyDelete
  9. I agree with princepersia that 3/9 is the left shoulder. Head is coming up.

    ReplyDelete
  10. Good work. What is your take on TLT/TBT at this stage? FOMC statement seemed negative for bonds. But knee jerk reaction is seldom the sustainable one longer term.

    ReplyDelete
  11. In Debt, I think TLT will be up.

    ReplyDelete
  12. hello... hapi blogging... have a nice day! just visiting here....

    ReplyDelete

Disclaimer

The information contained on this website and from any communication related to the author’s blog and chartbook is for information purposes only. The chart analysis and the market recap do not hold out as providing any financial, legal, investment, or other advice. In addition, no suggestion or advice is offered regarding the nature, profitability, suitability, sustainability of any particular trading practice or investment strategy. The materials on this website do not constitute offer or advice and you should not rely on the information here to make or refrain from making any decision or take or refrain from taking any action. It is up to the visitors to make their own decisions, or to consult with a registered professional financial advisor.

This websites provides third-party websites for your convenience but the author does not endorse, approve, or certify the information on other websites, nor does the author take responsibility for a part or all materials on the third-party websites which are not maintained by the author.