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Monday, July 6, 2009

07/06/2009 Market Recap: Reversal Bars Everywhere


Could be more rebound tomorrow.

Bulls better break above 932 tomorrow to prove themselves.

  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  

I see reversal bars everywhere so the market may continue to rebound tomorrow. As mentioned in the After Bell Quick Summary, when both VIX and SPX were up on the same day, 7 out of 8 times recently the next day closed in red, so my best guess is that tomorrow we could see an intraday rebound in the morning then eventually closes in red. Anyway, no matter what happens tomorrow, according to 7.1.0 Use n vs n Rule to Identify a Trend Change, if SPX couldn’t high above 932 then most likely it’s a sell-able bounce.


Just have a quick look at so called “Reversal Bars Everywhere”:

0.0.2 SPY Short-term Trading Signals.


2.0.0 Volatility Index (Daily), VIX might drop which is good for the SPX to rebound.


3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), US$ may drop which is good for the SPX to rebound.


3.4.2 United States Oil Fund, LP (USO 30 min), very oversold plus positive divergence, oil could rebound which is good for the SPX to rebound.


Also it seems that the following several days are bullish from seasonality point of view.



  1. It's hard to believe SPX would be close to 932 tomorrow, which means >+33 in one day for SPX in recent low volume market. But, two or three days could make SPX that high.

    If this is a sellable rebounce, do you think it is the right time to start building short positions from 920 towards the end of this week?

  2. Need to see how trong the rebound will be tomorrow. If it's strong enough, may not have to be above 932. But the day after tomorrow, SPX better be high than 932.

  3. interesting to follow the ISEE these few days. Look at it today! Wow! Retail suddenly give up on buying calls for total equity (which means they probably got slaughtered pass few days on their call position on individual stocks) and now they are totally crazy about indicies/ETF calls (we have over 200 reading at one point!). They probably figure that since indicies/etf are like rubber-band and can not go to zero and since we fall so much already we are due for a big bounce back... well, guess again, maybe they are right, but how often retail dumb money are right...?




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