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Tuesday, July 28, 2009

07/28/2009 Market Recap: Back Test or Ascending Triangle?


Could be a back test of a broken Bearish Rising Wedge or an Ascending Tirangle is forming.

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

Not much to say today. Not sure if the market still has one push up or will continue to pullback. Let’s see how market unfolds tomorrow.

1.0.3 S&P 500 SPDRs (SPY 30 min), this is a bearish view. A bigger Bearish Rising Wedge was broken and then back tested. A smaller Bearish Rising Wedge was broken and then could be back tested again. If so, tomorrow the market may continue to pullback.


1.0.4 S&P 500 SPDRs (SPY 15 min), this is a bullish view, an Ascending Triangle could be in the forming.


1.0.2 S&P 500 SPDRs (SPY 60 min), tomorrow will be the end of 7 trading day cycle which is a potential turning day. So if the market rise, then tomorrow could be a short-term top, while if the market drops, then tomorrow could be a short-term bottom. About the reliability of this 7 trading day cycle, please refer to 7.6.1 SPX Cycle Watch (60 min). At least it looks pretty reliable to me.



  1. Yah, not much to go on today, but too many IT buy setups to go short for more than a couple of days imo.

    There is one reliable ST pattern on the S&P painted yesterday that, given today's down day on the S&P, argues strongly for an up day either tomorrow or thursday. My gut is however, that we need to get a solid down day to relieve more of our OB conditions. I'd welcome that as a buying opp. Otherwise we might be in for some sideways boring action to relieve those conditions.

  2. Hello Cobra,

    Another blog I follow is Jack Deveaux's ASMT:

    He notes: "Price action the last few days resembles a "running triangle" and this implies a move to higher highs is imminent before another correction attempt."

    I find his work useful and interesting.

    In general, I would agree,...and am Long for today (Wedn 07-29). I think the STEM.MR models, being oversold here, have it right.

    My next 3 wk cycle (likely pivot) date is tomorrow (Thurs 07-30) so whatever direction we take into Thurs, I would expect to be reversed.
    If we are UP on Wed, then I would expect a lower close on Thurs, and vica versa.

    Have a good day. Regards, Jim P.

  3. Take a look at the futures with 60-min bars -- I see a clearer set of patterns. ES is in a flag and NQ and TF are in either ascending triangles or rectangles. All suggest consolidation before further advance rather than reversal, which is astonishing given the extent of this move. (However, I keep reminding myself that the big bull markets start with big moves accompanied by disbelief.)

  4. Jim, looks like I'm right about STEM.MR model. So the Cum TICK and Price Oscillator are more important.

    Our shortest-term STEM.MR Models actually cycled near oversold territory yesterday, an exceptionally unusual situation given that the market really hasn't pulled back at all. The reason for this is because the models are designed to ease into oversold territory more easily during strong uptrends, and it takes a lot to get them back to overbought. I'd have more faith in oversold signals there if the components of the model, particularly the Cumulative TICK and Price Oscillator, also moved into oversold, but neither is even remotely close at this point.

  5. Cobra, On the NYSE Cumulative TICK Intraday plot, that is an interesting "triangle" type pattern the plot is tracing out.

    I know you had commented last week that Cum TICK plot (lower plot with higher SP500) was a sign of divergence,..but as I look at it, I am wondering if this "triangle" pattern could not be another sign of "continuation",...that if the Cum TICK plot were to break to the upside, it would have bullish implications? Thanks for the sharing of ideas. Regards, Jim P.

  6. Jim, you might be right, it is a Triangle pattern. Just the Triangle pattern has only 54% chances of breaking out on the upside. So it's still a random number.

  7. Thanks Cobra,...

    Also a positive seasonality bias (End of Month,..etc) for next 4 trading days.

    Regards, Jim P.



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