Live Update

Tuesday, August 11, 2009

08/11/2009 Market Recap: Down 2 days in a row for the 3rd time


Critical test tomorrow as for the last 2 times SPX was up big after being down 2 days in a row.

Expect US$ to pullback.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Up Neutral*  
Short-term Down* Neutral  
My Emotion No idea   Neither believe this bull nor want to be a hero to short against it.

Common believes are that the long expected pullback has started. The target could be the June high around SPX 950ish.


Is it true? At least to me, bears are facing a critical test tomorrow:  7.1.0 Use n vs n Rule to Identify a Trend Change, for the past 2 times when SPX was down 2 days in a row, the 3rd day was up big. So, will the 3rd time be the charm? Well, at least an up day tomorrow is very likely, because down 2 days vs up 1 day, apparently bulls are stronger, so theoretically this is a buyable dip. Besides, as mentioned in the After Bell Quick Summary, statistics support a green close tomorrow. So, looks like the bear’s hope is “not up big” tomorrow then perhaps the 3rd is different and therefore the critical test could be considered as passed.


3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), black bar usually means a reversal, so very likely the US$ will pullback from here which also supports my expectation for the stock market to rebound tomorrow.



  1. 'My Emotion' is the best ever; you are persistent, and that matters for a lot. Sincerley, Jeff Pietsch of MarketRewind

  2. I think UUP will test that 20SMA before it moves higher. Should test by the end of this week IMO.

  3. HSI down 3% Shanghai down 4%
    suggesting the bubble might be breaking.

  4. SHANGHAI SE COMPOSITE INDEX( CN;SHI :Shanghai) -152.007 (-4.66%)
    If China Bubble Bursts, Will Global Economy Notice?
    The Big Fear: "Irrational Exuberance" In China

  5. this is the second time Shanghai index looses 5%

  6. China "MIGHT" be a clue..

  7. Japan's Wholesale Prices Plunged During Past 12 Months
    Published: Tuesday, 11 Aug 2009 | 8:41 PM ET Text Size By: Reuters
    Japanese wholesale prices fell a record 8.5 percent in July from a year earlier, highlighting growing deflationary pressure in the economy and limiting the Bank of Japan's scope for ending its unorthodox policy measures.
    Although the fall in prices is likely to moderate in autumn as the effect of last summer's spike in oil prices wears off, economists say weak domestic demand could prolong the country's second bout of deflation in less than a decade.
    "We're going to see increasing downward price pressure from weak demand," said Takeshi Minami, chief economist at Norinchukin Research Institute.
    "The Bank of Japan has said the country is not entering a deflationary spiral, so it won't ease monetary policy further.
    But as long as weakness in the economy and prices persists, it won't be able to raise rates either.

  8. Baltic Dry Index

  9. Cobra: Apart from knowing direction of the market and up/down days, can you also suggest stock picks for possible directional play, if possible.

  10. Nice call. It doesn't pay to fight the Cobra!



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