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Monday, August 24, 2009

08/24/2009 Market Recap: Head and Shoulders Top or Bullish Falling Wedge?


Key day for bears according to what happened in the past the 2nd day after a Major Accumulation Day.

Could be Head and Shoulders Top or Bullish Falling Wedge in the forming.

SPX daily stopped right at the Bearish Rising Wedge resistance line.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Down Neutral Intermediate sell signals still need further confirmation.
Short-term Up Neutral  
My Emotion Up    

7.0.A Major Accumulation Day Watch, as discussed in the weekend report, down 2 days in a row after a Major Accumulation Day usually means a tradable top (See dashed red lines), so tomorrow is very important for bears.


Simply from the chart pattern point of view, very likely the open tomorrow would determine the fate of bulls and bears. 1.0.3 S&P 500 SPDRs (SPY 30 min), a gap down open, then probably a Head and Shoulders Top is in the play. 1.0.4 S&P 500 SPDRs (SPY 15 min), a gap up open, then could be a Bullish Rising Wedge in the play.

SPY30min SPY15min

Right now, looks like bears have a little edge. Because, firstly, as mentioned in the After Bell Quick Summary, whenever CPCE <= 0.56, most likely a red close the next day, and secondly, SPY has been opened with an up gap for 3 days in a row, so logically the chances for it to open with yet another up gap the 4th time is relatively low.

0.0.3 SPX Intermediate-term Trading Signals, just want your attention to this chart, SPX was rejected right at the Bearish Rising Wedge resistance line, and the whole chart has lots of negative divergences, which I still have difficulties in seeing it as bullish (so again forgive my bearish bias, as I swear I’m only telling the truth… LOL)



  1. Hang Seng and the Nikkei have gapped down at their open...

  2. Shanghai down 3%;range=5d;compare=^n225+^hsi+^gspc;indicator=sma(20)+macd(12, 26, 9)+rsi;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

  3. It's troubling as someone who holds a small short position to see so many people get bearish on a day the market dropped...0.05%. Let's wait for some actual selling first before calling a top. Makes me want to cover tomorrow morning on any drop.

  4. Cobra, what's VIX ENV in your trend table?

  5. "It's troubling as someone who holds a small short position to see so many people get bearish on a day the market dropped...0.05%. Let's wait for some actual selling first before calling a top."
    Quote from Investopedia, "Outside Reversal What Does Outside Reversal Mean?
    A charting trend in which a stock price's high and low for the day exceed those of the preceding day. Investopedia explains Outside Reversal
    Depending on where the outside reversal occurs, it may signal either a bearish or bullish price movement. If the reversal occurs at the "stock's resistance level", it is viewed as bearish. In contrast, if it occurs at the stock's support level, it is viewed as bullish." since the S&P reversed at resistance i called yesterday a reversal day.

  6. So far look like is going to be a gap up day... and probably going to take out yesterday's high if we get a good housing number...

  7. Hi Cobra,

    Wed 08-26 is my next 3 wk cycle date,..I am biased for it to be a turn down from a HIGH.

    Next 3 wk cycle date after that is Fri 08-28,..which at this time looks to me to be a possible LOW.

    So I am looking for an UP day on Tuesday 08-25.
    Thanks for sharing your work. Regards, Jim P.

  8. Anony at 1:36am, VIX ENV is Moving average envelops. I use ENV(10,10) which means I'm interested in watching 10% above/below MA10 of the VIX daily chart.



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