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Wednesday, October 14, 2009

10/14/2009 Market Recap: Breakout!


Fib confluences area could be the SPX intermediate-term target. Still worried about those so many unfilled gaps though.

Hollow red bar on VIX daily chart could mean a pullback tomorrow.

  TREND MOMENTUM EMOTION COMMENT - Sample for using the trend table.
Long-term Up   Disbelieve  
Intermediate *Up Neutral No argue  
Short-term Up Neutral Yes!  
SPY SETUP ENTRY DATE INSTRUCTION STOP LOSS Mechanic trading signals for reference only.
Back tested since 2002.
ST Model I 10/14 L *Buy intraday *10/06 Low
ST Model II   Stopped out short flat on 10/08. 
No position held now.
VIX ENV 10/06 L 10/13 Low  
Reversal Bar 10/05 L *Adjust stop loss 10/13 Low  
Up 3 days in a row while volume down 3 days in a row 10/12 S   Hold 3 days

61% winning rate since 2002.

I covered intraday flat on 10/13.


Breakout to new high and all the conditions for a decisive breakout I mentioned in yesterday’s report are all met. Except for too many unfilled gaps, I can hardly find any big flaw for today’s rally. So check 1.0.8 SPX Cycle Watch (Weekly) for the next possible target area.


Now the problem I’m most worried is that the unfilled gaps are way too many. This has never happened before. 1.1.0 Nasdaq Composite (Daily), 9 high to low gaps so far, this is too much.



Tomorrow is most likely a consolidation day. Besides the reasons mentioned in the After Bell Quick Summary, the hollow red bar in 2.0.0 Volatility Index (Daily) also could mean a pullback for the stock market.


3.1.2 PowerShares DB US Dollar Index Bullish Fund (UUP 30 min), lots of positive divergences, plus the US$ leading indicator, 3.3.0 streetTRACKS Gold Trust Shares (GLD Daily) dropped ahead of the US$ today, so the chance is good for the US$ to rebound tomorrow which also could mean a pullback for the stock market.



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