Summary:
A short-term top could be very close.
| TREND | MOMENTUM | EMOTION | COMMENT - Sample for using the trend table. | |
| Long-term | Up | Disbelieve | ||
| Intermediate | Down | Neutral | ||
| Short-term | Up | Neutral | ||
| SPY SETUP | ENTRY DATE | INSTRUCTION | STOP LOSS | Mechanic trading signals for reference only. Back tested since 2002. |
| ST Model |
| Stopped out of long position with gain. | ||
| Reversal Bar | 11/30 L |
| Breakeven |
|
| NYMO Sell | 12/04 S | 0.8xATR(10) | Use 2% for SPY. | |
| VIX ENV | ||||
INTERMEDIATE-TERM: MIXED SIGNALS
In wait and see mode. For details please see 12/04/2009 Market Recap.
3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), filled black bar which could mean a pullback tomorrow. I want your attention to the FXE below, which broke below an important support today. Need a confirmation tomorrow though. The rise of the dollar does not necessarily mean a pullback of the stock market but it’ll definitely affect commodities as well as their related stocks therefore should be a headwind to the stock market.
SHORT-TERM: VERY CLOSE TO A TOP
Maintain forecast of “very close to a top”. All the main reasons were mentioned in 12/04/2009 Market Recap: Bearish Reversal Day plus Extreme CPCI and CPC readings plus QQQQ Black Bar. Below is the 4th reason, the retail option traders are way too bullish. Also as mentioned in today’s After Bell Quick Summary, ISEE Indices & ETFs Only Index also shows that the retailers are very bullish.
Cycle wise, there’re 2 cycles due tomorrow, looks like a top to me. Allow one to two days for them to work especially the daily cycle. By the way, the next daily cycle due is on Dec. 14.
1.0.7 SPX Cycle Watch (Daily).
1.0.9 SPX Cycle Watch (60 min).
2.0.0 Volatility Index (Daily), a little bit ambiguity. Both filled black bar and hollow red bar mean a reversal, but the direction depends on the previous trend. Now the question is the previous direction is up or down? I’m inclined to consider the previous trend is down, so today’s filled black bar also means a reversal up. Together with the hollow red bar, the VIX had two reversal bars in a row, should be very friendly to bears. Of course, you can say that the filled black bar is to reverse the 12/3 big white bar, therefore plus the above mentioned 3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily) black bar, chances are very good, we’ll see a green day tomorrow. Well, which one is correct, we’ll know as early as tomorrow.
INTERESTING CHARTS:
The chart is speculation only, since we all agree that Monday is generally very bullish, so it’s logic to refer to the previous 2 cases on what happened if the Monday was not so bullish. Will history repeat itself? Or the 3rd time is different? Again we’ll know as early as tomorrow.
