01/11/2010 Market Recap: Pullback?

TREND MOMENTUM COMMENT – Click links to see chart or visit my public chart list. Long-term Up     Intermediate Up Neutral 3.0.0 TNX: Top in a month? 8.1.0 Normalized NYTV: Topped? 12/31 Recap: II and AAII survey both show extremely low # of bears. 4.0.4 Dow Theory: Multiple resistances and breadth very overbought. Short-term Up Neutral 1.0.2 SPY: 15 unfilled gaps. 01/04 Recap: Too many bearish extremes. 0.0.3 SPX: *CPC and CPCE MA10 are too low. 0.0.1 Top/Bottom Watch: NYDNV is too low.  0.0.5 QQQQ: Black bar, the 1st prophecy fulfilled, so top is close? 0.0.9 Put Call Ratio: *too extreme, top could be very close. 0.0.2 SPY: *Black bar was bearish in the past.

CONCLUSION Signals presented in the short-term comment area are enough to justify a short selling. *Shorted today on SPY black bar and QQQQ/IWM bearish reversal bar. It is a countertrend trade, be careful.

SPY SETUP ENTRY DATE INSTRUCTION STOP LOSS Mechanic trading signals, details are HERE.  Take profit whenever you see appropriate. ST Model 12/21 L 12/31 Low Added 0.0.4 SPY Mechanical Trading Model into my public chart list so that you can get some visual feelings about this trading model. Reversal Bar     NYMO Sell     VIX ENV

WATCH LIST COMMENT – *New update, they may not be mentioned in the report. Click links to see more details. IWM & QQQQ 4.1.2 Russell 2000 iShares (IWM Weekly) : Breakout but STO is too high may pullback soon. 1.3.0 Russell 2000 iShares (IWM Daily): *Bearish reversal bar doesn’t look good.  EMERGING 1.4.0 Shanghai Stock Exchange Composite Index (Daily): Big red bar means more downside ahead. FINANCIALS 4.4.2 Financials Select Sector SPDR (XLF Weekly): The breakout looks good, next target 15.70. REITS 3.6.0 Real Estate iShares (IYR Daily): On multiple support, could rebound.  OIL & ENERGY 3.4.0 United States Oil Fund, LP (USO Daily): Breakout then consolidation so could be up more. GOLD DOLLAR 3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily): Could be a Bull Flag in the forming. BOND 4.2.0 20 Year Treasury Bond Fund iShares (TLT Weekly): STO too low. 3.0.1 20 Year Treasury Bond Fund iShares (TLT Daily): *Hammer plus channel support. Bond could rebound, but overall it’s in a downtrend.

INTERMEDIATE-TERM: EXPECT HEADWIND AHEAD

No update, watch 4.1.0 S&P 500 Large Cap Index (Weekly) for overhead target/resistance and 4.0.4 Dow Theory: Averages Must Confirm for overbought breadth signals.

SHORT-TERM: EXPECT PULLBACK SOON

Take a look at today’s After Bell Quick Summary if you haven’t read it yet – if the statistics and patterns in the past few weeks repeat, then we could see a SPX weekly red bar this week.

0.0.9 Extreme Put Call Ratio Watch, top signal once more.

0.0.2 SPY Short-term Trading Signals, what happened after a black bar?

 

0.0.3 SPX Intermediate-term Trading Signals, CPCE MA10 becomes more extreme.

Also what happened when QQQQ Bearish Reversal Bar was formed in the past?

2.0.0 Volatility Index (Daily), VIX bar open and close both are out of BB is very rare, the past few occurrences were: 4/9/2009, 11/16/2006, 8/18/2006, 8/16/2006, 9/12/2005, 4/12/2005, 4/11/2005, 12/22/2004. Basically, they all had some kind of pullbacks thereafter.

6.2.3 VIX:VXV Trading Signals, take a look if interested, VIX:VXV new low which means the expected volatility in three month is far higher than that of now, so this chart is bearish.

   

INTERESTING CHARTS:

6.4.5 GLD and UUP Watch, GLD black bar so UUP rebound tomorrow?