07/15/2010 Market Recap: New Recovery High then Bigger Pullback Thereafter

TREND MOMENTUM COMMENT Long-term 1 of 2 are BUY     Intermediate 2 of 3 are SELL 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode Short-term 5 of 5 are NEUTRAL The trend is still up but I hold no overnight long position. GANN DAY MOON/SOLAR CYCLE CONCLUSION 07/14-07/17 07/25 / 07/23 07/16, 07/31 Next pivot date: 07/16

BULLISH 6.3.1a Major Accumulation Day Watch: Tradable bottom when 2 MAD within 5 days? BEARISH 6.2.3 VIX:VXV Trading Signals: A little bit low.

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop *07/15 L N/A Be sure to check 8.2.2a to 8.2.2g to understand the risks. ST Model *Setup mentioned on 07/14 was not confirmed and therefore no long valid.

*Please make sure you understand how to use the table above. The main purpose of this report is to provide information so contradictory signals are always presented.

SEASONALITY: EARLY THIS WEEK IS BULLISH, OE FRIDAY IS BEARISH

See 07/09 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT HUGE REBOUND BEFORE 2ND LEG DOWN

Still expect a 2nd leg down but since the retailers sentiment is way too bearish so the rebound we have now could be huge. See 07/09 Market Recap for more details.

SHORT-TERM: MARKET MAY TURN DOWN SOON

All I wanted to say were said in 07/14 Market Recap, time, price and price pattern are all arguing for a pullback. Another reversal like bar is formed today. Three reversal like bars under major bear trend line, should mean something, shouldn’t it? So still maintain the yesterday’s forecast: Expect a new recovery high (higher than the Tuesday’s high) but be careful of a bigger pullback thereafter.

 

NYADV MA(5) at extremely high pattern mentioned yesterday. Too bad it didn’t repeat the last year’s mad cow pattern today. Although history may not simply repeat itself, but it’s no harm to be extra careful here, especially the next week as according to the Stock Trader’s Almanac, week after July expiration, Dow down 7 of last 11, 2007 –4.2%, 2008 –4.3%.

 

0.2.1 10Y T-Bill Yield, I’ve mentioned the importance of this chart. Today it confirmed the “kiss goodbye”, not looking good. I know some may say because the bond market closed at 3:00pm ET, so missed the last 30 minutes huge up. Well, let’s take a look at TLT intraday chart, it didn’t fall hard on the last 30 minute, so maybe the bond market closes one hour earlier (so that it avoided a big drop) is not a good excuse.

 

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

	TREND	COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ	DOWN	4.1.1 Nasdaq 100 Index (Weekly): Bearish 1-2-3 formation, target 1565.
IWM	DOWN
CHINA	DOWN
EMERGING	UP
EUROPEAN	UP	4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.45.
CANADA	DOWN	4.1.5 iShares CDN S&P/TSX 60 Index Fund (XIU.TO Weekly): Bearish 1-2-3 formation, target $15.30.
BOND	UP
EURO	UP
GOLD	UP	4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99.
GDX	UP
OIL	DOWN
ENERGY	DOWN	4.4.1 Energy Select Sector SPDR (XLE Weekly): Bearish 1-2-3 formation, target $43.14.
FINANCIALS	DOWN
REITS	DOWN	4.4.3 Real Estate iShares (IYR Weekly): Pay attention to XHB weakness!
MATERIALS	DOWN	4.4.4 Materials Select Sector SPDR (XLB Weekly): Double Top, target $23.27.