Live Update

Tuesday, August 31, 2010

08/31/2010 Market Recap: One Day Up One Day Down?

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are SELL  
Intermediate 3 of 3 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode.
Short-term Model is SELL 5 of 5 are NEUTRAL Trend is down, I hold no position overnight.
GANN DAY MOON/SOLAR CYCLE CONCLUSION
9/10 09/08 / 09/08 9/5, 9/6 Next pivot date: 09/07 – 09/10
BULLISH *6.4.6b QQQQ Hollow Red Bar Watch: Hollow Red bar reversal?
BEARISH 0.2.3 NYSE McClellan Oscillator: the 3rd Hindenburg Omen triggered.
T2105 too high.
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM:
SSO/SDS, UPRO/SPXU
Non-Stop 08/16 S N/A For general direction guide only.
ST Model *Sell short if SPY tomorrow’s open > tomorrow’s close. The stop loss will be 1.9 * ATR(10).
*Treat this model as a joke because someone with bogus email address told me that I should throw this model away.  So again and again and again, for fun only.
*Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.

SEASONALITY: BEARISH EARLY NEXT WEEK, BULLISH LATER

See 08/27 Market Recap for more details.

INTERMEDIATE-TERM: STATISTICS ARE BEARISH, THE NEXT PIVOT DATE IS AROUND 09/07 TO 09/10

See 08/27 Market Recap for more details.

    SHORT-TERM: QQQQ HOLLOW RED BAR GIVES BULL HOPES BUT SPX SHOULD BREAK ITS RECENT ONE DAY UP ONE DAY DOWN PATTERN FIRST

    With the help of the bullish seasonality on the first trading day of each month (See 08/27 Market Recap), I hope SPX could finally break the recent one day up one day down pattern. No matter how bullish you think the market is going to be, at least for the very first step, the SPX must be able to rise 2 days in a row, agree? So let’s see tomorrow. Overall, the daily chart doesn’t look good, especially the 1040 has been tested 3 times so the chances for it to hold the 4th test is remote. And once 1040 were broken, then according to the Measured Move, the 07/01 low would be the minimum target.

    SPXDaily 

    6.4.6b QQQQ Hollow Red Bar Watch, this is a good news for bulls. Whether is today a bottom of some kind, we’ll have to wait for a few days. Just remind you of this chart for now.

    QQQQHollowRedBarWatch 


    HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
    TREND DTMFS COMMENT – *New update. Click BLUE to see chart if link is not provided.
    QQQQ DOWN
    IWM DOWN
    CHINA UP Head and Shoulders Bottom in the forming?
    EMERGING DOWN 4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high.
    EUROPEAN DOWN
    CANADA UP BUY
    BOND UP *BUY 4.2.0 20 Year Treasury Bond Fund iShares (TLT Weekly): Too far away from MA(200).
    EURO DOWN *SELL
    GOLD UP *SELL
    GDX UP 4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high.
    3.2.1 Market Vectors Gold Miners (GDX Daily): ChiOsc is too high.
    OIL DOWN *SELL
    ENERGY DOWN
    FINANCIALS DOWN 4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
    REITS DOWN 4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
    MATERIALS DOWN
    *DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals. Use it as a filter, don’t trade directly.

    08/31/2010 After Bell Quick Summary

    The bottom line the short-term trend is down and I hold no short position overnight.

    As for tomorrow, I don’t see any trick but since so far the seasonality worked pretty good (see 08/27 Market Recap), so I guess we might see an up day tomorrow according to the seasonality below:

    1. According to Stock Trader’s Almanac, the first trading day in September, SPX up 11 of last 14.
    2. See 08/27 Market Recap for the Labor Day seasonality chart, tomorrow should be bull friendly.

    Monday, August 30, 2010

    08/30/2010 Market Recap: Green Day Needed Tomorrow

      TREND MOMENTUM COMMENT
    Long-term 2 of 2 are SELL  
    Intermediate 3 of 3 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode.
    Short-term Model is SELL 5 of 5 are NEUTRAL Trend is down, I hold no position overnight.
    GANN DAY MOON/SOLAR CYCLE CONCLUSION
    9/10 09/08 / 09/08 9/5, 9/6 Next pivot date: 09/07 – 09/10
    BULLISH
    BEARISH 0.2.3 NYSE McClellan Oscillator: the 3rd Hindenburg Omen triggered.
    T2105 too high.
    *0.2.5 NYSE Total Volume: Too 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 08/16 S N/A For general direction guide only.
    ST Model
    *Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.

    SEASONALITY: BEARISH EARLY NEXT WEEK, BULLISH LATER

    See 08/27 Market Recap for more details.

    INTERMEDIATE-TERM: STATISTICS ARE BEARISH, THE NEXT PIVOT DATE IS AROUND 09/07 TO 09/10

    See 08/27 Market Recap for more details.

      SHORT-TERM: A GREEN DAY TOMORROW IS NEEDED TO AVOID FURTHER BAD SIGN

      Nothing to say today except a green day tomorrow is necessary to avoid a further bad sign. See chart below.

      MAD 

      0.2.5 NYSE Total Volume, not good, still look like a top instead of a bottom. By the way, price down on volume down is not at all a bullish sign, in a downtrend, it means bearish continuation. What bulls really need to see is price down on volume surge which may imply a process of capitulation.

      NYTV 


      HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
      TREND DTMFS COMMENT – *New update. Click BLUE to see chart if link is not provided.
      QQQQ DOWN
      IWM DOWN
      CHINA UP Head and Shoulders Bottom in the forming?
      EMERGING DOWN 4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high.
      EUROPEAN DOWN
      CANADA UP *BUY
      BOND UP *SELL 4.2.0 20 Year Treasury Bond Fund iShares (TLT Weekly): Too far away from MA(200).
      EURO DOWN
      GOLD UP *SELL
      GDX UP BUY 4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high.
      3.2.1 Market Vectors Gold Miners (GDX Daily): ChiOsc is too high.
      OIL DOWN
      ENERGY DOWN
      FINANCIALS DOWN 4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
      REITS DOWN 4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
      MATERIALS DOWN
      *DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals. Use it as a filter, don’t trade directly.

      08/30/2010 After Bell Quick Summary

      The bottom line, the short-term trend is down and I hold no position overnight.

      One trick for tomorrow, when NYSE Down Volume : NYSE Up Volume >= 9 (Major Distribution Day), 32 out 50 times (64%) a green day the next. Noticed that the trick didn’t work well recently, so be careful.

      1

      I searched as far as to year 2000, there wasn’t a case like we have now – A Major Accumulation Day (NYSE Up Volume : NYSE Down Volume >= 9) followed by a Major Distribution Day (NYSE Down Volume : NYSE Up Volume >= 9) back to back. So apparently we’re now in no man’s land. The consequences? Well, I wish I could know. The only thing I’m sure is tomorrow will be a key day as bulls need a green day to avoid a bad sign that worked 8 out of 8 times recently. I’ll talk about this in tonight’s report.

      Sunday, August 29, 2010

      08/27/2010 Market Recap: How far can rebound go?

        TREND MOMENTUM COMMENT
      Long-term 2 of 2 are SELL  
      Intermediate 3 of 3 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode.
      Short-term Model is BUY 5 of 5 are NEUTRAL Trend is up, I hold both short and long over weekend.
      GANN DAY MOON/SOLAR CYCLE CONCLUSION
      9/10 09/08 / 09/08 9/5, 9/6 Next pivot date: 09/07 – 09/10
      BULLISH
      BEARISH 0.2.3 NYSE McClellan Oscillator: the 3rd Hindenburg Omen triggered.
      T2105 too high.
      SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
      TRADING PLATFORM:
      SSO/SDS, UPRO/SPXU
      Non-Stop 08/16 S N/A For general direction guide only.
      ST Model
      *Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.

      Well, guys, today’s report is late and it wasn’t easy. I broke my Windows XP last night and tried in vein to restore the XP (so that I don’t need to reinstall all the other software) until 4am and finally gave up. So at 8am, after a small nap, I started to install Windows 7 and every other software until 2pm (fortunately, so far I don’t see I lost any of my work). The report began on 4pm after another nap. Well, here it goes. A promise is a promise and I sure will try my best to stick to it, no matter what.

      SEASONALITY: BEARISH EARLY NEXT WEEK, BULLISH LATER

      The early next week is bearish while the later week may be bullish. Overall, according to 6.5.2c Week Seasonality Watch, the whole next week may end in red eventually.

      WeekSeasonality 

      According to Stock Trader’s Almanac:

      1. August next to last trading day, SPX up only twice in last 13 years.
      2. First trading day in September, SPX up 11 of last 14.

      The chart below is from sentimentrader, showing seasonality around Labor Day.

      holiday_labor 

      6.5.2b Month Day Seasonality Watch, also says the early next week is bearish.

      MonthDaySeasonality 

      INTERMEDIATE-TERM: STATISTICS ARE BEARISH, THE NEXT PIVOT DATE IS AROUND 09/07 TO 09/10

      For the intermediate-term, I have no hard evidence arguing that 08/25 WAS NOT THE BOTTOM. Things I’m certain are:

      1. The bearish statistics mentioned in 08/20 Market Recap are still valid.
      2. 6.2.3 VIX:VXV Trading Signals is still too low.
      3. The weekly NYSI STO in 4.1.0 S&P 500 Large Cap Index (Weekly) is not at a bull friendly position.
      4. The next pivot date is around 09/07 to 09/10. Not sure it means a top or bottom though.

      Overall, I’m inclined to believe that this is just a rebound that won’t go too far.

      Since T2105 keeps making new high (see 08/20 Market Recap and 08/24 Market Recap), so I tightened the test conditions again: Sell short at close when MACD(10, 200, 1) > 0.82 (so called normalizing), cover when MACD(10, 200, 1) < 0.82, well,  100% winning rate since year 2000.

      T2105BackTestSummary 

      The chart below is the visual back test of the above test results. For you to “feel” it.

      T2105VisualBackTest 

      The chart below should be clear, why 09/07 to 09/10 could be the next pivot date. Although, the cycle and Non Farm Payroll both are arguing that 09/06 (Remember the magic day 6? See 08/03 Market Recap about in the past 10 years, lots of important highs/lows happened around 6) could be the pivot date, but the problem is that 09/06 is the Labor Day holiday. At the current stage, it’s hard to say whether the coming pivot date means a top or bottom, and I’m still wait for the 3rd party document to perhaps provide more specific date.

      TimeAnalysis  

      The chart below explains why I treat the Non Farm Payroll day as a potential pivot day. In fact, I guess, the magic day 6 mentioned above could probably related to the Non Farm Payroll day which is scheduled on the first Friday every month that may easily happens around day 6.

       NFP

      SHORT-TERM: HIGHER THEN THE FRIDAY’S HIGH IS GUARANTEED, THE MAX REBOUND TARGET IS SPY $108.87

      The bottom line:

      1. A high that is higher than the Friday’s high is guaranteed.
      2. The Double Bottom text book target is SPY $108.87.

      The rebound should last more than just the Friday. The reasoning is simple: law of inertia, a forward accelerating car could not be stop without decelerating first. See chart below, have you ever seen a Major Accumulation Day happening exactly on a market top? Therefore at minimum of minimum, there should be a high sometimes next week that is higher than the Friday’s high.

      HigherHighGuaranteed 

      1.0.6 SPY Unfilled Gaps, this chart also guarantees, a Monday gap down open, if any, will be filled, because an unfilled Monday gap down would mean a back to back unfilled gaps which are very very rare.

      UnfilledGaps 

      As for the rebound target, I believe everyone now sees the Double Bottom pattern with the text book target around SPY $108.87 and happens to be on Fib 50%. And the coincidence makes the target look more logic. (Hmm, I’m wondering, anyone likes to say that since everyone is aware this Double Bottom pattern, so it won’t work? Well, anyone? Please raise your claw.)

      SPY60min

      Personally, I believe such a text book target could be the maximum the rebound could go this time.

      Why could it be the maximum the rebound can go? The main reason is, as mentioned in the intermediate-term session above, the 6.2.3 VIX:VXV Trading Signals is too low. You should still remember the reversal of reversal of reversal bottom pattern I mentioned in the 08/26 Market Recap. Now let’s take a look at the chart again. This time, let’s compare all the past 4 bottom patterns. Looks to me, the reversal of reversal of reversal we had this time, not only is the weakest but also the VIX:VXV is the lowest. And an interesting thing is, the rebound target, if still follows the past rate, is SPY $109.31 which happens to be around the Double Bottom target I mentioned above.

      RofRofR 


      HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
      TREND DTMFS COMMENT – *New update. Click BLUE to see chart if link is not provided.
      QQQQ DOWN
      IWM DOWN  
      CHINA UP Head and Shoulders Bottom in the forming?
      EMERGING DOWN 4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high.
      EUROPEAN DOWN  
      CANADA UP  
      BOND UP 4.2.0 20 Year Treasury Bond Fund iShares (TLT Weekly): Too far away from MA(200).
      EURO DOWN
      GOLD UP  
      GDX UP BUY 4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high.
      *3.2.1 Market Vectors Gold Miners (GDX Daily): ChiOsc is too high.
      OIL DOWN  
      ENERGY DOWN  
      FINANCIALS DOWN   4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
      REITS DOWN   4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
      MATERIALS DOWN
      *DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals. Use it as a filter, don’t trade directly.

      Friday, August 27, 2010

      08/27/2010 After Bell Quick Summary

      The bottom line, the short-term trend is up, I hold both long and short over the weekend, kind like profits locking, although strictly according to my short-term model, I should hold no position over the weekend.

      I’ve got mixed signals for the next Monday. My best guess is since today is a Major Accumulation Day (NYSE Up Volume to NYSE Down Volume >= 9), so the next Monday shall be a small range bar and whatever gap, up or down, if any, shall be filled on the same day. So no hurry in making any decision now no matter you’re bull or bear.

      Now let’s take a look at those mixed signals.

      Bear’s camp:

      Seasonality doesn’t favor bulls for the first 2 days of the next week according to Stock Trader’s Almanac.

      Also selling short at today’s close and cover at close the next Tuesday WAS mostly profitable since Sep 2009.

      3

      And slightly bearish next Monday because NYADV closed above 2600.

      1

      Bull’s camp:

      When CPC <= 0.81, 44 out of 65 times (68%) a green day the next day.

      2

      Enjoy your weekend!

      Thursday, August 26, 2010

      08/26/2010 Market Recap: Will the 4th time be different?

        TREND MOMENTUM COMMENT
      Long-term 2 of 2 are SELL  
      Intermediate 3 of 3 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode.
      Short-term Model is SELL 5 of 5 are NEUTRAL Trend is down, I hold both short and long overnight.
      GANN DAY MOON/SOLAR CYCLE CONCLUSION
      8/26, 9/10 08/24 / 08/23 8/23 Next pivot date: 08/23 – 08/26
      BULLISH
      BEARISH 0.2.3 NYSE McClellan Oscillator: the 3rd Hindenburg Omen triggered.
      T2105 too high.
      SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
      TRADING PLATFORM:
      SSO/SDS, UPRO/SPXU
      Non-Stop 08/16 S N/A For general direction guide only.
      ST Model
      *Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.

      SEASONALITY: NO UPDATE

      INTERMEDIATE-TERM: STATISTICS ARE BEARISH

      See 08/20 Market Recap and 08/24 Market Recap for more details.

      SHORT-TERM: UP TOMORROW, BUT DOWN THIS WEEK AND NEXT WEEK?

      No hard evidences today, but 2 speculations, for fun only.

      I said yesterday, whether the 08/25 bullish reversal bar means a bottom, needs a follow-through. Too bad, there’s no follow-though today. So does this mean that 08/25 is not a bottom? The chart below shows the most recent bottom pattern: A bullish reversal bar followed by Dark Cloud Cover all had led to a huge up bar the next bar which for now is tomorrow. The question is whether the 4th time will be different? Anyway, at least whether the market has bottomed, we have to see tomorrow, agree?

      BullishReversalFollowedByDarkCloudCover 

      In 08/20 Market Recap, I said if red week this week, then be careful about the very first 4 consecutive down weeks this year, in another word, if red this week, then probably red the next next week. Looks to me now, unless a miracle happens tomorrow otherwise this week will likely end in red.

      Down4ConsecutiveWeeks 

      6.5.2c Week Seasonality Watch can be seen as an insurance for a red next week, because it seems the last week of every month since Aug 2009 were more likely bearish (Stockcharts counts the next week as the last trading week in August not the first trading week in September).

      WeekSeasonality 


      HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
      TREND DTMFS COMMENT – *New update. Click BLUE to see chart if link is not provided.
      QQQQ DOWN
      IWM DOWN  
      CHINA UP Head and Shoulders Bottom in the forming?
      EMERGING DOWN 4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high.
      EUROPEAN DOWN  
      CANADA UP SELL
      BOND UP 4.2.0 20 Year Treasury Bond Fund iShares (TLT Weekly): Too far away from MA(200).
      EURO DOWN
      GOLD UP BUY
      GDX UP BUY 4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high.
      OIL DOWN  
      ENERGY DOWN  
      FINANCIALS DOWN   4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
      REITS DOWN   4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
      MATERIALS DOWN
      *DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals. Use it as a filter, don’t trade directly.

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