08/03/2010 Market Recap: Still Not Far Away from Overbought Zone

TREND MOMENTUM COMMENT Long-term 1 of 2 are SELL     Intermediate 3 of 3 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode Short-term Model is BUY 5 of 5 are NEUTRAL Trend is up but the model did nothing today. GANN DAY MOON/SOLAR CYCLE CONCLUSION 8/6,8/11,8/26 08/09 / 08/08 8/2,8/9,8/11,8/23 Next pivot date: 08/09 – 08/11, 08/23 – 08/26

BULLISH 0.2.1 10Y T-Bill Yield: ROC(30) < –9, so market bottomed? BEARISH

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 07/20 L Breakeven

*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: THE FIRST NINE TRADING DAYS OF AUGUST ARE HISTORICALLY WEAK

See 07/30 Market Recap for more details.

INTERMEDIATE-TERM: THE CORRECTION SINCE 04/26 ISN’T OVER, THE REBOUND SINCE 07/01 IS NEAR END

See 07/30 Market Recap for more details.

In 07/30 Market Recap, I mentioned 08/06 could be a pivot date. Since now it’s our very next pivot date, so today I’ll explain here why it’s important. My guess is that the market keeps bouncing or consolidating to 08/06 to form a top. Of course, if the market keeps dropping from now to 08/06 then the 08/06 would be a bottom.

08/06 is NFP day (Non Farm Payroll). See chart below, clearly NFP day was an important pivot day for many many swings.

 

From the Gann Day table below we can see in the past 10 years, lots of important highs/lows happened around 6.

 

If you count all the rebound days since 04/26 top, you will see every rebound lasted 5 to 9 trading days, so assume the rebound now takes the mini 5 rebound days, it’d be exactly on 08/06.

 

SHORT-TERM: STILL PRETTY CLOSE TO OVERBUGHT ZONE

Nothing to say today, I have no idea how the market is going to play the next. If as mentioned above in the intermediate-term session, every rebound should last 5 to 9 trading days, then the rebound since 07/30 isn’t over yet. However, if the market rises huge tomorrow, then probably we’ll see a pullback the day after tomorrow because the T2122 and T2112 I mentioned in 08/02 Market Recap are still not far away from each correspondent overbought zone.

 

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	UP	4.1.1 Nasdaq 100 Index (Weekly): Bearish 1-2-3 formation, target 1565.
IWM	UP
CHINA	UP
EMERGING	UP	4.1.6 iShares MSCI Emerging Markets (EEM Weekly): Bear Flag?; EEM:$SPX too high.
EUROPEAN	UP	4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.45; Bear Flag?
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	DOWN
GDX	DOWN
OIL	UP	4.4.0 United States Oil Fund, LP (USO Weekly): Bear Flag?
ENERGY	UP	4.4.1 Energy Select Sector SPDR (XLE Weekly): Bearish 1-2-3 formation, target $43.14.
FINANCIALS	UP
REITS	UP
MATERIALS	UP