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Wednesday, August 11, 2010

08/11/2010 Market Recap: The Sell Off May Not Last Long

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY    
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 SELL 5 of 5 are NEUTRAL Trend is down, I hold partial short position overnight.
GANN DAY MOON/SOLAR CYCLE CONCLUSION
8/11,8/13,8/26 08/24 / 08/23 8/9,8/11,8/23 Next pivot date: 08/06 – 08/11, 08/23 – 08/26
BULLISH *6.3.2c Major Distribution Day Watch: NYDNV:NYUPV > 35, 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 07/30 low
*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

See 07/30 Market Recap for more details.

SHORT-TERM: THE SELL OFF MAY NOT LAST LONG

Whether the market will test the 07/01 low is still hard to say. The only thing I’m sure is, most likely within 2 to 4 trading days, we’ll have a tradable bottom. Why? See chart 6.3.2c Major Distribution Day Watch. This chart worked well even during the year 2008 crash, so I don’t see any reason why it won’t work this time.

MDD 

The chart below is another way to speculate the potential pullback time. Since 04/26, all the pullbacks lasted 3 to 8 trading days. From 08/09 high to 08/17 turnaround Tuesday, it’s 6 trading days and happens to be the Fib 23.6% from 07/01 low to 08/09 high – a potential time resistance and which also fits well as mentioned above, a tradable bottom within 2 to 4 trading days. As for price target, the 1056 to 1060 Fib confluences area looks suspicious.

PriceAndTimeTarget 

The chart below is for fun only. The very unique thing today is that SPY down more than 2% while ISEE Equities Only Index closed above 200, signaling that retailers are way too bullish (Only 1 put for each 2 call). The similar case happened only twice since 2004. The reason I’m showing this chart is, it fits well for my prediction above that the pullback won’t last long (for the 1st leg) and illustrates the idea of 2 legs down, I mentioned in today’s After Bell Quick Summary.

SPYDownHugeOnISEESurge 


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
IWM UP 4.1.2 Russell 2000 iShares (IWM Weekly): 2 black bars in a row, doesn’t look good.
CHINA UP
EMERGING UP
EUROPEAN UP
CANADA UP
BOND UP
EURO UP
GOLD DOWN
GDX DOWN
OIL UP
ENERGY UP
FINANCIALS UP
REITS UP 4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
MATERIALS UP
Posted by Cobra at 9:25 PM
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