09/21/2010 Market Recap: Key Day Tomorrow

TREND MOMENTUM COMMENT Long-term 2 of 2 are SELL   Intermediate 3 of 3 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode. Short-term Model is BUY 6 of 6 are NEUTRAL The trend is up, I hold partial long position over night. GANN DAY MOON/SOLAR CYCLE CONCLUSION 9/23 09/23 / 09/23 Week of 09/24 Next pivot date: 09/21 – 09/23

BULLISH 09/17 Market Recap: Down 3 weeks then up 3 weeks, the 8th and 9th week is statistically bullish. 0.1.1 SPX Intermediate-term Trading Signals: Head and Shoulders Bottom breakout, target 1242. BEARISH 1.0.6 SPY Unfilled Gaps: 18 unfilled gaps, the max was 18. AAII is way too bullish. *6.4.3a SPY Bearish Reversal Day Watch: Bearish reversal day?

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop 09/07 L N/A ST Model 09/20 L *09/21 Low *Adjust stop loss.

*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.

SHORT-TERM: KEY DAY TOMORROW

As mentioned in today’s After Bell Quick Summary, according to the past FOMC red day pattern, we need a green day tomorrow to avoid further pullbacks. The question is, will we have a green day tomorrow? I have no idea (well, I know you know I’d say that. LOL). However, the very unique thing I noticed is TICK closed below –840 which looks very ominous. As illustrated in the chart below, normally such kind of so negative close should only occur on a big red day, while today SPX is just a small red, so the question is why TICK closed so negative? In another word is that people rushed to the exit right before the close, why was that? Could be some bad news awaiting us tomorrow?

 

For short-term still suggest not getting to bullish. Besides the 09/21 to 09/23 time window and 1.0.0 S&P 500 SPDRs (SPY 60 min) showing lots of negative divergences, there’re 2 additional bad signs today:

VIX Leads SPX, negative divergence plus cross below EMA20 again. Will the 3rd time be the charm? Personally, I consider this chart as very reliable, so a pullback should be imminent.

 

6.4.3a SPY Bearish Reversal Day Watch, as long as we’re not repeating what happened in April, a top of some kind should be close.

 

INTERMEDIATE-TERM: STATISTICALLY BULLISH FOR THE NEXT 2 WEEKS

We could see 2 to 3 legs up while now is the very first leg up. See 09/17 Market Recap for more details.

SEASONALITY: WEEK AFTER SEPTEMBER TRIPLE WITCHING DOW DOWN 6 OF LAST 7

According to Stock Trader’s Almanac, week after September Triple Witching, Dow down 6 of last 7. Five in a row 2002 – 2006 with heavy losses 2002 – 2005. Also see September’s Triple Witching for more statistics.

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): NDX to SPX ratio too high.
IWM	UP
CHINA
EMERGING	UP	4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high.
EUROPEAN	UP	*Black bar, pullback?
CANADA	*LA	TOADV MA(10) too high plus lots of reversal like bars, pullback?
BOND	*UP
EURO	*UP
GOLD	UP
GDX	*UP	4.3.1 Market Vectors Gold Miners (GDX Weekly): GDX to SPX ratio too high and Bearish Engulfing.
OIL	*DOWN
ENERGY	UP
FINANCIALS	*LA	4.4.2 Financials Select Sector SPDR (XLF Weekly): Head and Shoulders Top in the forming?
REITS	*LA	4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging and IYR to SPX ratio too high.
MATERIALS	UP

*LA = Lateral Trend.