09/22/2010 Market Recap: Two Red Days after a Major Accumulation Day

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 confused 6 of 6 are NEUTRAL The trend is unclear and I hold no position overnight. 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? *6.3.1b Major Accumulation Day Watch: 2 red days after MAD, more pullbacks?

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   *Stopped out of long position entered on 09/20 flat.

*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: TREND IS NOT CLEAR OFFICIALLY BUT I’M BEARISH BIASED

Short-term direction is not clear, either an up Price Channel or a Bear Flag is in the forming. So we’ll have to wait until tomorrow.

 

Since the chart pattern doesn’t confirm, so officially I cannot say top was in, but purely from signals point of view, I shall say either top was in or very close.

6.5.1a SPX and FOMC. As mentioned in today’s After Bell Quick Summary, a red day after a red FOMC meant more pullbacks ahead. Just it had only 3 cases recently, so may not mean anything. However, don’t forget the chart 6.3.1b Major Accumulation Day Watch as 2 red day after a Major Accumulation Day also meant more pullbacks. If a red day after a red FOMC means more pullback is merely a coincidence, then 2 red day after a Major Accumulation Day cases reflecting the same thing is just the 2nd coincidence? Two coincidences are just coincidence? Well, better take them a little bit seriously, I think.

 

VIX held below EMA(20) the 2nd day, if yesterday was merely a whipsaw, what the odds are whipsaw again today?

 

1.1.1 PowerShares QQQ Trust (QQQQ Daily), QQQQ hollow red bar doesn’t look good either.

 

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. *1.1.1 PowerShares QQQ Trust (QQQQ Daily): Hollow red bar, pullback?
IWM	*DOWN
CHINA
EMERGING	UP	4.1.6 iShares MSCI Emerging Markets (EEM Weekly): EEM to SPX ratio too high. *1.4.1 iShares MSCI Emerging Markets (EEM Daily): Black bar under resistance, pullback?
EUROPEAN	UP	*2 black bars in a row, pullback?
CANADA	*DOWN	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	*DOWN	*2 reversal like bars rejected by MA(200), doesn’t look good.
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 and IYR to SPX ratio too high.
MATERIALS	UP

*LA = Lateral Trend.