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Monday, December 6, 2010

12/06/2010 Market Recap: Bear’s Best Day of Best Week to Attack

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 3 of 5 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 I hold partial long position overnight.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
12/02,12/09,12/11 12/05 : 12/07 Week 11/26, 12/26 Next pivot date: 12/03 – 12/06, 12/09 – 12/11
BULLISH 0.1.1 SPX Intermediate-term Trading Signals: Head and Shoulders Bottom breakout, target 1242.
09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
10/01 Market Recap: Positive September plus mid-term election means 11%+ up to year end.
10/29 Market Recap: The last 2 months of year are bullish.
11/05 Market Recap: SPX daily bar completely out of BB may mean bulls are safe till the year end.
11/12 Market Recap: 77% chances the 11/05 high will be revisited in 3 weeks.
6.3.1a Major Accumulation Day Watch: 2 MAD within 5 days means a tradable bottom at least.
BEARISH 1.0.6 SPY Unfilled Gaps: 22 unfilled gaps, the max is 22.
10/29 Market Recap: Commercial (smart money) short Nasdaq 100 heavily according to COT Report.
11/12 Market Recap: Smart/Dump money confidence spread too high.
0.2.1 10Y T-Bill Yield: ROC(30) >= 9, topped? (Due to Quantitative Easing, I’m not sure if it still works)
1.2.0 INDU Leads Market: INDU had a lower low, so SPX might follow eventually.
8.2.7b Record High ISEE Equities Only Index Readings 2010: 2nd record high, top is close?
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 11/23 S 1.9*ATR(10) Stopped out on 12/02 with losses.
NYMO Sell 11/12 S 11/26 High Stopped out flat on 12/01. Reference only, not meant to be followed.

SHORT-TERM: ISEE EQUITIES ONLY INDEX IS STILL WAY TOO HIGH

As I’ve been saying how far the market could go may depend on how crazy the ISEE Equities Only Index readings are. Unfortunately, today’s ISEE Equities Only Index closed above 260 again. The chart below shows all the recent records when the index closed above 260, looks a lot like 04/26 top, doesn’t it? (Also see 8.2.7a Record High ISEE Equities Only Index Readings 2006 – 2007 for the past record)

ISEEEquitiesOnlyIndexWatch 

Let’s use another way to measure how extreme the current ISEE Equities Only Index readings are. The chart below highlighted in red are all the cases when ISEE Equities Only Index MA(10) >= 229. Should be clear enough to see what happened thereafter, right?

ISEEEquitiesOnlyIndexMA10 

I have no idea whether the ISEE Equities Only Index would work or not this time, although theoretically, from TA point of view, we should never ever think maybe this time is different. For now the best I can say is, as mentioned in the 12/03 Market Recap, if bear wants a revenge, either this week or has to wait after the new year.  From all the evidences I’ve collected so far, we’re likely to see a red day tomorrow plus the fact today is the Magic Day 6, so if, I said if, the bear’s best chance is this week, then today probably is bear’s best day of the week. Well, I mean one of the best days of the week, LOL.

Why is very likely a red day tomorrow?

Besides the CPC <= 0.80 mentioned in today’s After Bell Quick Summary, take a look at below for what happened the next day after a VIX black bar?

VIXBlackBar 

Seasonality wise, tomorrow is the most likely red day in December.

Seasonality

Then why is  today is the bear’s best (opportunity) day of the week?

Besides the New Moon and Solar Term date listed in the table above, today is the Magic Day 6 which had the most pivot days since year 2000.

PivotDateSince2000 

Also the most recent short-term rebound usually lasted 5 to 7 trading days while we’re on the day 5 rebound, so if this still is a short-term rebound, then the turning point should be around now.

 ReboundTimeRange

INTERMEDIATE-TERM: BULLISH BUT NEED SEE HOW MARKET BREAKOUT ABOVE SPX 1227

Temporarily maintain a bullish view for the intermediate-term, need see how the market breakout above SPX 1227 though. Right now the biggest problem is ISEE Equities Only Index is way too crazy. See 12/03 Market Recap for more detail.

SEASONALITY: DECEMBER HAS BEEN BULLISH

See 12/03 Market Recap for more detail.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 12/02 L
NDX Weekly UP NASI STO(5,3,3) sell signal but oversold now.
IWM  
IWM Weekly UP
CHINA Could be a Bear Flag in the forming.
CHINA Weekly UP
EEM
EEM Weekly UP
XIU.TO 12/02 L
XIU.TO Weekly UP
TLT
TLT Weekly DOWN
FXE *ChiOsc is way too high.
FXE Weekly DOWN
GLD
GLD Weekly UP
GDX 12/02 L
GDX Weekly UP
USO ChiOsc is a little too high.
WTIC Weekly UP
XLE 06/15 L ChiOsc is way too high.
XLE Weekly UP
XLF 10/15 L
XLF Weekly UP
IYR Could be a Bear Flag in the forming.
IYR Weekly UP Home builders are lagging.
XLB 12/01 L ChiOsc is way too high.
XLB Weekly UP

  1. 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.
  2. Position reported in short-term session of the table above is for short-term model only, I may or may not hold other positions which will not be disclosed.
  3. Conclusions can be confirmed endlessly, but trading wise, you have to take actions at certain risk level as soon as you feel the confirmation is enough. There’s no way for me to adapt to different risk levels therefore no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
  4. * = New update; Blue Text = Link to a chart in my public chart list.
  5. Trading signals in OTHER ETFs table are mechanical signals. See HERE for back test results. 08/31 L, for example, means Long on 08/31.
  6. UP = Intermediate-term uptrend. Set when I see at least one higher high and higher low on weekly chart.
  7. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on weekly chart.
Posted by Cobra at 9:11 PM
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