04/28/2011 Market Outlook: Still expect some weakness ahead

SHORT-TERM: EXPECT PULLBACK AS EARLY AS TOMORROW

Three cents:

1. Still expect a pullback, as early as tomorrow.
2. Today’s Trading Signals is very important, please take a look because it mentioned that SPY ST Model is yelling for a top now. The model has very good credit for calling a top in the past, so although sounds stupid to call a top now but let’s just don’t neglect it.
3. Trading wise, as long as it’s not a sharp pullback, it’s a buy opportunity.

The arguments for the pullback are mostly the same as those mentioned in 04/27 Market Outlook, just some are even more extreme.

SPX closes out of BB top for 3 consecutive days, short at today’s close and cover tomorrow (if SPX closes below BB top), you’ll have 90% chances since year 2003. Remember I said in today’s Trading Signals that short at the close may not be the best entry? Well, the chart below also explains why as 100% chances we’ll see a higher high tomorrow.

T2112 becomes more extreme.

The 3rd reason is for fun only. Have you noticed that the recent patterns are up 3 days then down 1 day? LOL

There’re some other bearish signals, not necessarily mean a pullback tomorrow, but are by no means bull friendly in the short-term.

OEX Put/Call Ratio surge again.

Rydex Traders (we retailers) are way too bullish now.

INTERMEDIATE-TERM: SPX NOW IN 1352 TO 1381 WAVE 5 PRICE TARGET AREA, WATCH FOR POTENTIAL REVERSAL

See 04/27 Market Outlook for more details.

SEASONALITY: BEARISH MONDAY, THURSDAY AND FRIDAY, BULLISH WEDNESDAY

See 04/21 Market Recap for more details.

ACTIVE BULLISH OUTLOOKS:

• 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
• 02/23 Market Recap: Pullback could last 4 weeks, then 02/18 highs will be revisited.
• 03/11 Market Recap: Bullish in 3 to 6 months.
• 04/01 Market Recap: Bullish April.
• 04/21 Market Recap: QQQ weekly Bullish Engulfing is bullish for the next 6 weeks.

ACTIVE BEARISH OUTLOOKS:

• 03/18 Market Recap: 03/16 lows will be revisited.  Failed!
• 04/21 Market Recap: SPX will close below 04/20 close soon.
• 04/27 Market Outlook: IBM down on ER and AMZN up on ER mean lower SPX price in 5 weeks.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

TREND CANDLESTICK COMMENT QQQ & Weekly UP Bearish Harami IWM & Weekly UP *ChiOsc is way too high. SSEC & Weekly UP More weakness would mean downtrend, be careful. EEM & Weekly UP Doji  XIU & Weekly DOWN May see further pullback. TLT & Weekly UP FXE & Weekly UP Spinning Top *3.1.1 US Dollar Index Bullish Fund: Volume surge, bottomed? GLD & Weekly UP *ChiOsc is a little high. GDX & Weekly UP Shooting Star USO & Weekly UP Doji  XLE & Weekly UP Hollow Red Bar XLF & Weekly DOWN Bear Flag? IYR & Weekly UP XLB & Weekly UP Doji

* = New update; Blue Text = Link to a chart in my public chart list. UP = Intermediate-term uptrend. Set when weekly buy signal is triggered. DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.