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Last Friday many charts are saying the market is due for pullback, and I am wondering if they are too perfect to be correct. Anyway, let me present all charts here and you will see whether they seem reasonable or not.
If indeed a pullback happens, the Tuesday low is the key to watch. On the following chart, 0.0.3 INDU leads the Markets, my target has not reached yet since COMPQ is not following INDU to break the March low. Note the blue circles on the chart: while the market is bottoming out, INDU always makes a higher low when SPX and COMPQ is still lower low. Therefore my prediction is that maybe the market will test the Tuesday low, and COMPQ will very likely break it and even break the March low, INDU will however hold the Tuesday low. At the time being, I am not aware of anything worse than banks' collapse which could cause the market's plummet to the Tuesday low. If next week the market drops and makes higher lows, it will be a good opportunity to buy dip.
Here is another reason of supporting COMPQ to break the Tuesday low. Note the green circles marked at the bottom of following chart, 1.0.1 S&P 500 Large Cap Index (Weekly), such heavy volumes looks like a bottom pattern. However the volumes on the next chart, 1.1.2 Nasdaq Composite (Weekly) (marked with green circles), do not look heavy enough compared with INDU chart. So it seems $COMPQ will plunge eventually. We will know whether this becomes true or not once the AAPL earning report is released after the market closes.
0.0.1 Simple SPY Trading System, another black candlestick. As I said before, this kind of black candlestick has a chance of reversal. Additionally considering overbought RSI and STO, one should close the short-term long positions.
1.1.6 PowerShares QQQ Trust (QQQQ Daily). QQQQ is not overbought, but the current pattern is a Bearish Evening Star which is fairly reliable. Therefore QQQQ will likely drop down further.
1.1.A PowerShares QQQ Trust (QQQQ 15 min). On the 15-min intraday chart, QQQQ has broken downward the Descending Triangle, which means it will go further down on Monday.
1.3.0 Russell 2000 iShares (IWM Daily). It is overbought. Just like 1.0.0, a black candlestick has a higher chance of reversal. So very possibly IWM will dip down Monday.
1.4.0 S&P/TSX Composite Index (Daily). A black candlestick also shows up in the Canada market chart. Again, it means pullback. On the 60-min intraday chart, 1.4.2 S&P/TSX Composite Index (60 min), RSI is testing the resistance which is another reason of pullback.
2.0.0 Volatility Index - NYSE (Daily). VIX is right on the support, and STO is oversold. In the past STO will reverse at the current level, furthermore RSI(14) is also on the support, so VIX will possibly head up which means the market will pull back.
3.0.3 20 Year Treasury Bond Fund iShares (TLT Daily). Bond has been plummeting for four consecutive days, and it is now extremely oversold and due for a rebound. Therefore the money will flow into the bond market and will possibly drag down the stock market.
3.1.0 US Dollar Index (Daily). In the past few days USD seemed a bit strong but now it shows a Bearish Rising Wedge. The resistance holds firmly, so USD may turn south which is bearish to the stock market.
3.4.1 United States Oil Fund, LP (USO Daily). It is oversold and due for a rebound, which is bearish for the stock market.
5.1.0 Consumer Discretionary Select Sector SPDR (XLY Daily). XLY is one of leading sectors in this rally during the past few days. Now it is overbought and closed at the Fib 38.2%, plus the Spinning Top pattern, all three factors are indicating a possibility of pullback.
5.3.0 Financials Select Sector SPDR (XLF Daily). The most important and the leading sector in the rally is now overbought. In the past the black candlestick almost always means reversal. And it closed at Fib 38.2%, at where the rebound often finishes.
As a summary, so many signals are indicating the market is due for pullback. The only two charts which support the further rally are 1.0.7 S&P 500 SPDRs (SPY 15 min) and 1.2.7 Diamonds (DIA 15 min)的Ascending Triangle. However the Ascending Triangle are dual-directional, both upside and downside breakouts are possible. Therefore my conclusion is the market is due for pullback next Monday.