07/23/2009 Market Recap: Bond Stock Ratio Buy Signal

Summary:

A Head and Shoulders Bottom could be formed.

Bond Stock Ratio gives a long-term buy signal.

Intermediate-term still has some bearish puzzles.

	Trend	Momentum	Comments - Sample for using the trend table.
Long-term	Down		Idea for trading intermediate-term under primary down trend.
Intermediate	Up	Overbought
Short-term	Up	Overbought

The stock market had a “convincing breakout” today, which to me means without a magnifier, I can clear see a new high. The achievement:

1. 1.0.0 S&P 500 Large Cap Index (Weekly), a possible Head and Shoulders Bottom. Well, the right shoulder might be too little but if the right shoulder is “too standard” then people might say it’s too obvious to play out.

2. 7.3.0 SPX Long-term Trading Signals, the Bond Stock Ratio in the middle has triggered a buy signal and also my formal long-term signal above seems about to trigger a buy very soon.

So the conclusion is long-term looks bullish now. Well, if it really is so? I’m not sure, let’s wait for a few days before come into conclusion because on chart 0.0.3 SPX Intermediate-term Trading Signals, there’re some bearish puzzles: the NYADV and NYUPV negative divergence, the VIX:VXV sell signal and various negative divergences. As for Broading Top widely discussed, I’ve put some statistics on the chart, it doesn’t necessarily mean a top.

Short-term, I still expect a pullback. Except for the reason mentioned in After Bell Quick Summary, the Zweig Breadth Thrust from Telechart, almost historical new high now.