08/13/2009 Market Recap: Nasdaq/NYSE volume spike again

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Could be a down day tomorrow.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Up Neutral  
Short-term Up Neutral  
My Emotion No idea   Neither believe this bull nor want to be a hero to short against it.

I saw quite a few reasons arguing for a red close tomorrow although I’m not sure if the market would go to a new high first before attempting a pullback.

2.8.0 SPX:CPCE, CPCE < 0.56, counting the dashed vertical lines, very likely a red close tomorrow.


2.3.3 NYSE Total Volume, too low, which usually means a top. Take a look at the red dashed vertical lines, what happened the next day and thereafter?


2.3.4 Nasdaq Total Volume/NYSE Total Volume, this is a record high, look at the red dashed vertical lines as well, what happened the next day and thereafter?


Also the 2 comprehensive indicators from www.sentimentrader.com mentioned in yesterday’s report are still at an extreme level:

Smart Monday / Dumb Money Confidence, dumb money confidence too high.


Indicators at Extremes, which combines all the indicators on www.sentimentrader.com, the spread between the total number of bullish signals and the total number of bearish signals are still very large.


3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), hollow red bar usually leads to a reversal, so US$ could rebound tomorrow which might cause the stock market to pullback.


In addition I’d like to bring your attentions for the following 2 charts. They probably mean that the uptrend is weakening. I’ll keep watching on them and report to you anything suspicious. 

7.1.0 Use n vs n Rule to Identify a Trend Change, the very first time, bears won unless bulls could push above SPX 1018 tomorrow. This of course doesn’t mean a top which usually requires several “n vs n”. Take a look at chart 8.0.3 Use n vs n Rule to Identify a Trend Change 2008 for the past examples then you will understand what I mean for several “n vs n” to form a top.


7.7.9 Russell 3000 Dominant Price-Volume Relationships, neither of the most recent huge up day was confirmed by a bullish price-volume relationships and there wasn’t a follow-through the next day either, so need to watch carefully, they may imply a little bit bigger pullback ahead.


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