09/18/2009 Market Recap: Bullish Percent Index Record High


Cobra's Market View Private Messaging System shows:


Summary:

Some bullish percent indexes hit record high.

Short-term may still have a little up room but a short-term top should be very close.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Up Overbought  
Short-term Up Neutral  
My Emotion Wait    

INTERMEDIATE-TERM: SOME BULLISH PERCENT INDEXES HIT RECORD HIGH

Follow up: 1.2.0 INDU Leads Market, closed above 9794 finally, good, but as mentioned in the previous report, 1.1.2 PowerShares QQQ Trust (QQQQ Weekly) is now in a heavy resistance zone. What will happen next? Let’s wait and see.

I see 2 problems for the current rally:

1. 5.0.5 S&P Sector Bullish Percent Index I (Weekly), 5.0.6 S&P Sector Bullish Percent Index II (Weekly), so many Bullish Percent Indexes are now in the record high territory.

BPI1 BPI2

2. 1.2.1 Dow Theory: Averages Must Confirm, TRAN still hasn’t confirmed the INDU’s new high. There’s a possibility that this kind of none-confirmation may hold because as shown on the bottom of the chart, BDI lags. If ship, truck and railroad are lagging, will TRAN still be able to reach a new high with airline only? Also pay attention to the SPX Bullish Percent Index on the top of the chart. What happened the last time when BPSPX was this high?

DowTheory

So the conclusion is a bigger correction is possible (Hey, no tomato, no eggs please! Absolutely no SHOES!), just I don’t know exactly when.

SHORT-TERM: COULD STILL UP A LITTLE BUT A TOP IS CLOSE

1.1.3 QQQQ Short-term Trading Signals, a black bar means a top is close. Also from 1.1.5 PowerShares QQQ Trust (QQQQ 30 min), could be an Ascending Triangle is in the forming with text book target around $43.07. (Y0u may take a look at 1.0.3 S&P 500 SPDRs (SPY 30 min) as well, a Symmetrical Triangle is formed which also means a continuation) So the conclusion is that there may still be some up room left, but a top is not far away. 8.1.5 Normalized CPCE says the same thing, not extreme enough so still could be some up room let.

QQQQShortTerm QQQQ30min NormalizedCPCE

INTERESTING CHARTS:

3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), the volume was huge on Friday. Does this mean that US$ is bottomed? I have no idea. The chart below is a visual back test for whenever UUP volume surged to a new 130 day high. See blue bars, looks to me such kind of volume surge more likely was a top. Well, I’m not implying that UUP is topped, I just want to say that volume surge is not necessarily bullish – how the market follow through actually matters.

UUPVolumeSurge

© 2013 Cobra's Market View — All Rights Reserved.