09/29/2009 Market Recap: All About the Dollar


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Summary:

No conclusion tomorrow. Chart pattern points to the downside but US$ may pullback which could lift the market.

  TREND MOMENTUM   COMMENT - Sample for using the trend table.
Long-term Up      
Intermediate Up Neutral    
Short-term Up Neutral    
SETUP DATE TRADE STOP LOSS Mechanic trading signals for reference only. Back tested since 2002.
SPX Major Swing 08/21 Buy next open 09/25 Low Win: 41%, Gain/Loss Ratio: 2.9, Ann Return/Trade: 55% yr
     
         

INTERMEDIATE-TERM: NO UPDATE

1.2.1 Dow Theory: Averages Must Confirm:

  1. BPSPX, NYA200R, NYHILO too high. There was about 10% correction in year 2004 when these 3 were this high.
  2. TRAN hasn’t confirmed the INDU’s high yet.

SHORT-TERM: US$ IS THE KEY

As mentioned in the After Bell Quick Summary, a reversal day on SPY daily chart may mean that it’ll be up huge but in most cases there were pullbacks or some consolidation then pullback. 1.0.4 S&P 500 SPDRs (SPY 15 min), chart pattern wise, could be a Head and Shoulders Top in the forming so it also argues a possible further pullback.

SPY15min

On the other hand, this time, US$ is bulls’ hope: 3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), solid black bar may mean a pullback of the US$ and 3.4.1 United States Oil Fund, LP (USO Daily), hollow red bar may mean that oil could rebound. These 2 factors are “bull friendly”.

UUPDaily USODaily

The conclusion is no conclusion. Let’s see how the market unfolds tomorrow.

INTERESTING CHARTS:

If there’s no wonder tomorrow, the it’ll be the SPX’s 7th straight up months. The chart below is all I could get from www.stockcharts.com about all the past cases when SPX was up more than 7 months in a row. Period.

SPXMonthly

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