10/29/2009 Market Recap: Real test tomorrow


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Summary:

CPCE trend line borken, so the pullback could be over.

Bears hope is the multiple resistances above while bulls may get the the next 10 days bullish cycle.

VIX ENV buy setup is triggered.

  TREND MOMENTUM EMOTION COMMENT - Sample for using the trend table.
Long-term Up   Disbelieve  
Intermediate Down Neutral  
Short-term Down *Neutral    
SPY SETUP ENTRY DATE INSTRUCTION STOP LOSS Mechanic trading signals for reference only.
Back tested since 2002.
ST Model   Stopped out with loss on 10/26
Reversal Bar     Stopped out with gain on 10/21.
NYMO Sell 10/21 S Break even

Hey, I'm merely a machine. I don't know how to take partial profit but as a human being, you should smart enough to know when to take partial profit, right?

VIX ENV   Long tomorrow if Close > Open.  

 

         

INTERMEDIATE-TERM: CPCE DIDN'T HOLD THE TREND LINE

2.8.0 SPX:CPCE, trend line broken, this probably means that the pullback was over.

CPCE 

SHORT-TERM: BEARS HOPE IS THE MULTIPLE RESISTANCES ABOVE

The bottom line, as mentioned in the After Bell Quick Summary – a real test could be in tomorrow. The huge rally today was not totally unexpected as you may not notice the chart I posted yesterday. I reposted here again. Whenever the same signals were extremely oversold, the next day was up big. Today we got exactly the same. So does this mean a big Doji tomorrow?

SPXVIXNYMO

0.0.2 SPY Short-term Trading Signals, this is the bear’s hope, multiple resistances ahead and the action today could be seen as a breakdown then back test of the broken area.

SPYShortTerm

0.0.3 SPX Intermediate-term Trading Signals, this is the bull’s hope, the 10 days down cycle is over and most likely the next 10 days will be an up cycle. Besides, seasonality favors bull too. Quote from www.sentimentrader.com:

The five-day window covering the last two days of October through the first three of November has been positive 72% of the time since 1928, averaging +1.2%.  Over the past 30 years, it was 80% positive with a return that averaged +1.9%.  Notably, the average drawdown (worst loss at any point during the five days) was -0.7% while the maximum gain averaged +3.1%.

SPXMidTerm

6.2.0a VIX Trading Signals (ENV), VIX buy setup triggered. The setup is not bad according to the back test summary posted below. Just there’s an additional condition, please find it in the trend table above.

VIXENVBuy VIXBackTest

INTERESTING CHARTS: NONE

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