11/02/2009 Market Recap: Bulls got all the bottom signals, so?


Cobra's Market View Private Messaging System shows:


Summary:

Could be a substantial rebound coming. If not then things are different now, a primary wave 3 down could have started.

  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   *Short if 11/02 low was taken. Officially in downtrend.
Reversal Bar      
NYMO Sell 10/21 S *Adjust Stop Loss *10/29 High

 

VIX ENV        
         

INTERMEDIATE-TERM: COULD BE A SUBSTANTIAL REBOUND COMING

The bottom line, 6.3.2b Major Distribution Day Watch, 2 Major Distribution Days within 5 days means more correction ahead. But pay attention to the chart, the market most likely rebounded huge if there was a green day after the 2nd Major Distribution Day. And today we got that green day. So be careful bears.

MDDWatch

Besides the post Major Distribution Day pattern mentioned there’re several other reasons arguing for a possible bottom:

1.0.7 SPX Cycle Watch (Daily), as mentioned in the After Bell Quick Summary, today could be a cycle low.

SPXDailyCycle

1.1.4 Nasdaq 100 Index Intermediate-term Trading Signals, NAADV, NAUPV and NADNV all are arguing for a bottom. Besides the fact that NDX held above an important support today also feels like a bottom.

NDXMidTerm

The VIX BB pattern below is worth of attention too. On the day the whole bar was completely out of BB, the market was bottomed at least in the previous 2 times.

VIXOutOfBB

So to summarize above, the market could be bottomed, expect big rebound. If, however there’s no rebound or the rebound is weak then bulls should be careful because indeed this time is different, which may confirm some “wave” newsletters (Not only Elliott Wave International) argument that the primary wave 3 down has started. Also if the low today was broken, then my SPY ST Model will issue short signal too. This model, so far has 62% winning rate.

STModelSummary

SHORT-TERM: COULD BE MORE REBOUND

1.0.3 S&P 500 SPDRs (SPY 30 min), the SPY intraday chart from www.stockcharts.com has some problems today but still it’s clear that there’re lots of positive divergences, so more rebound is expected. Just , so far I don’t see any meaningful bottom pattern on the chart, so it’s possible there’ll be a small dip tomorrow before the real rebound kicks in.

SPY30min

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