12/23/2009 Market Recap: 41% Indicators at Bullish Extremes


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Summary:

Expect a short-term pullback soon.

  TREND MOMENTUM EMOTION COMMENTSample for using the trend table.
Long-term Up   Disbelieve  
Intermediate *Up Neutral  
Short-term Up Neutral    
SPY SETUP ENTRY DATE INSTRUCTION STOP LOSS Mechanic trading signals for reference only.
Back tested since 2002.
ST Model 12/21 L

 

Breakeven
Reversal Bar 12/21 L

 

Breakeven

 

NYMO Sell  

 

VIX ENV        
         

INTERMEDIATE-TERM: BULLISH SEASONALITY BUT MARKET MAY NOT UP HUGE

Nothing new, very bullish seasonality, see12/18/2009 Market Recap, but since the Options Speculation Index is way too bullish so I doubt how high the market could go.

Forgot to mention the chart below yesterday, anyway, a clear Broadening Top breakout on the upside, very good, the text book target is at galaxy far far away, the only problem is that the SPX is not confirming plus the holiday thin volume, therefore need further confirmation after the holiday.

BroadeningTop

 

SHORT-TERM: COULD BE A PULLBACK SOON

In short-term, lots of pullback signs are piling up, so be careful.

Among all the indicators in www.sentimentrader.com, today 41% of them are at bullish extremes. The last time I mentioned this was in 12/14/2009 Market Recap when it had 29% indicators at bullish extremes, the market pulled back immediately.

 IndicatorAtExtremes

1.0.4 S&P 500 SPDRs (SPY 15 min), Bearish Rising Wedge plus lots of negative divergences. If the market makes a new high tomorrow but again is unable to up huge then this chart will look even more bearish.

 SPY15min

As mentioned in today’s After Bell Quick Summary, 6.1.9 Extreme ISEE Index Readings Watch and 6.2.4b SPX and VIX Divergence Watch are sounding alarm, plus 0.0.9 Extreme Put Call Ratio Watch mentioned yesterday and the day before, all put together, I think the chances are very good we’ll see a pullback soon, maybe not even need wait after the new year.

INTERESTING CHARTS:

The following 2 chars are for fun only, I don’t believe they’re significant.

2.0.0 Volatility Index (Daily), it looks a lot like what happened before the Dubai drama.

VIXDaily

6.4.5 GLD and UUP Watch, GLD black bar means UUP up or at least gap up open tomorrow. The chart was surprisingly accurate. Let’s see if it works again tomorrow.

GLDUUPWatch

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