02/11/2010 Market Recap: Ascending Triangle or Bear Flag?


Cobra's Market View Private Messaging System shows:


  TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart)
Long-term 3 of 3 are BUY    
Intermediate 3 of 3 are SELL 6 of 6 are NEUTRAL SPY ST Model is in SELL mode
Short-term 1 of 1 are BUY 9 of 9 are NEUTRAL  
BULLISH 6.3.2c Major Distribution Day Watch: Bottom is close?
0.0.9 Extreme Put Call Ratio Watch: Bottom is close?
0.0.3 SPX Intermediate-term Trading Signals: *Bottom is close according CPC MA10.
BEARISH 6.3.0 Major Accumulation/Distribution Days: Another Major Distribution Day ahead?
6.4.A SPY Bottom Shape: Could be another leg down to test the low.
CONCLUSION
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU
ST Model     *Stopped out short position flat.
Reversal Bar      
NYMO Sell      
VIX MA ENV      
OTHER ETFs TREND COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ   Black bar, so a top is close?
IWM    
CHINA Down Double Top confirmed.
EMERGING Down
CANADA
FINANCIALS Down Could be a confirmed Head and Shoulders Top.
REITS   Measured Move, target $41.54.
MATERIALS  
ENERGY Down Confirmed Double Top.
OIL  
GOLD Down
DOLLAR UP Head and Shoulders Bottom, target $24.28.
BOND *Down

INTERMEDIATE-TERM: INITIAL PULLBACK TARGET MET BUT COULD BE MORE

No update, see 02/05/2010 Market Recap, Fib 38.2% retracement target was met, but I suspect there’s more. There’s a chance that after the pullback is over, we’ll see a new high followed by a bigger pullback thereafter.

SHORT-TERM: EXPECT A SHORT-TERM PULLBACK SOON  

In 02/09/2010 Market Recap: A Few Bullish Signs, I mentioned 2 possible market routines:

  1. Test the last Friday’s low first before any meaningful rebound. In this case, the rebound could either be a short-term or an intermediate-term.
  2. Rebound directly (without testing the low), if so then according to 6.4.A SPY Bottom Shape, since it’s not easy to stand on just one leg, so most likely the market will drop later to test the last Friday’s low, therefore it could just be a short-term rebound.

Now apparently the 2nd routine was selected by the market, so I maintain the view for calling this is only a short-term rebound. As mentioned in today’s After Bell Quick Summary, according to the Ascending Triangle formed in chart 1.0.3 S&P 500 SPDRs (SPY 30 min), the text book target could be to fill the 01/22 gap.

SPY30min 

However, for 2 reasons, I don’t think the rebound could go that far:

1. It’s a little bit arguable whether it is an Ascending Triangle or not, as from chart 0.0.2 SPY Short-term Trading Signals, it also looks like a Bear Flag.

SPYShortTerm 

2. 1.0.8 SPX Cycle Watch (Moon Phases), the Moon said, turning point either tomorrow or the next Tuesday (Monday is closed due to President Day holiday), so as long as today’s low holds, chances are high the top is in either today or tomorrow. In other word, if indeed the moon phases work again this time, then SPX up tomorrow means it will go down the next week, so this gives the Ascending Triangle only one trading day to pursue its target which is 37 points away which in normal cases should be very difficult to achieve.

MoonPhases

As mentioned in today’s After Bell Quick Summary, statistically, the market has good chances to close in red tomorrow. Here’s another evidence, Intraday Cumulative TICK from www.sentimentrader.com closed too high which at least means that there’s not much up room left for QQQQ.

CumTICK 

STOCK SCREENER:  For fun only, I may not actually trade the screeners. Since SPY ST Model is in SELL mode, only SHORT candidates are listed. For back test details as well as how to confirm the entry and set stop loss please read HERE. Please make sure you understand the basic risk management HERE.

Today’s screener has 1 stock found.

PBR

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