02/12/2010 Market Recap: Seasonality Not So Bull Friendly Next Week


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 8 of 9 are NEUTRAL  
BULLISH 0.0.3 SPX Intermediate-term Trading Signals: Bottom is close according CPC MA10.
1.0.3 S&P 500 SPDRs (SPY 30 min): *Ascending Triangle in the forming. Target $111.72.
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.
1.0.8 SPX Cycle Watch (Moon Phases): *Topped?
02/12 Market Recap: Seasonality is generally bearish next week.
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     *Short Tuesday if Open > Close.
Reversal Bar     *Short Tuesday if Open > Close.
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   *ChiOsc a little too high. Price volume negative divergence.
CHINA Down Double Top confirmed.
EMERGING Down
CANADA
FINANCIALS Down Could be a confirmed Head and Shoulders Top.
REITS   *Head and Shoulders Top? Target $38.64.
MATERIALS  
ENERGY Down Confirmed Double Top.
OIL  
GOLD Down
DOLLAR UP Head and Shoulders Bottom, target $24.28.  *Black bar, could pullback.
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: SEASONALITY IS NOT VERY BULL FRIENDLY THE NEXT WEEK  

As mentioned in 02/11/2010 Market Recap: Ascending Triangle or Bear Flag?, the last Friday would determine the “Bull Moon” or “Bear Moon”. So far from chart 1.0.8 SPX Cycle Watch (Moon Phases), it looks like a top.

MoonPhases 

I know, most people think the Moon as superstitious, well, let’s see some statistics about the next week.

  1. Days after the President’s Day was down 8 out of the last 10 years.
  2. OE day next Friday was down 12 out of the last 16 years.
  3. Take a look at statistics here: President's Day Trading.
  4. Take a look at statistics here: President’s Day – But Not For The Markets.

And lastly, let’s take a look at a seasonality chart form the SentimenTrader. Not so bull friendly next week either. Sure, the coming Tuesday is bullish, but I think maybe the above “1” – the day after the President’s Day was down 8 out of the last 10 years, weights more, as the last Friday was supposed to be bullish too, but when combines with the statistics about “the day before the President’s day was down 15 out of the last 18 years”, SPY was closed in red eventually.

Seasonality 

Well, what about the famous very very bullish Monday? 1.0.2 S&P 500 SPDRs (SPY 60 min), ChiOsc is way too high, this usually means at least 4 hours pullback, plus that would be the SPY’s 12th gap if we have a gap up open the next Tuesday, so be careful about possible gap fade. 

SPY60min

Take a look at the recently outperforming QQQQ, 1.1.5 PowerShares QQQ Trust (QQQQ 30 min), multiple resistances plus Bearish Rising Wedge.

QQQQ30min

Also don’t forget although the Cumulative TICK usually doesn’t pin exactly the top, but sooner or later there’ll be a pullback, so I don’t think QQQQ has much room left on the upside.

CumTICK

So to summarize, be careful about the next week. Statistics is not a sure thing to act on but it also could not be neglected. For example, at the beginning of this year, I said, statistically, starting from the 8th trading day till the end of the January, QQQQ should generally bearish. How many people actually believed this? Now you all know it’s true, isn’t it? 0.0.3 SPX Intermediate-term Trading Signals, do the comparison yourself, what is the major differences between the rebound in the past and that of now?

SPXMidTerm

The Long Term Trending Fed. Liquidity and Foreign Liquidity Inflows from StockTiming  below should enough explain why the rebound so far was different than what we used to see in the past.

 liqs

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.

 RSG

According to the entry rule, PBR found Thursday wasn’t confirmed.

 PBR

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