03/29/2010 Market Recap: Sell Each Month’s Last 2 Trading Days?


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 BUY 4 of 6 are NEUTRAL SPY ST Model is in BUY mode
Short-term 1 of 1 are BUY 6 of 6 are NEUTRAL  
ATTENTION 2.4.4 NYSE McClellan Oscillator: Negative divergence.
BULLISH 4.1.0 S&P 500 Large Cap Index (Weekly): Head and Shoulders Bottom, target 1246
1.0.2 S&P 500 SPDRs (SPY 60 min)
: Head and Shoulders Bottom, target 119.42.
BEARISH 1.0.2 S&P 500 SPDRs (SPY 60 min): *16 unfilled gaps. (max was 16)
1.1.0 Nasdaq Composite (Daily): 9 unfilled gaps. (max was 10)
0.0.3 SPX Intermediate-term Trading Signals: CPCE MA(10) too low.
4.0.4 Dow Theory: Averages Must Confirm: NYHILO too high.
1.1.0 Nasdaq Composite (Daily): NDXA50R is way too high.
03/25 Market Recap: Smart/dumb confidence spread is too large.
4.1.0 S&P 500 Large Cap Index (Weekly): BPSPX too high.
CONCLUSION Bearish signals are accumulated enough to justify a short sell. For aggressive traders only.
03/25, another Bearish Engulfing and the NYMO Sell setup was triggered.
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU
ST Model 02/26 L *03/16 low *Adjust stop loss.
Reversal Bar  
NYMO Sell 03/25 S 03/25 high
Non-Stop     *Newly added setup as requested, suitable for investors, no stop loss, simply long or short. Better use RSP (equal weighted SPX ETF) for an average annual return around 15.4% since 2004. Will start to give signal on this setup the next time it’s triggered.
OTHER ETFs MID TERM INDICATOR COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ UP 3 of 3 BUY 6.4.6 QQQQ Black Bar Watch: doesn’t look good.
4.1.1 Nasdaq 100 Index (Weekly): BPNDX too high.
IWM UP 2 of 2 SELL
CHINA *UP 1 of 1 BUY *4.1.4 Shanghai Stock Exchange Composite Index (Weekly): Symmetrical Triangle, breakout on the upside!
EMERGING ? 2 of 2 SELL *Breakout Roof formation on the upside, may change the intermediate-term status if further up.
CANADA UP 2 of 3 SELL 4.1.5 iShares CDN S&P/TSX 60 Index Fund (XIU.TO Weekly): 3 Doji under important resistance. Lots of negative divergence plus BPTSX is too high. Expect pullback.
BOND DOWN 2 of 2 SELL Symmetrical Triangle breakdown. Expect more pullbacks ahead.
DOLLAR UP 2 of 2 BUY Head and Shoulders Bottom, target $24.28.
3.1.1 PowerShares DB US Dollar Index Bullish Fund (UUP 30 min): Could be Head and Shoulders Top, target $23.74.
*6.4.5 GLD and UUP Watch: GLD black bar most likely means UUP rebound tomorrow.
GOLD DOWN 2 of 2 SELL
GDX DOWN 2 of 2 SELL Small Double Top, target $41.52.
OIL ? 1 of 2 SELL *Breakout Roof formation on the upside, may change the intermediate-term status if further up.
ENERGY ? 3 of 3 SELL
FINANCIALS UP 2 of 3 BUY *3 black bars, expect a pullback.
4.4.2 Financials Select Sector SPDR (XLF Weekly): Fib confluences area is at $16.76 - $16.97, could be the intermediate-term target.
REITS UP 2 of 2 BUY False breakout on narrow range so the real breakout could be on the downside.
MATERIALS ? 1 of 3 BUY 4.4.4 Materials Select Sector SPDR (XLB Weekly): BPMATE too high.

*Please make sure you understand how to use the table above. The main purpose of this report is to provide information so contradictory signals are always presented.

SEASONALITY: THE LAST 3 TRADING DAYS OF MARCH ARE BEARISH WHILE APRIL 1ST IS VERY BULLISH

CYCLE ANALYSIS: EXPECT A DOJI THIS WEEK, MAY PULLBACK NEXT WEEK UNTIL 04/12

See 03/26 Market Recap for more details.

INTERMEDIATE-TERM: EXPECT ROLLER COASTER AHEAD

Nothing new, according to the II Survey, too many people expected a correction, so the stock market should rise to a new high first before actually pulling back. Basically, my guess is that we’ll repeat the year 2004 roller coaster pattern. See 03/19 Market Recap for more details.

SHORT-TERM: SELL SHORT AT TODAY’S CLOSE WERE ALL WINNING TRADES IN THE LAST 7 MONTHS

Nothing to say today, maintain the forecast for pullback to 04/01 then rebound on 04/01, the weekly bar could be a small body bar or Doji, the real pullback could be the next week.

6.5.2b Month Day Seasonality Watch, someone complains about seasonality no longer works anymore, well, maybe I didn’t make it clear in the weekend report, green day today is actually normal (see green arrows), the setup actually means to sell short at today’s close, for the past 7 months, they were all winning trades. I’m not sure if this time it works or not, let’s see tomorrow.

MonthDaySeasonality 

The chart below is from stocktiming, institution sellings are increasing recently. Info only, it doesn’t mean anything significant for now though.

algo 

STOCK SCREENER:  For fun only, I may not actually trade the screeners. Since SPY ST Model is in BUY mode, only LONG 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.

Looks like it’s too late to long stocks now as the market is way too overbought. Waiting for a better chance.

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