03/31/2010 Market Recap: A Bigger Symmetrical Triangle


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): 15 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.
*0.0.9 Extreme Put Call Ratio Watch: CPCE MA(5) too low.
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 03/22 low
Reversal Bar  
NYMO Sell 03/25 S 03/25 high
Non-Stop     Newly added setup, will 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 *2 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 Symmetrical Triangle breakout. Expect more on the upside.
EMERGING ? 2 of 2 BUY  
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 *1 of 2 SELL
DOLLAR UP 2 of 2 BUY Head and Shoulders Bottom, target $24.28.
*Hollow red bar, may rebound.
*6.4.5 GLD and UUP Watch: GLD black bar usually mean UUP rebound the next day.
GOLD DOWN 2 of 2 SELL *Black bar, could pullback.
GDX DOWN 2 of 2 SELL Small Double Top, target $41.52.
*Black bar, could pullback.
OIL ? 1 of 2 SELL *Black bar, could pullback.
ENERGY ? 2 of 3 SELL
FINANCIALS UP 2 of 3 BUY
REITS UP *2 of 2 SELL False breakout on narrow range so the real breakout could be on the downside.
MATERIALS ? 2 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: APRIL THE 1ST IS VERY BULLISH

In today’s After Bell Quick Summary, I mentioned a double bullish seasonality effects for tomorrow (The 1st trading day of a month and the pre-holiday effect), below are some statistics.

According to the Stock Trader’s Almanac:

  1. The first trading day in April, Dow up 12 of last 15, 2008 +3.2%, 2009 +2.0%.
  2. NASDAQ up 13 of 15 day before Good Friday, 9 straight since 2001.
  3. Day after Easter, S&P down 16 of 20 from 1984 to 2003, but improving recently, up 5 of last 6.

The Performance Surrounding Good Friday chart below is from sentimentrader.

holiday_good_friday

 

CYCLE ANALYSIS: TODAY OR TOMORROW COULD BE A CYCLE TOP, PULLBACK NEXT WEEK UNTIL AROUND 04/12

1.0.7 SPX Cycle Watch (Daily), there’re 2 cycle due today and tomorrow, both look like a cycle top. From my observations, when multiple cycles are due together, they’re usually very effective. Plus as mentioned in the yesterday’s report, in chart 4.1.0 S&P 500 Large Cap Index (Weekly), BPSPX is way too overbought which means most likely a red week the next week, which also fits well with the important turning points around 04/12 to 04/15 as mentioned in 03/26 Market Recap. So the conclusion is: Today or tomorrow could be the cycle top, pullback next week until around 04/12.

SPXDailyCycle 

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: A SYMMETRICAL TRIANGLE MEANS ONE MORE PUSH UP?

1.0.3 S&P 500 SPDRs (SPY 30 min), a bigger Symmetrical Triangle is formed today which according to the Elliott Wave Theory (plus as mentioned above a very bullish seasonality tomorrow), there could be one more push up tomorrow. I’m not very sure though, because oil and gold formed a black bar and dollar formed a hollow red bar (see table above) today, especially the black bar on GLD daily chart which according to the chart 6.4.5 GLD and UUP Watch, most likely means that dollar will rebound tomorrow. So how bullish could be tomorrow, I’m a little skeptical,

SPY30min 

6.4.0 SPX and NYMO Divergence Watch, a new high tomorrow (since seasonality is very very bullish) will likely trigger the stop loss of the current NYMO Sell short position. However, because the NYMO below is now deep in the negative territory so if any day the next week SPY Open > Close, the NYMO Sell setup will likely be triggered again, therefore, trading wise, decide by yourself, either make the current stop loss a little bit larger, or follow the rule, let the stop loss work and re-enter the position if NYMO Sell setup is triggered again the next week.

NYMOSell 

0.0.9 Extreme Put Call Ratio Watch, just take a look, CPCE closed extremely low again today which triggered the CPCE MA(5) top signal. As usual, I put this into the table above. If you still don’t know how to use the table above, please take a look at  how to use the table above (LOL).

ExtremePutCallRatioWatch 

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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