*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 IS THE BEST MONTH FOR THE DOW
CYCLE ANALYSIS: CYCLE TOP AROUND 04/01, COULD PULLBACK TO AROUND 04/12
See 04/01 Market Recap, originally I thought the market could be topped around 04/01 then pullback to around 04/12. I’ll give another day or two for this cycle to work out but looks like it could be wrong AGAIN. There’s another cycle due tomorrow morning, looks like a top, see 1.0.9 SPX Cycle Watch (60 min) below.
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: SIMPLY TOO MUCH CALL BUYING
The unique thing today is that the ISEE Equities Only Index closed at 276 (meaning call to put ratio is 2.76) which is the 3rd record high. The chart below shows all the past records when ISEE Equities Only Index closed above 260 (red lines for readings above 270).
The chart below is from sentimentrader, also says the same thing, large traders call buying is almost equal to the year 2000 record high.
For the current market, I really have nothing to say other than simply piling up top signals in the table above, knowing eventually they’ll work but the question is when? So I think it’s equally dangerous for both long and short now. If you have long with lots of profits then perhaps better to set a trailing stop and let it ride the trend up, if you don’t have long or have too much short, frankly, I don’t know what the best to do now. 1.0.3 S&P 500 SPDRs (SPY 30 min), could be an Ascending Triangle breakout targeting above $119 (see table above, so far all three patterns point to SPX 1200ish).
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.