*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 LATER HALF OF THE WEEK IS GENERALL BULLISH
According to the Stock Trader’s Almanac:
- 04/15 income tax deadline, Dow down only 5 times since 1981.
- April expiration day, Dow up 11 of last 13.
CYCLE ANALYSIS: CYCLE TOP COULD BE AROUND 04/11 TO 04/15
See 04/08 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: A STRONG EARNINGS OFF-SEASON USUALLY MEANS A WEAKER EARNINGS SEASON
See 04/09 Market Recap, the statistics about the Earnings Season plus the cycle analysis and plus too many bearish extremes accumulated in the table above, so my guess is that we’ll see typical sell on news in the coming earnings season.
There’re 3 very unique things today:
All above are topping signals, plus all the bearish extremes in the table above the market simply has too many top signals. I have no idea when those top signals will strike back but for sure there’ll be a payback time, so be careful here.
6.2.5b VIX Body Completely Out Of BB Watch, VIX opened and closed below BB bottom usually means a top, especially for VXN (VIX for Nasdaq). Take a look at what happened in the following date below if interested.
- Date when VXN opened and closed out of BB bottom: 04/12/2010, 06/29/2009, 05/16/2008, 02/17/2006, 09/22/2003.
- Date when VIX opened and closed out of BB bottom: 04/12/2010, 01/11/2010, 04/09/2009, 08/18/2006, 08/16/2006, 09/12/2005, 04/12/2005, 04/11/2005.
8.1.5 Normalized CPCE, new record low, see red vertical line, extremely low reading also means a top. (The so called “normalized” is to use the spread between MA(10) and MA(200) instead of using the absolute value so as to eliminate the bias the equity put/call ratio exhibits depending on what type of market we are in, therefore the effectiveness is better than simply using CPCE MA(5) and MA(10)).
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.