05/13/2010 Market Recap: About 1-2-3 Formation Trading Setup


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 5 of 5 are NEUTRAL Non-Stop Model is in SELL mode
Short-term 1 of 1 are SELL 6 of 6 are NEUTRAL SPY ST Model is in SELL mode
ATTENTION 1.0.6 SPY Unfilled Gaps: 12 unfilled up gaps (max was 18), 2 unfilled down gaps. 
0.1.1 SPX Intermediate-term Trading Signals: Could be an Ascending Broadening Wedge in the forming.
BULLISH 0.2.1 10Y T-Bill Yield: Bottomed?
0.1.3 Nasdaq 100 Index Intermediate-term Trading Signals: NADVN too high.
0.1.1 SPX Intermediate-term Trading Signals: CPC MA(10) too high.
BEARISH
CONCLUSION  
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING VEHICLE:
SSO/SDS, UPRO/SPXU, RSP
ST Model 05/06 S 1.9xATR(10)
Reversal Bar    
NYMO Sell    
Non-Stop 05/11 S N/A
OTHER ETFs TREND TRADE COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ DOWN    
IWM DOWN    
CHINA DOWN   *2 big green bars in a row usually means rebound more.
EMERGING DOWN    
EUROPEAN DOWN   4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.54.
CANADA ?  
BOND UP   *0.2.1 10Y T-Bill Yield, 4 reversal bars rejected at resistance so yield could pullback while bond could rebound.
*ChiOsc is way too low.
EURO DOWN   4.2.1 Currency Shares Euro Trust (FXE Weekly): Testing major support. Also too low below MA(200) now.
*ChiOsc is way too low.
YEN ?  
GOLD UP   4.3.0 streetTRACKS Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99.
ChiOsc is way too high.
OIL DOWN
ENERGY DOWN  
FINANCIALS DOWN  
REITS UP  
MATERIALS DOWN    

*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: NO UPDATE

SPX TIME AND TARGET ANALYSIS: THE PULLBACK COULD LAST TO 05/23

See 05/10 Market Recap for more details.

INTERMEDIATE-TERM: 05/06 LOW WILL BE BROKEN BUT NO EVIDENCE SAYS THIS IS A START OF A NEW BEAR MARKET

See 05/07 Market Recap for more details.

WARNING: If you don’t understand the true meaning of overbought/oversold, please skip the session below. Generally, you should try your best not to trade against the trend. Trading purely based on overbought/oversold while against the trend is lethal to the health of your account. Before going further, please make sure you understand how to use the table above.
SHORT-TERM: PAY ATTENTION TO 1-2-3 FORMATION SETUP

The drop today may mean nothing, the market direction is still not clear, although still temporarily maintain the forecast for expecting a 2nd leg down to test 05/06 low.

0.2.0 Volatility Index (Daily), VIX chart is a little bit ugly because Hammer has 60% chances of leading to a bullish reversal which is not good for the broad market. It needs a confirmation tomorrow though.

VIXDaily 

0.2.1 10Y T-Bill Yield, some people may disagree, but to me, this chart doesn’t look good as 4 reversal bars were formed under an important resistance. If yield pullback so will the broad market. Don’t neglect the yield, from my experiences, the yield always leads the market.

TNXDaily 

Take a look at the chart below if interested, because I often mention 1-2-3 formation, so I’d like to take this chance to tell you a little about the typical trading setup for this pattern. However, by no means, I imply that you should short, just I really don’t have anything else to say today.

1-2-3TTE 

Now take a look at 0.1.0 SPY Short-term Trading Signals, should conform the 1-2-3 formation sell setup, so break down below today’s low is a short, well, again, theoretically.

SPYShortTerm

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