05/17/2010 Market Recap: Not a Reversal Day by Definition


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
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 0.1.1 SPX Intermediate-term Trading Signals: Ascending Broadening Wedge? Target: 1008 to 1019.
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 For general direction guide only.
Others      
OTHER ETFs TREND *DTFMS COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ DOWN SELL  
IWM DOWN SELL  
CHINA DOWN  
EMERGING DOWN SELL  
EUROPEAN DOWN SELL 4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.54.
CANADA ? SELL  
BOND UP    
EURO DOWN SELL  
YEN ? BUY
GOLD UP   4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99.
GDX UP SELL  
OIL DOWN SELL
ENERGY DOWN SELL
FINANCIALS DOWN SELL
REITS UP SELL  
MATERIALS DOWN SELL  

*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.
*DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals.

SEASONALITY: MONDAY AND FRIDAY ARE BULLISH

See 05/14 Market Recap for more details. 

INTERMEDIATE-TERM: NO CONCLUSION, IN WAIT AND SEE MODE

0.1.0 SPY Short-term Trading Signals, a Hammer is formed today which looks bullish. But by definition, today is not a reversal day because volume is decreased. Plus since the shadow is mostly buried by the previous day’s shadow (means not much shake out of weak hands) so it’s not as strong (reversal) as the Feb 5 Hammer. So whether the market has bottomed is still remained to be seen.

SPYShortTerm 

Another question mark is, time wise, if indeed SPX has bottomed, then by definition the pullback was ended actually on 05/06, therefore only lasted 8 trading days which is much shorter than that of June 2009 (18 trading days) and January 2010 (13 trading days). Since the pullback strength this time is much stronger than those of previous 2 pullbacks, so logically, 8 trading days sounds not long enough to me.

TradingDayWatch 

Anyway, trading wise, according to my rule, is simply – because all trend signals in the table above are still “sell”, so personally I’ll mainly focus on selling bounces.


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: DON’T RUSH INTO BULLISH CONCLUSION TOO SOON

1.0.0 S&P 500 SPDRs (SPY 60 min):

  1. As mentioned in today’s After Bell Quick Summary, could be a Diamond Bottom formed, the target is $117ish. This is just one possibility.
  2. Diamond Bottom is not an absolutely bullish pattern, there’re 31% chances it may breakdown, and if so, the target is $109ish.
  3. Considering Fib 50% and January highs serving as multiple resistances above, so SPY could pullback intraday tomorrow to form the right shoulder of a Head and Shoulders Bottom pattern before rallying further.
  4. From the chart we can see, there’re lots of multiple resistances confluences area above, so it’s actually not very easy to rally to $117ish.

So the conclusion is, again, don’t rush into bullish conclusion too soon.

SPY60min 

6.1.1b Extreme CPC Readings Watch, forgot to mention this in the After Bell Quick Summary, CPC >= 1.01, 77% chances a green day tomorrow.

CPCWatch

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