05/19/2010 Market Recap: Bottomed?


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 3 of 6 are OVERSOLD 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.
0.2.3 NYSE McClellan Oscillator: Oversold.
*0.2.2 Extreme Put Call Ratio Watch: CPC MA(5) too high.
*0.2.6 NYSE - Issues Advancing: Oversold.
*8.1.1 Normalized NATV/NYTV: Bottomed?
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 *Breakeven *Adjust stop loss.
Reversal Bar    
NYMO Sell    
Non-Stop 05/11 S N/A For general direction guide only.
Others 05/18 L
*05/19 L
Info only Long at close as 2 days cumulative RSI(2) <= 35. Winning rate: 88%
Long at close as 3 days cumulative RSI(2) <= 45. Winning rate: 79%
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 SELL
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    
YEN ? BUY
GOLD UP   4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99.
GDX UP SELL  
OIL DOWN  
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: MINIMUM PULLBACK TIME TARGET COULD BE REACHED

Bottomed? Well, I don’t know. From both time and trading signals aspect, at least short-term is bull friendly. However, trading wise, at the current stage, buy dip should be for aggressive traders only, while the safest way is still to sell bounce because both SPY ST Model and Non-Stop Model are in sell mode.

Start with the time first. In 05/07 Market Recap, I mentioned 3 reasons for expecting the pullback to last to 05/23.

  1. Multiple Gann Days due from 05/19 to 05/22.
  2. 05/21 is an important solar term date.
  3. Minimum pullback time could last 13 to 18 trading days.

Today is 05/19 which is within the Gann Days range so starting from today, any day thereafter, could be a bottom day. Trading day wise, today is the 17th trading day which also is within the 13 to 18 trading days range.

TradingDays 

Now the signal part, see table above, more bull friendly signals are added.

0.2.2 Extreme Put Call Ratio Watch, see dashed green lines, when CPCI, CPCE and CPC all are at an extreme high level, the market could be bottomed (Well, I know, the cases are too few).

ExtremePCWatch

8.1.1 Normalized NATV/NYTV, see vertical green lines, Nasdaq volume is far less than NYSE volume means fear as people are trying to avoid high beta stocks, therefore it could mean a bottom.

NormalizedNYATvsNYTV

0.2.3 NYSE McClellan Oscillator, NYMO oversold is very reliable. 

NYMO

0.2.6 NYSE - Issues Advancing, NYADV oversold also is very reliable. There’s a little hope for bears though, but NYADV positive divergence before the market bottom is not always the case, so better bears don’t rely too much on this signal.

NYADV

I mentioned the TradingMarkets 2 day cumulative RSI(2) strategy in 05/18 Market Recap, I said if today, the MA(200) could hold the test and the 2 day cumulative RSI(2) buy be triggered again, then at least statistically, chances are very good that we may see at least a short-term rebound very soon.

CumulativeRSI2Buy

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: NO UPDATE

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