05/24/2010 Market Recap: Beware of a possible VIX weekly STO sell signal


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 4 of 5 are NEUTRAL Non-Stop Model is in SELL mode
Short-term 1 of 1 are SELL 4 of 6 are OVERSOLD SPY ST Model is in SELL mode
BULLISH 0.2.1 10Y T-Bill Yield: Bottomed?
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?
0.2.0 Volatility Index (Daily): More than 20% above MA(10)
6.3.2c Major Distribution Day Watch: Bottomed?
T2116 new high.
05/20 Market Recap: Intermediate-term Indicator Score from sentimentrader is too low.
BEARISH 0.1.1 SPX Intermediate-term Trading Signals: Ascending Broadening Wedge? Target: 1008 to 1019.
6.4.1 Extreme NYADV Readings Watch: Lower close ahead.
0.2.3 NYSE McClellan Oscillator: Lower low ahead.
0.2.6 NYSE - Issues Advancing: Lower low ahead.
0.2.2 Extreme Put Call Ratio Watch: Extremely high CPCI means top?
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
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    
IWM DOWN    
CHINA DOWN BUY *2 green bar in a row usually means more on the upside.
EMERGING DOWN   Bearish 1-2-3 formation breakdown, target: $32.13
EUROPEAN DOWN   4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.54.
CANADA DOWN  
BOND UP SELL
EURO DOWN   *ChiOsc is a little bit too high.
YEN UP  
GOLD UP   4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99.
*Morning Star? So more rebound?
GDX UP  
OIL DOWN  
ENERGY DOWN   *Bearish 1-2-3 formation, target: $46.47
FINANCIALS DOWN   Bearish 1-2-3 formation, target: $12.99
REITS DOWN   Head and Shoulders Top? Target: $44.28
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.
*DTFMS = Dual Time Frame Momentum Strategy. The signal is given when both weekly and daily STO have the same buy/sell signals.

SEASONALITY: THE LAST TRADING WEEK OF MONTH WAS BEARISH SINCE AUG 2009
 

See 05/21 Market Recap for more details.

INTERMEDIATE-TERM: PULLBACK TARGET AROUND 1008 TO 1019, NEXT TIME WINDOW AROUND 06/06

See 05/21 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: NEED SEE TOMORROW, BULLS STILL HAVE CHANCES

The drop today simply conformed the past pattern, so has fulfilled the very short-term forecast in 05/21 Market Recap: May not see very bullish Monday, need wait until Tuesday.

Why I said that today’s drop simply conformed the past pattern?

0.1.0 SPY Short-term Trading Signals, today is very similar to what happened on 02/08 – the 02/05 Friday bullish reversal followed by 02/08 red Monday and the market skyrocketed higher thereafter. Now we had a bullish reversal the last Friday, then a red Monday today, so if we see a green day tomorrow, then at least there’s a chance that the market may repeat what had happened after 02/08.

SPYShortTerm

I’ve mentioned the chart below in 05/21 Market Recap. Now take a closer look again, if a Major Distribution Day (NYSE Down Volume to NYSE Up Volume > 9) was followed immediately by a Major Accumulation Day (NYSE Up Volume to NYSE Down Volume Ratio > 9), then no exception, the day after the Major Accumulation was always a red day. So again today’s drop simply conformed the past pattern. We have to wait until tomorrow to see in which direction the market will go – keep dropping or resuming the rebound.

MADRightAfterMDD

I guess some bears may not understand why I’m so cautious, since SPY ST Model and Non-Stop Model are in SELL mode and apparently it’s not very easy for them to switch back to BUY mode in a day or two. Well, take a look at 4.1.3 Volatility Index (Weekly), sure, today is not Friday so officially the STO sell signal hasn’t confirmed yet, but once it’s confirmed, see dashed red lines, it even predicted well the rebound in the 2008 Oct crash. So beware.

VIXWeekly

As for tomorrow, despite the usual very red AH, so far I can see that bulls still have chances:

  1. As mentioned in today’s After Bell Quick Summary, when both VIX and SPX closed in red, there’re 77% chances a green day tomorrow. This trick is very reliable.
  2. 1.0.1 S&P 500 SPDRs (SPY 15 min), could be a kiss channel goodbye, so again bulls may have chances tomorrow.

SPY15min

© 2013 Cobra's Market View — All Rights Reserved.