06/08/2010 Market Recap: SPY Up 1%+ While QQQQ Closed in Red


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 6 of 6 are NEUTRAL SPY ST Model is in SELL mode
GANN DAY MOON/SOLAR CYCLE & TIME FIB CONCLUSION
06/11-06/14 06/12 /06/21 07/31, 08/20-08/23 Next pivot date: 06/11-06/14.
BULLISH 0.2.1 10Y T-Bill Yield: Bottomed?
0.1.1 SPX Intermediate-term Trading Signals: CPC MA(10) too high.
8.1.1 Normalized NATV/NYTV: Bottomed?
6.3.2c Major Distribution Day Watch: Bottomed?
05/20 Market Recap: Intermediate-term Indicator Score from sentimentrader is too low.
6.3.1 Major Accumulation Day Watch: Bottomed?
05/28 Market Recap: II survey shows too many people are expecting a correction.
BEARISH 0.1.1 SPX Intermediate-term Trading Signals: Ascending Broadening Wedge? Target: 1008 to 1019.
0.2.3 NYSE McClellan Oscillator: Positive divergence missing, so one more down leg ahead?
CONCLUSION  
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM:
SSO/SDS, UPRO/SPXU
ST Model 06/04 S 1.9xATR(10) *If you don’t want to turn a winning trade into a losing one, set the stop loss to breakeven here. Officially, the model is willing to wait for tomorrow.
Reversal Bar    
NYMO Sell    
Non-Stop(RSP) 05/11 S N/A Partial profit on 05/28.
Others    
OTHER ETFs TREND *DTFMS COMMENT – *New update. Click BLUE to see chart if link is not provided.
QQQQ DOWN SELL Ascending Broadening Wedge with partial rise?
IWM DOWN SELL Ascending Broadening Wedge with partial rise?
CHINA DOWN
EMERGING DOWN SELL 4.1.6 iShares MSCI Emerging Markets (EEM Weekly): Double Top?
EUROPEAN DOWN SELL 4.1.7 Vanguard European VIPERs (VGK Weekly): Bearish 1-2-3 formation, target $35.54.
CANADA DOWN SELL
BOND UP BUY
EURO DOWN SELL Descending Triangle breakdown, target $117.21.
GOLD UP *BUY 4.3.0 Gold Trust Shares (GLD Weekly): Head and Shoulders Bottom, target $129.99.
GDX UP *BUY
OIL DOWN
ENERGY DOWN SELL
FINANCIALS DOWN SELL
REITS DOWN SELL
MATERIALS DOWN SELL *4.4.4 Materials Select Sector SPDR (XLB Weekly): Double Top? Target: $23.37.

*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. Use it as a filter, don’t trade directly.

SEASONALITY: A LITTLE BIT BEARISH BIASED THE NEXT WEEK

See 06/04 Market Recap for more details.

INTERMEDIATE-TERM: PULLBACK TARGET AROUND 1008 TO 1019, TIME TARGET AROUND 06/11 TO 06/14

See 06/04 Market Recap for more details.

SHORT-TERM: STATISTICS DO NOT AGREE THAT THE MARKET HAS BOTTOMED

Still the same old question: Has the market bottomed?

Well, it depends on what you believe. If you believe the government as well as Helicopter Ben are capable of anything (you see the true identity of the Helicopter Ben below?) then maybe, probably, possibly, we’ll see a bull market we’ve never experienced before and have an once in a life time opportunity to retire earlier.

SuperBernanke 

I don’t understand politics, so right now all I can say are since year 2000, whenever SPY rose more than 1% while QQQQ closed in red like today, short SPY at today’s close and cover 2 days later at close, there’re 85% chances that you could gain 2.84% in average.

SPYUp1PercentWhileQQQQDownSummary2Days

The chart below highlighted all the past cases when SPY rose more than 1% while QQQQ closed in red.  See for yourself what happened thereafter as I think it’s better than merely read the statistics. Well, almost all happened during the bear market, by the way.

SPYUp1PercentWhileQQQQDown2000SPYUp1PercentWhileQQQQDownNow 

The other statistics is from sentimentrader: the Nasdaq Composite Index had back-to-back Arms Index (TRINQ) readings above 3 (that’s 06/07), bought the Nasdaq Comp the next next day (that’s 06/09) then held it going forward, we would have received the following returns:

Date

1 Day

Later

1 Week

Later

2 Weeks

Later

1 Month

Later

3 Months

Later

03/13/01 -2.1% -7.8% -2.1% -5.8% 7.7%
07/09/01 -3.2% 0.1% -1.9% 0.1% -16.1%
02/20/02 -3.3% -1.3% 6.5% 5.3% -6.3%
04/24/02 0.0% -2.1% -1.0% -0.9% -24.7%
06/04/02 1.1% -5.1% -2.2% -12.5% -19.9%
06/21/02 1.3% 1.5% -2.5% -14.7% -15.3%
06/24/02 -2.5% -3.9% -5.4% -11.7% -18.9%
09/04/02 -3.2% 1.8% -3.1% -9.8% 12.1%
10/16/08 -0.4% -6.6% -1.1% -11.7% -11.0%
Average -1.4% -2.6% -1.4% -6.9% -10.2%
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