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P.S. No After Bell Quick Summary today as I really don’t have much to say other than wait for tomorrow.
SHORT-TERM: REVERSAL OF REVERSAL IS COMMON ON A MARKET TOP, SO LET’S SEE TOMORROW
The rebound today may mean nothing because it’s common to see a reversal of the previous reversal of the previous reversal whenever the market is in a topping process. So whether we’ll see a reversal of reversal of reversal tomorrow, we’ll have to wait. At least in the SPY 60 min chart below I cannot exclude the possibility of a typical bearish Rising Wedge breakdown then kiss channel goodbye pattern. So again, let’s see tomorrow.
Also the statistics about extreme low TICK reading almost guarantees an immediate lower low or lower close ahead still applies today. See chart below, relative to yesterday’s chart, I now keep only the 2nd day rebound cases, still there’re far more red dashed lines than green dashed lines. In another word, a huge rebound the next day after an extreme low TICK reading like today was normal.
The chart below is just to follow up the back to back unfilled gap I mentioned yesterday. The gap didn’t get filled completely today so if there’s a gap down open tomorrow, bears better not hope that gap could hold. Well, I guess no bear expects any bear gap could hold anyway. LOL
INTERMEDIATE-TERM: BEARISH BIASED, PIVOT DATE EITHER AROUND 10/22 OR 10/26 OR 11/04
Maintain the intermediate-term bearish view, the pivot date could be either around 10/22 or 10/26 or 11/04, see 10/15 Market Recap for more details. Below are summaries of all the arguments supporting my intermediate-term bearish view:
- As mentioned in 10/15 Market Recap, commercial (smart money) holds record high short positions against Nasdaq 100.
- As mentioned in 10/15 Market Recap, AAII bull ratio (4-week average) is way too bullish.
- As mentioned in 10/15 Market Recap, institution selling keeps increasing.
- As mentioned in 10/08 Market Recap, statistically, a strong off-season could mean a weaker earning season.
- As mentioned in 10/11 Market Recap, statistically VIX at 1 month low going into October was not a good sign.
- As mentioned in 10/15 Market Recap, US$ may rebound which is not good for the broad market.
- As mentioned in 10/19 Market Recap, IBM dropped after ER may mean SPX red in 5 weeks.
- As mentioned in 10/19 Market Recap, AAPI MACD is now too stretched which could mean a top for QQQQ.
SEASONALITY: NO UPDATE
For October Seasonality chart please refer to 10/01 Market Recap.
HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
- The market appears a little stretched as lots of ETFs weekly %B are way too high.
- With possible Euro pullback, watch potential weakness on commodity related ETFs like XLE, XLB and XIU.TO.
|NDX Weekly||NDX to SPX ratio too high. %B too high. Neither had any edges though.|
|IWM Weekly||%B too high.|
|CHINA||Rejected by downtrend line, watch…|
|CHINA Weekly||Extremely high %B.|
|EEM Weekly||EEM to SPX ratio too high, %B too high. Neither had any edges though.|
|XIU.TO||*LA||TOADV MA(10) too high.|
|XIU.TO Weekly||Fib 61.8% plus %B too high with negative divergence.|
|TLT||UP||1-2-3 trend change? So TLT could be in an intermediate-term downtrend. Be careful.|
|FXE Weekly||Stalled at Fib confluences area, %B too high with negative divergence, too high above MA(40).|
|GLD Weekly||%B too high.|
|GDX||DOWN||On support, BPGDM sell signal though.|
|GDX Weekly||GDX to SPX ratio too high, %B too high with negative divergence.|
|XLE Weekly||%B too high with negative divergence.|
|XLF Weekly||Head and Shoulders Top in the forming?|
|IYR Weekly||Home builders are lagging.|
|XLB Weekly||%B too high with negative divergence.|
- Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.
- Position reported in short-term session of the table above is for short-term model only, I may or may not hold other positions which will not be disclosed.
- Conclusions can be confirmed endlessly, but trading wise, you have to take actions at certain risk level as soon as you feel the confirmation is enough. There’s no way for me to adapt to different risk levels therefore offer no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
- * = New update; Blue Text = Link to a chart in my public chart list; UP/DOWN = Short-term trend; L A = Lateral Trend