10/27/2010 Market Recap: More Rebound?


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 3 of 3 are BUY 3 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term Model is BUY 6 of 6 are NEUTRAL The trend is up, I hold partial trapped short overnight.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
10/26 10/22 : 10/23 Next pivot date: 10/21 – 10/22, 10/25 – 10/27, 11/04
BULLISH 0.1.1 SPX Intermediate-term Trading Signals: Head and Shoulders Bottom breakout, target 1242.
09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
10/01 Market Recap: Positive September plus mid-term election means 11%+ up to year end.
10/05 Market Recap: 16 more trading days upswing?
10/26 Market Recap: Average 2.7% gain during the 8 trading days surrounding midterm election.
BEARISH 1.0.6 SPY Unfilled Gaps: 20 unfilled gaps, the max was 21.
10/15 Market Recap: AAII bull ratio (4-week average) too bullish.
10/15 Market Recap: Commercial (smart money) short Nasdaq 100 heavily according to COT Report.
10/08 Market Recap: Up off-season usually means down earning season.
10/22 Market Recap: Institutions are selling into strength.
10/19 Market Recap: AAPL is way too stretched.
10/15 Market Recap: Euro may retreat which may cause US$ carry trade unwind.
6.4.2c Extreme TICK Readings Watch: TICK too low, lower low or lower close ahead? Failed!
0.0.2 Combined Intermediate-term Trading Signals: CPCE trend line breakout, topped? No confirmed!
6.4.0 SPX and NYMO Divergence Watch: New high on negative NYMO readings, topped?
4.1.0 S&P 500 Large Cap Index (Weekly): NYSI STO(5,3,3) sell signal.
*6.1.9b Extreme ISEE Index Readings Watch: ISEE Indices & ETFs Only Index <= 30, top close?
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM:
SSO/SDS, UPRO/SPXU
Non-Stop 09/07 L N/A Partial profits on 09/24.
ST Model 09/24 L 10/19 Low

SHORT-TERM: COULD SEE MORE REBOUND STARTING AS EARLY AS TOMORROW

We could see more rebound starting from as early as tomorrow, the reason is the VIX black bar looks toppy, so VIX could pullback, which means more rebound on the stock market. If the rebound could close above or the high decisively high above SPX 10/25 high then bears still have no hope, otherwise, if the rebound failed in the middle, especially breakdown below today’s low then bears may finally see some lights on the other side of the tunnel. So, let’s see how the market rebound first.

VIXDaily

 

Overall, still think the market won’t go much on the upside. There’re lots of reasons mentioned in the intermediate-term session below, and today we have yet another bad sign – ISEE Indices & ETFs Only Index <= 30, see chart below, looks toppy whenever this happened.

ISEEWatch 

I showed the chart below yesterday, however ISE adjusted the ISEE Indices & ETFs Only Index reading from 24 to 40 today, so the bad sign mentioned yesterday is no longer valid. However, today’s ISEE Indices & ETFs Only Index is very low, so the ISEE Equities Only Index to ISEE Indices & ETFs Only Index ratio spikes again, see highlighted in red, still looks toppy. The chart below is basically the same thing as the chart above about ISEE Indices & ETFs Only Index <= 30. The reason I mention it here is to follow up what I said yesterday.

ISEEIndicesOnlyIndexToISEEEquitiesOnlyIndexRatio 

NTERMEDIATE-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:

  1. As mentioned in 10/15 Market Recap, commercial (smart money) holds record high short positions against Nasdaq 100.
  2. As mentioned in 10/15 Market Recap, AAII bull ratio (4-week average) is way too bullish.
  3. As mentioned in 10/22 Market Recap, institution selling keeps increasing.
  4. As mentioned in 10/08 Market Recap, statistically, a strong off-season could mean a weaker earning season.
  5. As mentioned in 10/11 Market Recap, statistically VIX at 1 month low going into October was not a good sign.
  6. As mentioned in 10/15 Market Recap, US$ may rebound which is not good for the broad market.
  7. As mentioned in 10/19 Market Recap, AAPL MACD is now too stretched which could mean a top for QQQQ.
  8. As mentioned in 10/22 Market Recap, NYSI Weekly STO(5,3,3) sell signal means choppy ahead.

SEASONALITY: LAST TRADING WEEK AND LAST 2 TRADING DAYS OF EACH MONTH SINCE AUG 2009 WERE BEARISH

See 10/22 Market Recap for more details.

For October Seasonality chart please refer to 10/01 Market Recap.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

COMMENT
QQQQ
NDX Weekly NDX to SPX ratio too high. %B too high with negative divergence.
IWM
IWM Weekly %B too high with negative divergence.
CHINA Primary downtrend line breakout? To be confirmed.
CHINA Weekly Extremely high %B.
EEM
EEM Weekly EEM to SPX ratio too high.
XIU.TO
XIU.TO Weekly
TLT *1-2-3 trend change confirmed, TLT could be in an intermediate-term downtrend. ChiOsc is too low though.
TLT Weekly
FXE *On support.
FXE Weekly Stalled at Fib confluences area, %B too high with negative divergence, too high above MA(40).
GLD *On support.
GLD Weekly
GDX On support, BPGDM sell signal though.
GDX Weekly
USO
WTIC Weekly
XLE
XLE Weekly %B too high with negative divergence.
XLF
XLF Weekly Head and Shoulders Top in the forming?
IYR *On support.
IYR Weekly Home builders are lagging.
XLB
XLB Weekly %B too high with negative divergence.
  1. 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.
  2. 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.
  3. 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 no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
  4. * = New update; Blue Text = Link to a chart in my public chart list
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