11/01/2010 Market Recap: Double Top or Ascending Triangle?


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 2 of 3 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term Model is CONFUSED 6 of 6 are NEUTRAL The trend is not clear. I hold short position overnight because the mini price target hasn’t met, not because it’s safe to hold.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
10/26, 11/04 11/06 : 11/07 Next pivot date: 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.
10/26 Market Recap: Average 2.7% gain during the 8 trading days surrounding midterm election.
10/29 Market Recap: The last 2 months of year are bullish.
BEARISH 1.0.6 SPY Unfilled Gaps: 20 unfilled gaps, the max was 21.
10/29 Market Recap: AAII bull ratio (4-week average) too bullish.
10/29 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.
10/29 Market Recap: Institutions are selling into strength.
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?
*6.4.2c Extreme TICK Readings Watch: Extremely low TICK guarantees a lower low or close ahead?
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
NYMO Sell 10/28 S 2*ATR(10) Reference only, not meant to be followed.

SHORT-TERM: DOUBLE TOP OR ASCENDING TRIANGLE, WE HAVE TO WAIT AND SEE

Once again the market opened high and closed lower. However it doesn’t mean bearish yet because even on an intraday chart there’s no lower low yet. From the chart below, one could argue for a potential Double Top while the other argue for an Ascending Triangle. So we need see tomorrow.

DoubleTopOrAscendingTriangle 

Overall, lots of bad signs, just since bulls have YES WE CAN, so all I can say now are bears may have a tiny tiny little little hope. (Well, ask yourself if you ever believe those bad signs at all. If the answer is no, then perhaps this time they will work. LOL)

6.4.2c Extreme TICK Readings Watch, the very unique thing today is again an extremely low TICK reading was recorded, so very likely a lower low or close ahead.

TICKWatch 

0.1.0 SPY Short-term Trading Signals, too many black bars which in the past one or at most two black bars would mean a pullback. Also pay attention to a potential 1-2-3 trend change setup.

SPYShortTerm 

0.2.0 Volatility Index (Daily)VIX could have broken its bullish Falling Wedge therefore is not good for SPX.

VIXDaily 

Of course the breakout of the bullish Falling Wedge in the chart above still needs a confirmation tomorrow, but, see chart below, if VIX leads SPX still works, then SPX should pullback pretty soon.

VIXLeadsSPX 

INTERMEDIATE-TERM: BEARISH BIASED, PIVOT DATE EITHER ON 10/25 OR AROUND 11/04

Maintain the intermediate-term bearish view. We may have passed the pivot day on 10/25 or the next pivot day could be 11/04. Below are summaries of all the arguments supporting my intermediate-term bearish view:

  1. As mentioned in 10/29 Market Recap, commercial (smart money) holds record high short positions against Nasdaq 100.
  2. As mentioned in 10/29 Market Recap, AAII bull ratio (4-week average) is way too bullish.
  3. As mentioned in 10/29 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 10/22 Market Recap, NYSI Weekly STO(5,3,3) sell signal means choppy ahead.

SEASONALITY: LAST 2 MONTHS OF YEAR ARE BULLISH

See 10/29 Market Recap for more details.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 10/15 L
NDX Weekly %B too high with negative divergence. NASI weekly STO(5,3,3) sell signal.
IWM
IWM Weekly
CHINA 07/15 L Primary downtrend line breakout not confirmed.
CHINA Weekly High %B with negative divergence plus stalled under primary bear trend line. Pullback?
EEM Could be a Symmetrical Triangle in the forming, so one more push up?
EEM Weekly
XIU.TO 08/31 L *Breakdown trend line then back test the previous high?
XIU.TO Weekly Testing Fib 61.8%.
TLT 1-2-3 trend change confirmed, the intermediate-term trend is down. ChiOsc is too low though.
TLT Weekly
FXE Could be a Symmetrical Triangle in the forming, so one more push up?
Pay attention to volume surge on UUP, US$ may very close to a bottom.
FXE Weekly Stalled at Fib confluences area.
GLD Watch for potential 1-2-3 trend change! Bump and Run Reversal in the forming?
*Bearish reversal bar.
GLD Weekly
GDX 10/29 L Watch for potential 1-2-3 trend change! *Bearish reversal bar.
GDX Weekly
USO *Bull Flag breakout to be confirmed.
WTIC Weekly
XLE 6/15 L
XLE Weekly %B too high with negative divergence.
XLF 10/15 L
XLF Weekly Head and Shoulders Top in the forming?
IYR Testing trend line support.
IYR Weekly Home builders are lagging.
XLB *11/02 L
XLB Weekly

  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
  5. Trading signals in OTHER ETFs table are mechanical signals. See HERE for back test results. 

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