11/08/2010 Market Recap: Now or Never for 2.5%+ Pullbacks


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 3 of 3 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term Model is BUY 5 of 6 are NEUTRAL The trend is up, I hold partial long position overnight because the mini price target hasn’t met not because it’s safe to do so.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
11/04,11/14,11/26 11/06 : 11/07 Next pivot date: 11/04 – 11/08, 11/24 – 11/26
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.
10/29 Market Recap: The last 2 months of year are bullish.
11/05 Market Recap: SPX daily bar completely out of BB may mean bulls are safe till the year end.
BEARISH 1.0.6 SPY Unfilled Gaps: 21 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.
4.1.0 S&P 500 Large Cap Index (Weekly): NYSI STO(5,3,3) sell signal.
T2111, percent of NYSE stocks 2 std dev above MA(200) is a little bit high.
T2112, percent of NYSE stocks 2 std dev above MA(40) is a little bit high.
11/04 Market Recap: Percent of SPX stocks 1 std dev above MA(50) is too high.
11/04 Market Recap: 41% of Sentimentrader’s indicators are at bearish extremes. Data temporarily unavailable.
11/05 Market Recap: 70%+ chances SPX will close below 1225 on weekly chart within 2 weeks.
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 *11/08 Low *Adjust stop loss. Yes, it’s not typo, it’s 11/08 low!
NYMO Sell 10/28 S 2*ATR(10) Reference only, not meant to be followed. Stopped out with loss on 11/04.

SHORT-TERM: BEWARE OF POSSIBLE 2.5%+ CORRECTIONS

If you paid attention to the pattern mentioned in 11/05 Market Recap about SPX daily bar completely out of BB, then you won’t be surprised about today’s small pullback, because 8 out of 12 cases since 1991, the day after an out of BB day was a red day. Take a look again on all the cases below for what likely is to happen after today. At least it looks to me more small pullbacks are more likely.

PostOutOfBB 

Although, my guess is that nobody would believe the SPX would ever pullback a little little bigger, but still I’d like to remind you that we’re in a now or never time window. See chart below, since 1991, interestingly, the straight up without 2.5%+ pullbacks usually lasted 48 to 61 trading days. And now we’ve had 50 trading days without 2.5%+ pullbacks. So odds are that a little bit bigger pullback would happen within 2 weeks. Again, this is a now or never time window which in another word is if we had no 2.5%+ pullbacks for more than 61 trading days then chances are that the market would be up straight for 148 trading days without 2.5%+ pullbacks. By the way, the time window for a little bigger pullback within 2 weeks also fits well what I mentioned in 11/05 Market Recap calling for 70%+ chances a red week this or the next week.

NoBigCorrections 

Besides the time window mentioned above, the SPY ST Model also gives a warning today, asking to tighten the stop loss to below the low of today. See chart below for what happened thereafter when SPY ST Model gave such kind of warnings. Judging by the past performance, the warning does deserve some credits, so be careful.

SPYSTModel 

0.2.0 Volatility Index (Daily), the 3rd thing needs attention today is VIX had 3 consecutive reversal like bars, so it could rebound which means that SPX may pullback.

VIXDaily 

INTERMEDIATE-TERM: SPX MAY SHOOT HIGH THEN FALL BACK TO WHERE IT STARTS WHICH USUALLY IS THE 2ND BUY OPPORTUNITY

See 11/05 Market Recap for more details.

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 UP %B too high with negative divergence.
NASI STO(5,3,3) sell signal.
NDX:SPX too high.
Too far away from MA(200) (PPO(1,40,1) too high).
IWM
IWM Weekly UP
CHINA 07/15 L
CHINA Weekly UP
EEM *ChiOsc is too high with 2 hollow red bars.
EEM Weekly UP EEM:SPX too high.
XIU.TO 08/31 L TOADV MA(10) too high.
XIU.TO Weekly UP
TLT ChiOsc is too low.
*Red bar plus black bar, all had led to a rebound recently. Interesting.
TLT Weekly DOWN
FXE
FXE Weekly UP
GLD
GLD Weekly UP
GDX 10/29 L *ChiOsc  is too high.
GDX Weekly UP BPGDM too high, pullback?
USO
WTIC Weekly UP
XLE 06/15 L
XLE Weekly UP
XLF 10/15 L Complex Head and Shoulders Bottom or Double Bottom breakout, target $16.74.
XLF Weekly UP
IYR
IYR Weekly UP Home builders are lagging.
XLB 11/02 L
XLB Weekly UP BPMATE overbought. XLB:SPX a little too high.
  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. 08/31 L, for example, means Long on 08/31.
  6. UP = Intermediate-term uptrend. Set when I see at least one higher high and higher low on weekly chart.
  7. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on weekly chart.
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