11/15/2010 Market Recap: SPX Lower Close Ahead?


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 3 of 5 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term Model is SELL 6 of 6 are NEUTRAL The trend is down. I hold partial short overnight because the mini price target hasn’t met not because it’s safe to do so.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
11/14,11/26 11/21 : 11/22 Next pivot date: 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.
11/12 Market Recap: 77% chances the 11/05 high will be revisited in 3 weeks.
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.
11/12 Market Recap: Too many Sentimentrader’s indicators are at bearish extremes.
11/05 Market Recap: 70%+ chances SPX will close below 1225 on weekly chart within 2 weeks.
6.4.0 SPX and NYMO Divergence Watch: SPX new high while NYMO is negative, topped?
6.4.3a SPY Bearish Reversal Day Watch: Bearish reversal day, so topped?
8.1.4 Normalized CPC: A little low.
0.0.2 Combined Intermediate-term Trading Signals: Trend line breakout confirmed, so topped? 
0.2.4 Nasdaq Total Volume/NYSE Total Volume: Too high, so topped?
1.0.0 S&P 500 SPDRs (SPY 60 min): Descending Triangle, target $118.37.
11/12 Market Recap: Smart/Dump money confidence spread too high.
*11/15 Market Recap: SPX down 3 consecutive days means lower close ahead.
*0.2.1 10Y T-Bill Yield: ROC(30) >= 9, topped? (Due to Quantitative Easing, I’m not sure if it still works)
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 *Long if up day tomorrow, the stop loss will be 1.9*ATR(10).
NYMO Sell 11/12 S 2*ATR(10) Reference only, not meant to be followed.

SHORT-TERM: COULD SEE LOWER SPX CLOSE AHEAD BUT THE SPX 11/05 HIGH MIGHT BE TESTED AS WELL

Two conclusions:

  1. Reiterate "77% chances the SPX 11/05 high will be revisited” mentioned in 11/12 Market Recap.
  2. Very likely SPX will have a lower close ahead (either after the retest of the SPX 11/05 high or continue down from here).

For reasons, see the chart below: According to the most recent patterns, whenever SPX was down 3 days in a row, a lower close ahead was almost guaranteed. And because SPX wasn’t down lot in its 3 consecutive down days, plus the statistics mentioned in11/12 Market Recap, so chances are very good that the SPX 11/05 high could be retested (either higher high or a little bit lower high).

SPXDown3ConsecutiveDays 

For others, I don’t have much to say as the current chart pattern looks bilateral to me, so need see tomorrow. Gap up huge tomorrow morning then probably the bottom was in today, while red day again tomorrow, buy at tomorrow close and sell at the very first green day close since 1991, you have 79% winning rate.

BuySPX4thDownDayClose 

0.2.1 10Y T-Bill Yield, just to explain here since someone asked: ROC(30) >= 9 used to mean a market top, as you can see from 8.2.1a Market top/bottom by ROC30 of 10Y T-Bill Yield 2001-2004 and 8.2.1b Market top/bottom by ROC30 of 10Y T-Bill Yield 2005-2008, the signals were very reliable. The problem now is because of large scale Quantitative Easing, I’m not sure if this signal ever works anymore (for why, if you still are interested, take a look at 8.1.7 Gold vs Oil, basically it relates to whether we’re in an inflation environment). Guess we’ll have to wait and see.

TNXDaily 

INTERMEDIATE-TERM: THE FIRST 2.5%+ PULLBACK AFTER A 40+ STRAIGHT UP TRADING DAYS WAS USUALLY A BUY

See 11/12 Market Recap for more details.

SEASONALITY: BEARISH MONDAY, BULLISH FRIDAY, BULLISH THE WHOLE WEEK

See 11/12 Market Recap for more details.

For November seasonality chart please refer to 11/11 Market Recap for more details.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 10/15 L
NDX Weekly UP NASI STO(5,3,3) sell signal.
IWM *Black bar on multiple support, rebound?
IWM Weekly UP
CHINA Big red bar means more pullbacks ahead, so be careful.
CHINA Weekly UP
EEM
EEM Weekly UP
XIU.TO 08/31 L
XIU.TO Weekly UP
TLT ChiOsc is too low.
TLT Weekly DOWN %B is a little too low.
FXE Broadening Top? The breakout is bilateral, so wait.
FXE Weekly UP
GLD
GLD Weekly UP
GDX 10/29 L
GDX Weekly UP BPGDM and GDX:SPX both are too high. Pullback?
USO *Black bar on multiple support, rebound?
WTIC Weekly UP
XLE 06/15 L
XLE Weekly UP %B is too high with negative divergence.
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 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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