11/26/2010 Market Recap: Range Market for a While?


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 3 of 5 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in BUY mode.
Short-term Model is *CONFUSED 6 of 6 are NEUTRAL I hold both long and short over the weekend.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
11/26,12/02 12/05 : 12/07 Week 11/26 Next pivot date: 11/24 – 11/26, 12/03 – 12/06
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.
Stock Trader’s Almanac: 59% chances since 1988, buy Tuesday sell Friday in Thanksgiving week.
BEARISH 1.0.6 SPY Unfilled Gaps: 21 unfilled gaps, the max was 21.
10/29 Market Recap: Commercial (smart money) short Nasdaq 100 heavily according to COT Report.
11/12 Market Recap: Smart/Dump money confidence spread too high.
0.2.1 10Y T-Bill Yield: ROC(30) >= 9, topped? (Due to Quantitative Easing, I’m not sure if it still works)
11/22 Market Recap: OEX put call ratio surges, so top is close?
6.3.2b Major Distribution Day Watch: 2 MDD within 5 days means more pullback ahead?
11/23 Market Recap: SPX down 1.4%+ but ISEE Equities Only Index > 200 means more pullbacks.
11/24 Market Recap: MAD right after MDD means rebound then a 2nd leg down.
0.2.2 Extreme Put Call Ratio Watch: CPCI too high.
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 11/23 S 1.9*ATR(10)
NYMO Sell 11/12 S 11/24 High Reference only, not meant to be followed.

SHORT-TERM: DIRECTION NOT CLEAR, MARKET MAY BE RANGE BOUNDED

The market stuck in a range so the direction is not clear. Better we wait for the breakout before taking further actions. Trading is like fishing, more often than not, patience is the key. Not much to say, but promise is promise so I squeezed 3 points here:

  1. Chances are little bit better the market may continue on the downside.
  2. The market may stay in the current range for a few more days.
  3. The next possible pivot time window is from 12/03 to 12/06, not sure it means top or bottom.

Why chances a little bit better the market may continue down?

  1. Because could be a Symmetrical Triangle in the forming, which theoretically means a continuation so chances are little bit better the market may continue on the downside.
  2. Seasonality is generally bearish the next week (see seasonality session below).

SPY60min 

Why the market may stay in the current range for a few more days?

1.0.6 SPY Unfilled Gaps, SPY has 4 unfilled gaps above and 21 unfilled gaps below, from my observation, bears seemed hardly to hold the 5th down gap, while bulls seemed unable to hold the 21st gap. So either gap up or down the next Monday, the gap would get filled very quickly and perhaps more gaps along the way would be filled before the market is able to sustain on one direction.

SPYUnfilledGaps 

Why the next possible pivot time window is from 12/03 to 12/06?

  1. Non Farm Payroll is on 12/03. As you all know now that Non Farm Payroll day was very likely a pivot date, especially if it’s a red day.
  2. Multiple Gann Day due on 12/02 to 12/05.
  3. Magic Day 6.
  4. According to the 3rd party document, 12/02 could be the most possible pivot date in December.

NFPDayTimeAnalysis 

The latest Institutional Buying and Selling Actions from StockTiming (up to 11/24) as requested.

instbsell 

INTERMEDIATE-TERM: 2 MAJOR DISTRIBUTION DAYS WITIN 5 DAYS MEANS MORE PULLBACKS AHEAD

The intermediate-term is in danger of entering a downtrend. See 11/23 Market Recap for more details.

SEASONALITY: MONDAY AND TUESDAY BEARISH, WEDNESDAY (12/01) BULLISH, WHOLE WEEK BEARISH

According to Stock Trader’s Almanac (2011):

  1. Monday after Thanksgiving week, Dow down 5 straight 2004 – 2009.
  2. First Trading Day in December, NASDAQ up 17 of 23, Down three straight 2006 – 2008.

According to Cobra’s Market View (LOL):

6.5.2b Month Day Seasonality Watch, the last 2 trading days of every month since August 2009 were bearish.

MonthDaySeasonalityWatch 

6.5.2c Week Seasonality Watch, the last trading week of every month since August 2009 was generally bearish.

WeekSeasonalityWatch 

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 11/16 S
NDX Weekly UP NASI STO(5,3,3) sell signal.
IWM  
IWM Weekly UP *IWM:SPX too high.
CHINA
CHINA Weekly UP
EEM
EEM Weekly UP
XIU.TO 11/16 S
XIU.TO Weekly UP
TLT
TLT Weekly DOWN
FXE
FXE Weekly *DOWN
GLD
GLD Weekly UP
GDX 11/16 S
GDX Weekly UP
USO
WTIC Weekly UP
XLE 06/15 L
XLE Weekly UP
XLF 10/15 L
XLF Weekly UP
IYR
IYR Weekly UP Home builders are lagging.
XLB 11/16 S
XLB Weekly UP
  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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