11/29/2010 Market Recap: The low could be in, watch SPX 1200 breakout to confirm


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 overnight.
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.
*
0.2.0 Volatility Index (Daily): Open above BB top then formed a Dark Cloud Cover, bullish short-term.
BEARISH *1.0.6 SPY Unfilled Gaps: 20 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.
*1.2.0 INDU Leads Market: INDU had a lower low, so SPX might follow eventually.
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: THE LOW COULD BE IN, WATCH SPX 1200 BREAKOUT TO CONFIRM

The low could be in for 2 reasons:

  1. This is a typical breakout downtrend line then back test the previous low pattern (which could be seen as the 2nd leg down as I’ve been blah blah). Now SPX needs to breakout 1200 to form a 1-2-3 Trend Change pattern to confirm the trend change.
  2. From time perspective, the pullback has lasted 6 trading days which is right within the 5 to 8 trading days pullback range so far this year.

Since both chart pattern and time conform, so there’re some chances that the low was in. Pay attention, I said “there’re some chances” because if tomorrow the market decisively breakdown below SPX 11/16 lows, then obviously the judgment is wrong. As for whether there’ll be a 5th wave up as per many Elliott Wave analysts, we’ll have to wait until the SPX 11/05 highs decisively broken. The chart below just gives a little concept about the wave 5 theoretical target which could go as high as 1300+.

LowCouldBeIn 

0.2.0 Volatility Index (Daily), this chart also says the  low could be in, at least for short-term.

VIXDaily 

If, I said if, the SPX 1200 is taken tomorrow, confirming the low was in, why I still couldn’t say this is the wave 5 up? Well, there’re some possibilities, the same but bigger 1-2-3 Trend Change pattern are in the play, and that’s why I mentioned above, whether this is the wave 5 up, we’ll have to wait until the SPX 11/05 highs decisively broken. For now, bears better wait, while paying close attention to put call ratio, if after just a few days rebound, the ratio goes crazy again, then chances are very good, the rebound is just to retest the previous high.

TestPreviousHigh 

1.2.0 INDU Leads Market,INDU had a  lower low before SPX which supports the view that the rebound (if any) could just be the retest of the previous high. Please refer HERE for more evidences about INDU Leads Market, if interested. 

INDULeadsMarket 

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

See 11/26 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 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 *Could be a Bear Flag in the forming.
*Double hollow red bar under MA(50), be careful.
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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