12/01/2010 Market Recap: Tradable Bottom, But…


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 *BUY 6 of 6 are NEUTRAL I hold partial long position overnight.
GANN DAY MOON:SOLAR CYCLE CONCLUSION
12/02 12/05 : 12/07 Week 11/26 Next pivot date: 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.
6.3.1a Major Accumulation Day Watch: 2 MAD within 5 days means a tradable bottom as least.
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? Reading very low now, no longer applies.
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 11/26 High *Stopped out flat. Reference only, not meant to be followed.

SHORT-TERM: TRADADABLE BOTTOM BUT MAY JUST BE A RETEST OF THE SPX 11/05 HIGHS BEFORE ROLLOVER AGAIN

As mentioned in 11/29 Market Recap, decisively breakout above SPX 1200 would confirm the low was in. And today we got this much anticipated confirmation with solid evidences supporting more upside room ahead. Also as mentioned in 11/29 Market Recap, now there’re 2 possibilities:

  1. Wave 5 up to SPX 1300+.
  2. Retest the SPX 11/05 highs before rollover again.

Whichever it’ll be depends on whether SPX 11/05 highs could be decisively broken. So now the next point to watch is SPX 1227. Personally, I’d temporarily lean on that this is just a retest of the SPX 11/05 highs. As for why, I also has hinted in 11/29 Market Recap: put call ratio is way too crazy now.

1-2-3TrendChange 

Let’s begin with why there’s more upside room ahead? Besides the reason given by today’s After Bell Quick Summary (basically it’s the Law of Inertia, neither should we short huge green bar nor long huge red bar), from the chart below we can see, 2 Major Accumulation Days within 5 trading days, with no exceptions, means at least a tradable bottom, if it’s not an intermediate-term bottom.

TradableBottom 

Then, why I temporarily lean on that this is just a retest of the SPX 11/05 highs? Because ISEE Equities Only Index is crazy today with readings surged to 327, which in another word is that retailers “call buy to open” is 3 times as much as “put buy to open”. The similar cases happened around the April top this year, when ISEE Equities Only Index made a record high readings at 348. Granted, just one day spike may mean nothing and that’s why I said “temporarily”. But at least it reminds us that from now on we need pay close attention to the ISEE Equities Only Index or whatever sentiment indicators. If they keep crazy then chances are very high that this is just a retest of the SPX 11/05 highs. The charts below listed all the past cases when ISEE Equities Only Index >= 260 for your references.

ISEEEquitiesOnlyIndex2010ISEEEquitiesOnlyIndex2007  

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.
IYR Weekly UP Home builders are lagging.
XLB *12/01 L
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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