12/23/2010 Market Recap: No Santa Rally the Next Week?


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 4 of 5 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term 6 of 6 are NEUTRAL
GANN DAY MOON:SOLAR CYCLE CONCLUSION
12/21,12/27 12/21 : 12/22 12/26 Next pivot date: 12/21, 12/27
BULLISH 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: 23 unfilled gaps, the max is 23.
10/29 Market Recap: Commercial (smart money) short Nasdaq 100 heavily according to COT Report.
12/20 Market Recap: Smart/Dumb 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)
1.2.0 INDU Leads Market: INDU had a lower low, so SPX might follow eventually.
8.2.7b Record High ISEE Equities Only Index Readings 2010: Record high, top is close?
12/14 Market Recap: Too many Sentimentrader’s indicators are at bearish extremes.
0.2.2 Extreme Put Call Ratio Watch: Both CPC and CPCE are low, so topped?
8.1.4 Normalized CPC: Too low, so topped?
0.2.3 NYSE McClellan Oscillator: Hindenburg Omen confirmed.
0.1.1 SPX Intermediate-term Trading Signals: CPC MA(10) too high, so topped?
6.2.3 VIX:VXV Trading Signals: Too low, so topped?
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
ST Model Buy mode doesn’t mean long, a 2nd buy signal is needed to enter long.
NYMO Sell 12/09 S 2*ATR(10) Stopped out on 12/21 with loss. Reference only, not meant to be followed.
Short-term N/A N/A Trend is up, I hold long position over the weekend.

SHORT-TERM: COULD BUMP INTO SOME HEADWIND

The famous Santa Rally will begin the next week, my first reflection is Bull Flag, so there’s one more push up, but it’s only on intraday chart so the one more push up may just be of an intraday scale. It’s the solid rebound of VIX that changed my view (or more precisely changed my reflection) about the next week, plus the fact the VIX is on an important support so I couldn’t help thinking that we may repeat what happened the last year: We’ve already seen the Santa Rally this week so there won’t be one the next week.

SPY15min

Let’s see why VIX got me worried:

It’s the big white bar got me worried, if repeats what happened recently, then we could finally see a pullback that could last for a few days.

VIXDaily

VIX is now on an important support, if it holds then also it means SPX would have a week or two pullbacks at least.

VIXWeekly

I still remember what happened on the last year’s Santa Rally, especially the sharp drop right before the last day’s close which also backed by statistics that according to the Stock Trader’s Almanac 2011, last trading day of the year, NASDAQ down 9 of last 10.

SantaRally

INTERMEDIATE-TERM: COULD BE WAVE 5 UP TO SPX 1300+, PIVOT TOP COULD BE AROUND 01/05 TO 01/12

See 12/17 Market Recap for more details.

I believe most of you have already heard that the AAII Bull Ratio hit a 5 year high. See chart below. According to statistics, generally a little choppy ahead.

20101223_aaii_chart

SEASONALITY: LAST WEEK AND THE LAST 2 TRADING DAYS OF THE MONTH WERE GENERALLY BEARISH

Seasonality, if forget about the Santa Rally, the next week should be generally bearish.

  • According Stock Trader’s Almanac 2011, last trading day of the year, NASDAQ down 9 of last 10.
  • The last 2 trading days of every month since August 2009 were bearish.

MonthDaySeasonalityWatch

  • 6 out of 15 times (60%) a red last week each month since August 2009.

WeekSeasonalityWatch

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 12/21 L
NDX Weekly UP  
IWM  
IWM Weekly UP
CHINA
CHINA Weekly UP
EEM
EEM Weekly UP
XIU.TO 12/02 L
XIU.TO Weekly UP
TLT
TLT Weekly DOWN
FXE *The 2nd test of the previous low, so there’s a chance EURO is bottomed around here.
FXE Weekly DOWN
GLD
GLD Weekly UP
GDX 12/17 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 12/01 L
XLB Weekly UP BPMATE is way too overbought.
  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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