12/29/2010 Market Recap: Breakout then back test?


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 5 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
12/27 12/21 : 12/22 12/26 Next pivot date: 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: 24 unfilled gaps, the max is 24.
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.
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?
0.0.2 Combined Intermediate-term Trading Signals: Trend line broken, 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, but I hold no position overnight.

SHORT-TERM: COULD BE A BREAKOUT THEN BACK TEST THE BREAKOUT POINT, SEASONALITY FAVOURS BEAR THOUGH

The pullback before the close doesn’t mean bull or bear, the chart looks like a breakout then back test the breakout point, so I’ll temporarily maintain SPY target at $126.72. I still think a pullback of some kind is just a matter of time. As I’ve mentioned many times, whenever you see my short-term model holds both long and short (or hold short) overnight, chances are high a pullback of some kind has started. For now the short-term model holds nothing, see table above, so it’s probably not a good time to expect a pullback. In order to avoid a confusion between SPY ST Model and short-term model, I’ve changed the short-term model position to the last row of the table above. Now should be clear that Non-Stop, ST Model and Short-term Model are 3 different models, they represent mid-term, intermediate-term and short-term separately. Because each different time frame has its own good and bad merit, so maintain a position for each model at the same time is not a bad idea.

SPY60min

Seasonality wise, however, the rest 2 days of the week favours bear:

  1. According to Stock Trader’s Almanac (2011), last trading day of the year, NASDAQ down 9 of last 10.
  2. Since the August 2009, short at today’s close and cover at Friday close, 14 out of 16 winning rate.

MonthDaySeasonality

Besides the above, I have nothing else to say, a follow up though: CPCE trend line held again today, so now should have no doubt that this is a valid breakout. Well, again, the question is whether it works or not this time?

CPCE

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.

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

See 12/23 Market Recap for more details.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 12/21 L
NDX Weekly UP  
IWM  
IWM Weekly UP
CHINA Clear breakdown below consolidation range, be careful.
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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