02/22/2011 Market Recap: Will the 3rd time be the charm?


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 4 of 6 are NEUTRAL
GANN DAY MOON:SOLAR CYCLE CONCLUSION
02/10-/13,02/20 02/18 : 02/19 02/13,02/19 Next pivot date: 02/20
BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
4.1.0 S&P 500 Large Cap Index (Weekly): Cup with Handle, target 1428.
*6.2.2b VIX Trading Signal (BB): Watch for potential buy setup.
BEARISH 01/07 Market Recap: Strong Off-Season means poor Earning Season.
4.0.4 Dow Theory: Averages Must Confirm: BPSPX is way too overbought.
4.0.1 SPX Long-term Trading Signals: Weekly EMA(13) is way too high above weekly EMA(34).
4.1.0 S&P 500 Large Cap Index (Weekly): Price is now too high above MA(200).
02/14 Market Recap: Smart/Dumb Money Confidence spread is too large.
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 02/17 L Breakeven *Stopped out long position on 02/22 with loss.
Short-term N/A N/A Trend is *DOWN. I hold partial short position overnight.
My Thoughts I’m almost convinced that this could be a primary 3 of 3 up to much much higher.

SHORT-TERM: COULD SEE REBOUND TOMORROW BUT I EXPECT A 2ND LEG DOWN THEREAFTER

No conclusion today, need see how market rebounds tomorrow. There’re 3 times recently when SPX had a pullback larger than 20 points which if per normal pattern, the pullback shall become larger and larger, then chances are pretty good that this time we’ll have a 2 leg down after a rebound tomorrow. Of course, since the market nowadays is very very bullish, plus VIX is now way above BB and MA ENV(10, 20) top (attention, it’s 20% above MA10 not just 10% above MA10 which is nothing), so I cannot exclude the possibility that the market was bottomed today like what happened the previous 2 times that had no 2nd leg down. Personally, I’m now (subject to change at any time of course) inclined to believe that this time we’ll have a 2nd leg down at least.

FurtherBelowMA20

SPY60min

Charts below are my witnesses for a green day tomorrow:

VIX rose 18%+ on a single day, buy SPX at close and sell at the next day’s close since year 2000, you have 81% chances for tomorrow.

VIXSurge

36 out of 54 times (67%) a green day the next day after a Major Distribution Day (NYSE Down Volume : NYSE Up Volume >= 9).

MDDNextDay

Charts below are my reasoning for a short-term bottom (at least):

6.2.2b VIX Trading Signal (BB), 6.2.0a VIX Trading Signals (ENV), VIX out of BB top or MA ENV(10, 20) is a potential buy setup.

VIXBBBuySetup

Seems like the market was bottomed whenever VIX:VXV > 0.9 recently.

VIXVXVRatio

INTERMEDIATE-TERM: COULD BE NO 2.5%+ PULLBACK FOR 85 MORE TRADING DAYS, BEARS MAY WAIT ANOTHER WEEK, BUT DON’T HOPE TOO MUCH

See 02/18 Market Recap for more details.

SEASONALITY: BEARISH THE NEXT WEEK

See 02/18 Market Recap for more details.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ 01/28 S
NDX Weekly UP
IWM
IWM Weekly UP
CHINA
CHINA Weekly UP No higher low yet but the rebound is so strong so could be in uptrend now.
EEM
EEM Weekly DOWN
XIU.TO 02/04 L TOADV MA(10) is a little too high, all led to a pullback of some kind recently.
XIU.TO Weekly UP Too far above MA(200), %B too high.
TLT *Could be a channel breakout, trend may about to change.
TLT Weekly DOWN
FXE
FXE Weekly UP
GLD
GLD Weekly UP
GDX 02/03 L
GDX Weekly UP
USO *Breakout? See WTIC below.
WTIC Weekly UP
XLE 02/09 S
XLE Weekly UP Too far above MA(200).
XLF 10/15 L
XLF Weekly UP
IYR
IYR Weekly UP
XLB 02/09 S *Testing trend line.
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. 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.
  3. * = New update; Blue Text = Link to a chart in my public chart list.
  4. 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.
  5. UP = Intermediate-term uptrend. Set when I see at least one higher high and higher low on daily chart.
  6. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on daily chart.
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