03/28/2011 Market Recap: Bullish Bearish Engulfing


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 4 of 5 are SELL 5 of 5 are NEUTRAL SPY ST Model in SELL mode; Non-Stop in SELL mode.
Short-term 6 of 6 are NEUTRAL
GANN DAY MOON:SOLAR CYCLE CONCLUSION
04/07-04/11 04/03 : 04/05 04/04-04/13 Next pivot date: 04/04-04/13
BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
02/23 Market Recap: Pullback could last 4 weeks, then 02/18 highs will be revisited.
03/11 Market Recap: Bullish in 3 to 6 months.
BEARISH 4.0.1 SPX Long-term Trading Signals: Weekly EMA(13) is way too high above weekly EMA(34).
03/18 Market Recap: Could see lower low ahead.
03/25 Market Recap: VIX 18% below MA(10) is bearish in 5 days.
My Thoughts The pullback since 02/22 may last but the 02/18 high will be revisited in 69 calendar days on average.
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM:
SSO/SDS, UPRO/SPXU
Non-Stop 02/24 S N/A Short is for aggressive traders only.
ST Model 03/22 S  1.9*ATR(10)
Short-term *? 03/23 Low I hold long position overnight for speculation play only.

SHORT-TERM: 90% CHANCES A GREEN DAY TOMORROW

Three cents:

  1. 90% chances a green day tomorrow.
  2. Maintain the forecast mentioned in 03/25 Market Recap, expect some weakness this week.
  3. Trading wise, I longed at the close but if the market kept selling off tomorrow, I’d be on the bear side. The long position will be held until the stop loss being hit which is fairly large – below the 03/23 lows.

As mentioned in today’s After Bell Quick Summary, although there’re some chances that today’s intraday high is the 3rd push up (as per my evil plan) but since the RSI negative divergence is not large enough, so chances are better that we may see the 3rd push up tomorrow.

SPY60min

The two evidences listed below not only argue for a green day tomorrow but also are the reasons that I’m willing to bet my face (well, do I still have face?) on maintaining the forecast mentioned in 03/25 Market Recap that we’ll see some weakness ahead.

Statistically the Bearish Engulfing formed on today’s SPY daily chart means 90% chances a green day tomorrow. However it also shows a little bearish bias in 5 days.

SPYShortTerm
BearishEngulfingBackTestSummary

6.5.2b Seasonality – Last Few Days of the Month, pay attention to green arrows, the chart basically says, likely green tomorrow but not pleasant the day after tomorrow and the day after the day after tomorrow. LOL

LastFewDaysOfTheMonth

The 3rd evidence argues for a short-term pullback at least. 6.4.3a SPY Bearish Reversal Day Watch, even not long ago when nothing bearish ever worked this chart sill stood, so I think the pattern is pretty reliable.

SPYBearishReversalDay

The last but not the least, let me answer the question raised in today’s After Bell Quick Summary: The 290+ ISEE Equities Only Index readings are very extreme, even within the top 10 extreme readings in the entire ISEE Index history. This means the retailers are way too bullish therefore I don’t think it’s a bullish sign. To make things worse, the chart below shows, clearly when retailers were buying calls like crazy, OEX option traders, who historically proven to be always on the right side of the market,  were on the bear side, so again, I don’t think a 290+ ISEE Equities Only Index readings are bullish.

OEXPCRatio

INTERMEDIATE-TERM: BULLISH IN 3 TO 6 MONTHS

Combine the study mentioned in 02/23 Market Recap and 03/11 Market Recap, I still believe that 02/18 high will be revisited.

SEASONALITY: BEARISH 03/31, BULLISH 04/01

According to Stock Trader’s Almanac:

  1. Last trading day of March, Dow down 11 of last 16, Russell 2000 up 12 of last 16.
  2. Frist trading day in April, Dow up 13 of last 16.

See Friday’s After Bell Quick Summary for seasonality chart for the last 2 and the 1st trading days of the month.

For March seasonality chart please refer to 03/01 Market Recap.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

TREND COMMENT
QQQQ&Weekly DOWN
IWM & Weekly UP
SSEC & Weekly UP
EEM & Weekly UP
XIU & Weekly UP *TOADV MA(10) is way too high.
TLT & Weekly UP
FXE & Weekly UP
GLD & Weekly UP
GDX & Weekly 03/23 L
USO & Weekly UP
XLE & Weekly UP
XLF & Weekly DOWN
IYR & Weekly UP
XLB & Weekly UP
DBA & Weekly DOWN
  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. * = New update; Blue Text = Link to a chart in my public chart list.
  3. UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  4. DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.
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