04/21/2011 Market Recap: Could see some short-term weakness


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 Cobra Impulse in SELL mode; Non-Stop in SELL mode.
Short-term 4 of 6 are NEUTRAL
GANN DAY MOON:SOLAR CYCLE CONCLUSION
4/20,4/26 04/17 : 04/20 04/04-04/13 Next pivot date: 04/20
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.
04/01 Market Recap: Bullish April.
BEARISH 4.0.1 SPX Long-term Trading Signals: Weekly EMA(13) is way too high above weekly EMA(34).
03/18 Market Recap: 03/16 lows will be revisited.
My Thoughts More on the upside but beware of short-term risks as VIX is now way below its BB bottom.
SPY SYSTEM ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
Non-Stop 04/15 S N/A Short is for aggressive traders only.
CI Buy & Hold 04/18 S N/A
CI Swing 04/18 S 2*ATR(10) *Stopped out on 04/21 with loss.
Short-term UP N/A I hold long position over the weekend.

SHORT-TERM: COULD SEE SOME WEAKNESS AHEAD

Three cents:

  1. Could see another gap up Monday (or at least higher high), but the day may close in red.
  2. Could see pullback soon, the mini target is to close below the 04/20 closes.
  3. If the pullback is not strong, then it’s a good chance to load longs.

Why gap up Monday but eventually in red? I’ve explained this in Thursday’s After Bell Quick Summary. Chart pattern wise, there should be one more push up but the recent price actions after a high NYADV readings argue for a red Monday.

SPY60minNYADV

About the expected pullback, the major argument is still the VIX dropped below BB bottom. I’ve told a few stories about VIX and BB in 04/20 Market Recap and they’re still valid. Listed below are all the past cases when VIX body completely dropped out of BB bottom (means both open and close are below BB bottom). Before year 2004, StockCharts has only VIX close prices, so I can only show the detailed charts here up to year 2004. But anyway, it should be clear, 100% chances SPX will close below its 04/20 close soon. If you paid a little more attention (other than I blah blah), you’d notice that there’re good chances the pullback won’t be small, so the possibilities that we’re at an intermediate-term top now cannot be excluded. Personally, as of now (subject to change as always) I think such a possibility is low, the reasoning is, the past 3 days rebound was very strong, rarely they fail immediately, besides, the intermediate-term session below will prove that QQQ weekly Bullish Engulfing is very bullish.

VIXBodyOutOfBB2011
VIXBodyOutOfBB2009
VIXBodyOutOfBB2006
VIXBodyOutOfBB2004
VIXBodyOutOfBB2000

INTERMEDIATE-TERM: SPX TARGET 1352 TO 1381

For 2 reasons, I’d like to maintain the intermediate-term price target mentioned in 04/01 Market Recap.

Could be a Symmetrical Triangle in the forming which is a very common wave 4 pattern, so this proves that the price target calculated based on wave 5 is logical. For how I got the price target, please refer to 04/01 Market Recap.

SPXTarget

Another reason is QQQ weekly Bullish Engulfing. See back test below, highlighted in green are all weekly Bullish Engulfing cases, buy at Friday’s close sell 1, 2, 3, 4, 5, 6 week later, looks very bullish both statistically and visually. The same back test on SPY, by the way, doesn’t have such astonishing effect but it’s not bearish and considering the weakness we saw on Financials sector recently, my guess is QQQ will outperform SPY in the coming days.

QQQWeeklyBullishEngulfing

SEASONALITY: BEARISH MONDAY, THURSDAY AND FRIDAY, BULLISH WEDNESDAY

According to Stock Trader’s Almanac, day after Easter, worst post-holiday, S&P down 16 of 20 from 1984 to 2003, but improving recently, up 6 of last 7, including 1.5% gain in 2008.

6.5.2b Seasonality – Last Few Days of the Month, could be bearish Thursday and Friday but bullish Wednesday.

LastFewDaysOfMonth

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

TREND COMMENT
QQQ & Weekly UP
IWM & Weekly UP
SSEC & Weekly UP
EEM & Weekly UP
XIU & Weekly DOWN
TLT & Weekly UP
FXE & Weekly UP
GLD & Weekly UP
GDX & Weekly 04/18 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.
© 2013 Cobra's Market View — All Rights Reserved.