04/27/2011 Market Outlook (Expect pullback as early as tomorrow)


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SHORT-TERM: EXPECT PULLBACK AS EARLY AS TOMORROW

Two cents:

  1. Could see a pullback as early as tomorrow.
  2. Pullback, if any, is a buy opportunity because normally at least today’s high will be retested before a real big pullback could be possible.

For 4 reasons I’m calling a pullback as early as tomorrow:

  • SPX close above BB top for 2 consecutive days, short at today’s close cover on the very first day when SPX close below BB top since 2003, you’ve got 83% chances.

CloseAboveBBTopFor2Days

  • T2112 is a little high. Not as extreme as before but since now lots of stocks are at very high level so the current T2112 readings should be extreme enough. At least so far this year whenever T2122 reached the current level, SPX had a pullback of some kind thereafter (See blue curve in the background).

T2112

Spy60min

MonthDaySeasonality

INTERMEDIATE-TERM: SPX NOW IN 1352 TO 1381 WAVE 5 PRICE TARGET AREA, WATCH FOR POTENTIAL REVERSAL

SPX now officially entered into the wave 5 price target area I mentioned in 04/01 Market Recap and 04/21 Market Recap. If it reverses hard within the area, then we should be careful about the possibility of primary wave 3 down (sharply). For now, I don’t have any solid evidences for calling the primary wave 3 down but neither can 100% guarantee that the market will skyrocket high from here, so we’ll have to wait and see. Just want you to know that we are at a critical area.

PriceTarget

Remember I mentioned that IBM down on ER is a bad sign? Well, AMZN up today on ER is, unfortunately, a bad sign too. The screenshot below is from Bespoke. Although the data is not up to date, but my impression is both IBM and AMZN recent ER did predict the SPX price the same way as described in the screenshot below.

BestPredictorStocks

SEASONALITY: BEARISH MONDAY, THURSDAY AND FRIDAY, BULLISH WEDNESDAY

See 04/21 Market Recap for more details.

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

TREND CANDLESTICK COMMENT
QQQ & Weekly UP
IWM & Weekly UP
SSEC & Weekly UP More weakness would mean downtrend, be careful.
EEM & Weekly UP *Doji 
XIU & Weekly DOWN *Hanging Man May see further pullback.
TLT & Weekly UP
FXE & Weekly UP *3.1.1 US Dollar Index Bullish Fund: Volume surge, bottomed?
GLD & Weekly UP
GDX & Weekly UP
USO & Weekly UP
XLE & Weekly UP *Hanging Man
XLF & Weekly DOWN *Hanging Man Bear Flag?
IYR & Weekly UP
XLB & Weekly UP *Hanging Man 
  • * = New update; Blue Text = Link to a chart in my public chart list.
  • UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  • DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.
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