04/28/2011 Market Outlook: Still expect some weakness ahead


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SHORT-TERM: EXPECT PULLBACK AS EARLY AS TOMORROW

Three cents:

  1. Still expect a pullback, as early as tomorrow.
  2. Today’s Trading Signals is very important, please take a look because it mentioned that SPY ST Model is yelling for a top now. The model has very good credit for calling a top in the past, so although sounds stupid to call a top now but let’s just don’t neglect it.
  3. Trading wise, as long as it’s not a sharp pullback, it’s a buy opportunity.

The arguments for the pullback are mostly the same as those mentioned in 04/27 Market Outlook, just some are even more extreme.

SPX closes out of BB top for 3 consecutive days, short at today’s close and cover tomorrow (if SPX closes below BB top), you’ll have 90% chances since year 2003. Remember I said in today’s Trading Signals that short at the close may not be the best entry? Well, the chart below also explains why as 100% chances we’ll see a higher high tomorrow.

SPXCloseOutOfBBFor3Days

T2112 becomes more extreme.

T2122

The 3rd reason is for fun only. Have you noticed that the recent patterns are up 3 days then down 1 day? LOL

SPYShortTerm

There’re some other bearish signals, not necessarily mean a pullback tomorrow, but are by no means bull friendly in the short-term.

OEX Put/Call Ratio surge again.

OEXPutCallRatio

Rydex Traders (we retailers) are way too bullish now.

RydexBetaChaseIndex
RydexBullBearRSISpread

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

See 04/27 Market Outlook for more details.

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 Bearish Harami
IWM & Weekly UP *ChiOsc is way too high.
SSEC & Weekly UP More weakness would mean downtrend, be careful.
EEM & Weekly UP Doji 
XIU & Weekly DOWN May see further pullback.
TLT & Weekly UP
FXE & Weekly UP Spinning Top *3.1.1 US Dollar Index Bullish Fund: Volume surge, bottomed?
GLD & Weekly UP *ChiOsc is a little high.
GDX & Weekly UP Shooting Star
USO & Weekly UP Doji 
XLE & Weekly UP Hollow Red Bar
XLF & Weekly DOWN Bear Flag?
IYR & Weekly UP
XLB & Weekly UP Doji
  • * = 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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