05/03/2011 Market Outlook (Down Day Tomorrow?)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: 10 OUT OF 12 CHANCES A DOWN DAY TOMORROW

Three cents:

  1. Could see red day tomorrow.
  2. There will be a rebound, so bulls have nothing to worry, FOR NOW.
  3. Trading wise, sharp down tomorrow, I’d be in bear’s camp, while rebound tomorrow, I’d stay with bulls.

Why could be a red day again tomorrow? See chart below, 10 out of 12 (83%) times a red day to follow-through a Bearish Reversal Day (that’s yesterday) means a red day the 3rd day (that’s tomorrow).

BearishReversalDayWithFollowThrough

Basically, I still believe a RSI negative divergence is needed before a real pullback could kick in. The rally since 04/18 was just way too strong, it’s very rare for bulls to give up without fighting. The statistics below, from another angle, argues there will be a rebound: QQQ down 3 consecutive days, buy at close today, hold until the very first green day, you’ll have 79% chances since year 2003.

QQQDown3ConsecutiveDays

The broken of a 3 points validated CPCE trend line should mean a top of some kind as long as it could hold for tomorrow. If indeed the 10 out of 12 chances a red day tomorrow then the trend line most likely will hold. Besides, if  a red tomorrow would be the SPY’s 3rd consecutive down days and since a strong uptrend should never ever have 3 consecutive down days, so chances would be very good that indeed we’re now around a top of some kind.

CPCE

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: BULLISH MONDAY AND FRIDAY

See 04/29 Market Outlook for more details. For May seasonality day by day also see 04/29 Market Outlook.

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

TREND CANDLESTICK COMMENT
QQQ & Weekly UP Hammer 
IWM & Weekly UP  
SSEC & Weekly DOWN Officially in downtrend now, be careful.
EEM & Weekly UP
XIU & Weekly DOWN
TLT & Weekly UP Hanging Man  *ChiOsc is way too high.
FXE & Weekly UP Shooting Star  3.1.1 US Dollar Index Bullish Fund: Volume surge, bottomed?
FXE is now too high above MA(200), see weekly chart.
GLD & Weekly UP
GDX & Weekly UP *Breakdown, bearish, but too low below BB bottom.
USO & Weekly UP Shooting Star 
XLE & Weekly UP Dark Cloud Cover 
XLF & Weekly UP Outside bar Bear Flag?
IYR & Weekly UP Spinning Top 
XLB & Weekly UP Bearish Engulfing
  • * = 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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