05/17/2011 Market Outlook (Bear Flag)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: A LITTLE LITTLE BEARISH BIASED

A little higher chances that the pullback isn’t over yet. The main argument is, the law of inertia, so the very first rebound after a strong push down like we had in the past couple of days usually would fail. The chart below shows a possible Descending Triangle breakdown then kiss breakdown point goodbye pattern and in addition the Bear Flag looks obvious to me on the QQQ chart. Both are arguing for more pullbacks ahead.

SPY60min

Also I have a small back test here, which is not solid but it seems reasonable to say a little little bearish biased as from the back test result, the next 1 to 2 days are mostly unpleasant but up good a week later. So the conclusion is we may pretty close to a tradable bottom but not yet.

VIXDaily
VIXBearishEngulfingBackTest

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

Maintain what I said in 05/06 Market Outlook. Need pay attention to the possibility that wave 5 ends while primary wave 3 sharply down has started. Still just an attention, not even a warning though.

SEASONALITY: BULLISH MONDAY, BEARISH FRIDAY

According to Stock Trader’s Almanac:

  • Monday before May expiration, Dow up 19 of last 22, average gain 0.6%.
  • May expiration day, Dow down 12 of last 20, average loss 0.2%.

For May seasonality day by day please refer 04/29 Market Outlook.

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

  TREND COMMENT
QQQ & Weekly UP  
IWM & Weekly UP  
SSEC & Weekly DOWN  
EEM & Weekly DOWN Double Top breakdown? Be careful. 
XIU & Weekly DOWN  
TLT & Weekly UP  
FXE & Weekly DOWN  
GLD & Weekly UP  
GDX & Weekly DOWN  
USO & Weekly DOWN  
XLE & Weekly DOWN  
XLF & Weekly DOWN Descending Triangle breakdown? Be careful.
IYR & Weekly UP  
XLB & Weekly DOWN *Double Top breakdown? Be careful. 
  • * = 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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