06/14/2011 Market Outlook (Huge Gap Down Tomorrow or the 3rd Time is Charm?)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: THE REST OF THE WEEK MIGHT NOT BE PLEASANT

Whether the low was in, I’ll have to wait and see. For now, I still think this is just a rebound therefore a sell opportunity. Two reasons:

About tomorrow morning, the chart below is very interesting. Looks like the Bearish Engulfing formed in the last couple of hours means a huge gap down tomorrow. The bull’s question though: Will the 3rd time be the charm?

SPY60min

For the rest 3 days of this week, so far the evidences I’ve collected are arguing for up one more day AT MOST, either tomorrow or the day after tomorrow.

Why up either tomorrow or the day after tomorrow, but not both? Two reasons:

  • NYADV too high, see chart below, more likely down tomorrow, or small green the most and if up tomorrow, then the day after tomorrow would be down.

NYADV

  • ISEE Indices & ETFs Only Index < ISEE Equities Only Index AND ISEE Indices & ETFs Only Index >= 100, sell short at today’s close, hold until the very first down day, since year 2006 the inception of the ISEE Indices & ETFs Only Index, you have 74% chances. Noticed that on average winners took 1.8 trading days, so it’s logic to say down day the day after tomorrow at the latest.

ISEEIndicesOnlyIndex

Then why down Friday? This is according to Stock Trader’s Almanac, June Triple Witching Day, Dow down 7 of last 12, average loss 0.5%. Besides, from the chart below, looks like all the recent Fridays were not very bull friendly.

FridaySeasonality

INTERMEDIATE-TERM: STATISTICALLY BEARISH FOR THE NEXT 2 WEEKS

See 06/03 Market Outlook for more details.

SEASONALITY: BEARISH MONDAY AND FRIDAY

According to Stock Trader’s Almanac:

  1. Monday of Triple Witching Week, Down down 8 of last 13.
  2. June Triple Witching Day, Dow down 7 of last 12, average loss 0.5%.

Also see 06/01 Market Outlook for June day to day seasonality.

ACTIVE BULLISH SIGNALS:

ACTIVE BEARISH SIGNALS:

  • N/A

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

  TREND COMMENT
SPY & Weekly DOWN Clear breakdown, target March lows as well as MA(200).
QQQ & Weekly DOWN  
IWM & Weekly DOWN Head and Shoulders Top breakdown, target $74.57.
SSEC & Weekly DOWN Hammer on retest of the previous low, so may be bottomed?
EEM & Weekly DOWN  
XIU & Weekly DOWN Double Top breakdown, target $17.69. TOADV MA(10) oversold though.
DAX & Weekly DOWN
TLT & Weekly UP  
UUP & Weekly DOWN Breakout down trend line then kiss the trend line good-bye?
GLD & Weekly UP  
USO & Weekly DOWN  
XLE & Weekly DOWN Could be a Complex Head and Shoulders Top in the forming.
XLF & Weekly DOWN  
IYR & Weekly DOWN Double Top breakdown, target $57.34.
XLB & Weekly DOWN  
  • * = 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.
© 2013 Cobra's Market View — All Rights Reserved.