06/20/2011 Market Outlook (Cup with Handle?)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: MORE UP BUT IT’S A SELL OPPORTUNITY

Two cents:

  1. Could see more up until perhaps the day after tomorrow FOMC announcement, targeting 06/14 highs.
  2. Will temporarily regard the current rally as a sell opportunity.

The chart below explains why I think more upside ahead: Ascending Triangle or Cup with Handle.

SPY15min

For three reasons, I think this is a sellable bounce.

  • I’ve given the first reason in today’s Trading Signal:  Price Volume Negative Divergence.
  • The chart below shows the reason number tow. If you still remember how SPX used to rebound from a bottom then apparently the current rebound is much weaker. That said, there’re always some exceptions so maybe this time it simply starts slow, may catch up tomorrow, so let’s wait and see.

WeakRebound

  • The third reason is OEX Put Call Ratio surged again which looks suspicious as today’s CPCE reads merely 0.57. This means people were buying lots of calls while OEX option traders bought lots of OEX put and historically, OEX option traders are more often on the right side of the market.

OEXPutCallRatio

INTERMEDIATE-TERM: STATISTICALLY BEARISH FOR THE NEXT WEEK

See 06/03 Market Outlook for more details.

SEASONALITY: BEARISH NEXT WEEK

According to Stock Trader’s Almanac, week after June Triple Witching, Dow down 11 in a row and 18 of last 20, average loss since 1990, 1.2%.

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  
QQQ & Weekly DOWN  
IWM & Weekly DOWN Head and Shoulders Top, target $74.57.
SSEC & Weekly DOWN *Double Top, target 2166.
EEM & Weekly DOWN  
XIU & Weekly DOWN Double Top, target $17.69.
DAX & Weekly DOWN
TLT & Weekly UP  
UUP & Weekly DOWN  
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, 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.
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