07/05/2011 Market Outlook (Firework)


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SHORT-TERM: STILL A LITTLE OVERBOUGHT

Two cents:

  1. The pullback today wasn’t enough because my ultimate weapons for watching overbought/oversold are still mostly overbought, so still a pullback is just a matter of time.
  2. What the market will be doing the next would look like a firework – shoot high then fall back to the ground where it starts. The fall back, however is the 2nd buy opportunity. I will discuss this in details in the intermediate-term session.

Listed below are two of my ultimate weapons for watching overbought: T2122 and NYMO. They’re still pretty overbought, so I still think a pullback is just a matter of time.

T2122NYMO

INTERMEDIATE-TERM: BULLISH JULY

The very unique thing today is SPX body completely out of its BB top which I’ve already discussed in 11/05/2010 Market Recap. So, to save time, I won’t redraw the chart today, instead just replaced the last chart with the most recent one. From the statistics below we can see, all such cases thereafter were undergoing a pattern similar to the firework – shot high then fell to the ground which may provide the 2nd buy opportunity:

  1. Intermediate-term should have more up room,  average 3.4% and could last on average 21 calendar days.
  2. With no exception, after shooting high (a small number cases didn’t have the shooting high), all fell to where the shooting started. I’ve zoomed into all the cases so you can clear see that the fall to the ground was actually the 2nd buy opportunity.
  3. From the monthly chart, except the November 2010 case (not shown on the chart), we can see, all the months that had SPX body completely out of its BB top were an up month. So this is another evidence to support the forecast I made in 07/01 Market Outlook that we’d have a bullish July.

Firework

SEASONALITY: BULLISH JULY

See 07/01 Market Outlook for July seasonality chart.

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

  TREND MOMENTUM COMMENT
Long-term 2 of 2 BUY
Intermediate 4 of 5 BUY 4 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term 4 of 6 OVERBOUGHT
  TREND COMMENT
QQQ & Weekly UP NAMO and NAADV MA(10) overbought.
IWM & Weekly UP
SSEC & Weekly DOWN  
EEM & Weekly UP
XIU & Weekly DOWN *Bearish reversal bar plus TOADV MA(10) overbought, be careful.
*1.5.9 TSE McClellan Oscillator: Overbought.
DAX & Weekly UP
TLT & Weekly DOWN  
UUP & Weekly DOWN Double Top, target $20.86.
GLD & Weekly DOWN  
USO & Weekly DOWN  
XLE & Weekly UP  
XLF & Weekly UP
IYR & Weekly UP  
XLB & Weekly UP  
  • * = 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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