07/20/2011 Market Outlook (Could see some weakness ahead)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: COULD SEE SOME WEAKNESS AHEAD

Could see more pullbacks ahead, at least short-term, may not start from tomorrow though. My guess is the 07/18 lows will at least be revisited, either with higher low or lower low. An important bottom usually has 2 legs to be stable, so the 07/18 bottom still looks missing one leg, if indeed it was the bottom.

BackTestPreviousLowRequired

Listed below are all the major reasons why I expect more pullbacks ahead.

  • A Bearish Reversal Bar formed on the SPY daily chart, the chart below should be clear that in most cases (red arrows are far more than blue arrows) it means at least a few days pullback ahead.

BearishReversal

  • ISEE Indices & ETFs Only Index closed at 182 today (retailers are extremely bullish), short at close today and hold until the very first red day since the inception of ISEE Indices & ETFs Only Index in 2005, you have 73% chances.

ISEEIndex

  • The MACD of AAPL daily chart is way too extreme, see dashed red lines, it should mean pullback on AAPL and therefore QQQ ahead. Besides the AAPL daily bar today looks a lot like an exhaustion bar, so chances are that AAPL is topped or very close.

AAPLTooStretched

  • As mentioned in 07/19 Market Outlook, SPY up 1.6%+ but NYSE Up Volume : Down Volume < 6, the following week was a little bearish biased.
  • As mentioned in 07/18 Market Outlook, 2 Major Distribution Day within 5 days means short-term rebound (indeed) then 11 out of 13 chances more selling thereafter.

 

INTERMEDIATE-TERM: BULLISH JULY

See 07/01 Market Outlook and 07/05 Market Outlook for more details.

SEASONALITY: BEARISH NEXT WEEK

According to Stock Trader’s Almanac, week after July expiration, Dow down 7 of last 12, 2007 –4.2%, 2008 –4.3%, but up 4.0% in 2009.

Also 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 3 of 5 BUY 5 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in SELL mode.
Short-term UP 6 of 6 NEUTRAL
  TREND COMMENT
QQQ & Weekly UP  
IWM & Weekly UP  
SSEC & Weekly UP  
EEM & Weekly DOWN
XIU & Weekly DOWN
DAX & Weekly DOWN  
TLT & Weekly DOWN  
UUP & Weekly DOWN
GLD & Weekly UP  
USO & Weekly DOWN  
XLE & Weekly UP  
XLF & Weekly DOWN
IYR & Weekly UP 4.4.3 Real Estate iShares (IYR Weekly): XHB lags, be careful.
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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