07/22/2011 Market Outlook (7 Days Rule)


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SHORT-TERM: IN WAIT AND SEE MODE

Nothing new, if disregard the debt ceiling news in Friday’s AH and the market actions, the chart pattern looks very bullish.

SPY60min

As mentioned in Friday’s Trading Signals, simply from the way unions do negotiation, not until 08/02 deadline, there won’t be any deal, so chances are there won’t be any good news in this weekend, therefore I’m not sure if the Monday market would continue the Friday’s AH trend to pullback more. But no matter what, better Monday eventually closes in green, because according to the 7 days rule as illustrated below, that a strong push up from an important bottom should be up 6 out of 7 days, while we’ve already got one red day, so the following 3 consecutive days are supposed to be up. In another word, the Monday has to be green, otherwise chances are the 07/18 low will be broken eventually as it’s proven to be not an important bottom.

7DaysRule

The market is in a little mass recently, so I’d like do a little summary about all my active outlooks below:

  • Remember to always check the ACTIVE BULLISH/BEARISH OUTLOOK session below, in summary, my crystal ball says, July should close in green and SPX shall have a new high (May not in July though), while in short-term, there should be a pullback of some kind. Which one of them are correct or the better (and possibly) all of them are correct, we’ll know the next week.
  • From the past AAPL post ER pattern, I believe AAPL will fall to the ground (at least around the price level before the ER) soon, especially, its MACD now is way too stretched, and therefore accordingly, I don’t think QQQ would go to galaxy far far away, especially if you’ve noticed the huge divergence between QQQ and SOX where SOX supposes to lead.

AAPLERPatternAAPLTooStretchedNDXWeekly

INTERMEDIATE-TERM: BULLISH JULY

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

SEASONALITY: BEARISH FRIDAY BUT BULLISH WHOLE WEEK

According to Stock Trader’s Almanac, last trading day in July, Nasdaq down 5 years straight. But from the chart below, it seems the last trading week of the month since the August 2010 was mostly bullish.

LastWeekOfMonth

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 4 of 5 BUY 5 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in *BUY mode.
Short-term UP 6 of 6 NEUTRAL
  TREND COMMENT
QQQ & Weekly UP  
IWM & Weekly UP  
SSEC & Weekly UP  
EEM & Weekly *UP
XIU & Weekly *UP
DAX & Weekly *UP  
TLT & Weekly DOWN  
UUP & Weekly DOWN
GLD & Weekly UP  
USO & Weekly *UP  
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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