08/09/2011 Market Outlook (Major Accumulation Day after Major Distribution Day)


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SHORT-TERM: EXPECT THE REBOUND TO FAIL EVENTUALLY

Maintain the call that the rebound eventually will fail. I’ve been mentioning lots of reasons in 08/02 Market Outlook, 08/05 Market Outlook and 08/08 Market Outlook, so won’t blah blah here again. That said, the market is always right, so I’m always ready to admit the error. The chart below is a simply rule to judge if indeed the low was in: Usually when market rose from an important bottom, it’d be very strong and up 6 out of 7 days, so if the market rises huge again tomorrow, then bears better be prepared that the low was in.

7DaysRule

So will the market rise huge tomorrow? So far I don’t think chances are high. I’ve mentioned one reason in today’s Trading Signals that when VIX dropped more than 18%, chances are very high, a red day tomorrow. In addition, since yesterday was a Major Distribution Day followed immediately by a Major Accumulation Day today so chances are high too, a red day tomorrow. The reason I didn’t mention this in today’s Trading Signals is because the chart also implies that today’s low will likely be revisited.

VIXDrop18PercentMADafterMDD

INTERMEDIATE-TERM: CONCEPT ONLY, THE WORSE CASE SPX DOWNSIDE TARGET  IS 1,000

See 08/05 Market Outlook for more details.

SEASONALITY: BEARISH FIRST 9 TRADING DAYS OF AUGUST

See 07/29 Market Outlook for more details. Also please see 07/29 Market Outlook for day to day August seasonality chart.

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

TREND MOMENTUM COMMENT
Long-term 2 of 3 SELL
Intermediate 5 of 5 SELL 3 of 5 NEUTRAL Cobra Impulse in SELL mode; Non-Stop in SELL mode.
Short-term DOWN 5 of 6 *NEUTRAL
  TREND COMMENT
QQQ & Weekly DOWN Triple Top breakdown, targeting Oct lows.
IWM & Weekly DOWN  
SSEC & Weekly DOWN  
EEM & Weekly DOWN  
XIU & Weekly DOWN 1.5.9 TSE McClellan Oscillator: Oversold.
DAX & Weekly DOWN  
TLT & Weekly UP  
UUP & Weekly DOWN
GLD & Weekly UP  
USO & Weekly DOWN  
XLE & Weekly DOWN 4.4.1 Energy Select Sector SPDR (XLE Weekly): BPENER oversold.
XLF & Weekly DOWN 4.4.2 Financials Select Sector SPDR (XLF Weekly): Breakdown long term support!
IYR & Weekly DOWN  
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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