08/31/2011 Market Outlook (Key Day Tomorrow)


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SHORT-TERM: IN WAIT AND SEE MODE

Key day tomorrow, the pullback, if any, shouldn’t be big otherwise it’s clearly price overlapping which only proves what we had so far is just a ZigZag rebound instead of an impulse wave up. I don’t have any solid evidences to talk you into believing whether it’s a huge up or huge down tomorrow, so will have to wait to see tomorrow. So far the evidences I’ve collected are not very bull friendly, chances for a pullback tomorrow is a little bit higher.

SPYEvilPlan

The chart below is my wild guess. For 2 days in a row, the intraday pullback was bought, if however, another intraday pullback tomorrow, then better don’t expect it to be bought again because the 3rd time is the charm.

3PushUp

There’re 3 reasons supporting my above guess. They’re far from 100% guaranteeing the above guess but are undeniably enough for me to make such a guess.

  • NYMO cannot go up forever and when the pullback indeed starts, it won’t be small.

NYMO

  • OEX Put Call Ratio surge, from the chart below, if such a surge happened after a few days upswing (red lines), most likely it would mean at least a short-term pullback.

OEXPC

  • Two reversal like bars on VIX daily chart may imply that VIX is about to reverse up.

VIX

INTERMEDIATE-TERM: SPX DOWNSIDE TARGET  IS 1,000, THE CORRECTION COULD LAST 1 TO 2 MONTHS

See 08/19 Market Outlook for more details.

SEASONALITY: BEARISH TUESDAY, BULLISH THURSDAY

According to Stock Trader’s Almanac:

  • August’s next-to-last trading day, S&P up only twice in last 14 years.
  • First trading day in September, S&P up 11 of last 15, back-to-back huge gains 1997 and 1998, up 3.1% and 3.9%.

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

ACTIVE BULLISH OUTLOOKS:

  • N/A

ACTIVE BEARISH OUTLOOKS:

  • N/A

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

TREND MOMENTUM COMMENT
Long-term 3 of 3 SELL
Intermediate 3 of 5 BUY 4 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term UP 5 of 6 *NEUTRAL
  TREND COMMENT
QQQ & Weekly DOWN  
IWM & Weekly DOWN  
SSEC & Weekly DOWN 4.1.4 Shanghai Stock Exchange Composite Index (Weekly): Long term support broken.
EEM & Weekly DOWN  
XIU & Weekly DOWN *1.5.9 TSE McClellan Oscillator: Overbought.
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): Long term support broken.
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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