Cobra's Market View Private Messaging System shows:
SHORT-TERM: MORE PULLBACK AHEAD
The market rose from beginning to the end, feels very bullish, however a little bit bigger picture, it’s just a Bear Flag in the forming, so I tend to believe the pullback isn’t over yet. That said, I don’t have enough evidences to exclude the possibility that there’s still a 3rd push up left. (I should pretty much exclude the possibility of the route YES WE CAN, please see 09/02 Market Outlook for more details.)
The chart below is the main reason why I believe it’s the Bear Flag case. It’s basically the law of inertia, a forward accelerating car cannot be reversed without slowing down first. The RSI new low means the downward push is accelerating therefore the chances are rare that the low was in today.
An unique thing today is SPY dropped more than 0.7%, why retailers were very bullish, they bought lots of equity calls so as the result the ISEE Equities Only Index closed at 233 which is pretty high readings. The chart below, highlighted in red, are all the similar cases in the past since the inception of the ISEE Equities Only Index (starting from year 2005). Looks to me, very likely a lower low tomorrow (with only 1 past exception), besides, none of the case was the bottom, some simply went straight down and some after a rebound then continued down again.
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: BULLISH TUESDAY, BEARISH SEPTEMBER
According to Stock Trader’s Almanac, day after Labor Day, Dow up 13 of last 16, 1997 up 3.4%, 1998 up 5.0%.
See 09/02 Market Outlook for September seasonality.
SUMMARY OF SIGNALS FOR MY PUBLIC CHART LIST: