Cobra's Market View Private Messaging System shows:
SHORT-TERM: IN WAIT AND SEE MODE
- No idea about tomorrow. Just as mentioned in today’s Trading Signals, FOMC day tends to be a green day 73% of the time.
- FOMC tomorrow, the general intraday pattern is up until 2:15pm ET announcement, then rollercoaster show.
- The big picture, 2 down days within 7 days, so this rebound is not even a strong rebound as measured by 7 Days Rule, therefore one more evidence arguing that this is (was) just a rebound. Again, as I said many times, a conclusion can be confirmed and confirmed until too late, so you must decide when to take actions when signals are confirmed to a certain risk level that you feel enough convinced.
- Cannot exclude the possibility that the high was in or very close. Such a high, however, could be just a short-term or even an intermediate-term which I don’t know yet, need see the following few days.
The following charts are my main reasons why I cannot exclude the possibility that the high was in or very close:
Today, we had a gap up, higher high then closed in red so it’s a bearish reversal day. From the chart below, such a day was very likely at least a short-term top. Especially, it’s used to be just one blue arrow at most, the SPX would pullback immediately after the next Bearish Reversal Day (red arrow). While this time, we’ve already had 2 consecutive blue arrows, my question is: Will the 3rd time be a blue arrow again (i.e. no immediate pullback tomorrow)?
SPX made a higher high today (just tiny little bit, but still is higher high), but VIX didn’t make a lower low, and it had 2 consecutive reversal like bars (Black bar and Hammer). Since generally, VIX leads, so this could imply that SPX is about to turn down.
The 3rd reason is very subtle. RSP is an equal weighted SPX ETF, so when RSP lags, it means the push up was mainly due to a few heavy weighted stocks, therefore is suspicious. You can also take a look at $VLE and $NYA, obviously they are further from the previous Swing High than that of SPX which also argues that the quality of the current rally is suspicious.
INTERMEDIATE-TERM: SPX DOWNSIDE TARGET IS 1,000, THE CORRECTION COULD LAST 1 TO 2 MONTHS
See 08/19 Market Outlook for details.
SEASONALITY: BEARISH WEEK
See 09/02 Market Outlook for September seasonality.
SUMMARY OF SIGNALS FOR MY PUBLIC CHART LIST: