09/26/2011 Market Outlook (Up 2%+ But TICK Closed below 0)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: COULD SEE MORE REBOUND BUT MORE LIKELY THE LOW WASN’T IN YET

Maintain the forecast made on 09/23 Market Outlook, could see more rebound (15% chances, see back test below) but more likely lower low ahead.

As mentioned in the 09/23 Market Outlook, most likely the rebound won’t exceed the tinted area. Today’s rebound only proves it’s weaker than the previous 2 times, a and a’. Why? Because the current rebound already used up all the time measured by the width of the tinted area, unless SPX could jump above the tinted area within the 1st half hour tomorrow.

SPYEvilPlan

Is it possible the SPX jump over the tinted area at open tomorrow? Possibly, because in this YES WE CAN era, all bulls need are imaginations, so anything is possible, I cannot exclude such a possibility. However, purely from the chart, since the price is already too stretched above the BB top plus ChiOsc is way too high, so I double if we’d see a huge gap up tomorrow and even indeed, whether such a gap could hold is a question. This chart, by the way, is the reason why in today’s Trading Signals, I said I’d expect to see some weakness tomorrow morning. Please be noted, I didn’t say, according to this chart, tomorrow would be red, I just mean there could be a dip tomorrow morning.

SPY60min

A very suspicious thing today is SPX rose more than 2% but TICK closed below 0. The chart below shows most of the past similar cases. The 2% cases are very rare so all the 1% cases are highlighted, even so the back test still shows that tomorrow, the day after tomorrow, the day after the day after tomorrow and 2 weeks later WERE not so bull friendly.

  • Noticed the Gain/Loss Ratio for tomorrow and the day after tomorrow is as high as 5, which means the downside is 5 times more than the upside.
  • Noticed that the most cases happened in year 2007 and 2008 bear market.

SPXUp1PercentWhileTICKRed

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 FRIDAY

According Stock Trader’s Almanac, last day of Q3, Dow down 9 of last 13, massive 4.7% rally in 2008.

See 09/02 Market Outlook for September seasonality.

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

TREND MOMENTUM COMMENT
Long-term 3 of 3 SELL
Intermediate 4 of 5 SELL 3 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in SELL mode.
Short-term DOWN 6 of 6 NEUTRAL
  TREND COMMENT
QQQ & Weekly UP  
IWM & Weekly DOWN  
SSEC & Weekly DOWN  
XIU & Weekly DOWN
DAX & Weekly DOWN  
TLT & Weekly UP  
UUP & Weekly UP  
GLD & Weekly DOWN  
USO & 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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