SHORT-TERM: COULD SEE MORE PULLBACK, A REMINDER OF USUAL AAPL POST ER PATTERN

Three cents:

  1. Could see more pullbacks ahead. However, there’re some chances the market sell off in the morning but rebound to close in green eventually.
  2. Temporarily maintain the call that the pullback is a buy opportunity. However, besides the experiences, I don’t have any solid evidences to support such a judgement. And unfortunately, I also don’t know if there’s any good way to know, as early as possible, whether the rebound since the Oct 4th was over or it is a buyable dip, so I’m afraid the report for the following days may just be a guess game. Basically: 
    • As long as we don’t see 3 consecutive down days then the trend is clearly up, because a strong uptrend should never have 3 consecutive down days. That said, even we do see 3 consecutive down days, it doesn’t prove that the rebound was over, it only argues that so far we had is just a rebound that my dream yacht would have to wait longer before possible.
    • The rebound since the Oct 4th is very strong so it’s really rare such a rebound is just one legged, therefore at minimum the Friday’s high shall be revisited, which already is the worst case mention in the 10/14 Market Outlook after a Selling Climax.
  3. AAPL ER in AH tomorrow, I just want to remind you the usual AAPL post ER pattern is fireworks that it skyrockets high then falls back to the ground in a few days.

Why could see more pullbacks ahead? Because today is a Major Distribution Day, which in another word is, for such a strong down momentum, it’s rarely just one day’s event.

LLGuaranteed

Why could the market eventually close in green tomorrow? Because although SPX dropped 1.9%+, but TICK closed above 0, statistically, it seems bulls have a little edges tomorrow. Well, 81% chances are not “a little edges” but using SPY to do the back test would have totally different story which implies the green or red close might be just a cent or two differences for SPY relative to today’s close.

SPXBigDownTICKUp

The chart below clearly demonstrates the usual AAPL post ER fireworks. In addition a 3 Push Up pattern could be in the forming, which if indeed, may imply the pullback may not be small.

AAPL

INTERMEDIATE-TERM: WE COULD SEE MULTIPLE WEEKS RALLY BUT MAINTAIN SPX DOWNSIDE TARGET AT 1,000

For why we could see multiple weeks rally, please see 10/14 Market Outlook for details.

For why SPX downside target at 1,000, please see 08/19 Market Outlook and 09/30 Market Outlook for details.

SEASONALITY: BULLISH MONDAY, BEARISH FRIDAY

According to Stock Trader’s Almanac:

  1. Monday before October expiration, Dow up 25 of 30.
  2. October expiration day, Dow down 5 straight and 6 of last 7.

See 09/30 Market Outlook for October day to day seasonality chart.

SUMMARY OF SIGNALS:
TREND MOMENTUM COMMENT
Long-term 3 of 3 SELL
Intermediate 3 of 5 BUY 5 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term *Unclear 6 of 6 NEUTRAL
* = New update.

 

 

Chinese Transcript

SHORT-TERM: COULD SEE MORE PULLBACK, A REMINDER OF USUAL AAPL POST ER PATTERN

三点说明:

  1. 应该还没有跌完,不过,不排除明天早盘跌,但是尾盘拉起收绿的可能。
  2. 暂时维持pullback是买的结论。关于这一点,我没有什么证据,纯粹是经验。很遗憾,我也不知道有什么方法可以尽早的判断出来,自10月4号以来的反弹已经结束了,还是这仅仅是个buyable dip,所以后面只能连猜带蒙。基本上:
    • 只要不连跌3天,那么上升趋势就没有问题,因为一个强上升趋势是不会出现连跌3天的情况的。当然,既使连跌3天,也不能说明反弹结束了,只是证明这仅仅是个反弹,我那艘梦中的yacht可能暂时就不要想了。
    • 10月4号以来的反弹非常强,只有一条腿就结束,是非常非常少见的情况,因此周五的high至少还会去一下的,这个已经是在10/14 Market Outlook里提到的Selling Climax最坏的情况了。
  3. 明天盘后AAPL ER,注意AAPL post ER通常是放焰火,冲上去,然后过几天又会掉下来。

为什么说还没有跌完?因为今天是Major Distribution Day,换句话说,这么大的下跌动能,不可能一天就到底了。

LLGuaranteed

为什么不能排除明天尾盘拉起收绿的可能?因为今天虽然SPX跌了1.9%,但是TICK却收在0以上,统计上看,明天牛牛还是有一点点edge的。81%不是一点点edge,之所以这么说是因为用SPY测试就没有这么明显的edge了,这说明可能明天收绿或者收红仅仅是SPY一到两分钱的差别,不会大红大绿。

SPXBigDownTICKUp

下面的图应该充分说明AAPL ER后放焰火的情况了。此外,图上看,有3 Push Up的可能,如果是真的话,此后的pullback不会小。

AAPL

INTERMEDIATE-TERM: WE COULD SEE MULTIPLE WEEKS RALLY BUT MAINTAIN SPX DOWNSIDE TARGET AT 1,000

For why we could see multiple weeks rally, please see 10/14 Market Outlook for details.

For why SPX downside target at 1,000, please see 08/19 Market Outlook and 09/30 Market Outlook for details.

SEASONALITY: BULLISH MONDAY, BEARISH FRIDAY

According to Stock Trader’s Almanac:

  1. Monday before October expiration, Dow up 25 of 30.
  2. October expiration day, Dow down 5 straight and 6 of last 7.

See 09/30 Market Outlook for October day to day seasonality chart.

SUMMARY OF SIGNALS:
TREND MOMENTUM COMMENT
Long-term 3 of 3 SELL
Intermediate 3 of 5 BUY 5 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term *Unclear 6 of 6 NEUTRAL
* = New update.