12/08/2011 Market Outlook (Lower Low Ahead)

SHORT-TERM: LOWER LOW AHEAD

Today, the market finally pulled back as I’ve been blah blah recently. And as mentioned in the previous reports, whether such a pullback is merely a dent in a strong uptrend or would revisit the Nov 25 lows, we’ll have to wait and see. The evil plan below shows what I’m relatively sure now, based on the evidences so far collected today:

1. Most likely we’ll see a lower low tomorrow.
2. After the lower low, we might see a huge rebound. I’m not sure if the rebound starts at tomorrow though.
3. Such a rebound would fail eventually, so today or tomorrow’s low, whichever is lower, will be revisited.

So accordingly, trading wise, the rebound, if indeed, might be a good sell opportunity.

The chart below is the major reason I made the evil plan above. SPY had 7 consecutive hourly red bars, which from the chart below we can see, mostly would go as what I mentioned above thereafter, with only 1 exception, where there’s no rebound at all. Here, I want to take the opportunity to say thanks again to all of you who have donated (aka membership fee), because of your bailout money, I finally got the president’s (you know whom) permission to upgrade the software. Believe me, you won’t see the chart below if without the upgrade. Also, because of your bailout money, we just leased a new server to run this web site, which is hundred times more powerful than our old server. All because of your supports, which I cannot say enough how grateful I am. In the future, with your monthly stimulus package, I’m sure I could do better and better, and I swear I won’t use your bailout money to buy private jet or offer myself a big year end bonus, I swear.

The charts below are the other evidences about lower low ahead. I believe most of you are already familiar with the theory behind – a strong down momentum cannot be reversed in just a day, so I won’t bother to blah blah again.

INTERMEDIATE-TERM: EXPECT MULTIPLE WEEKS SELLING AHEAD, TARGETING JUNE 2010 LOWS AROUND SPX 1010ISH

See 11/18 Market Outlook for more details.

Chinese Transcript

SHORT-TERM: LOWER LOW AHEAD

今天大盘终于如预期的一样回调了，前面的报告说了，这个回调只是个小dip还是去测试11月25的lows，目前还无法确定，所以只能等等看了。下面的图是目前比较能确定的走法：

1. 多半明天会有lower low先。
2. 然后多半会有大反弹，当然不确定是否是明天。
3. 大反弹完以后还会掉下来测试今天或者明天的low，whichever is lower。

所以操作上，这个大反弹多半是sell的机会。

下面的图是做出以上猜测的主要理由，SPY 7 consecutive hourly red bars，从图上看，绝大多数此后都是我上面提到的走法，只有一例是没有像样的反弹，直接跌下去了。这里，再次感谢大家，由于大家的捐款（membership fee），我得到我领导的许可，可以升级软件，你们看到的这幅图是软件升级后才能有的，此外我们前不久刚刚换了新的，非常强大的服务器，这些都要感谢大家的捐款。在大家的stimulus package的支持下，我相信我将做的更好，也保证不会用大家的bailout money来买private jet或给自己发big bonus。

下面的两个图是说还会有lower low，主要原理大家应该已经很熟悉了，这么大的下跌动能是不会一天就结束的，这里就不多说了。

INTERMEDIATE-TERM: EXPECT MULTIPLE WEEKS SELLING AHEAD, TARGETING JUNE 2010 LOWS AROUND SPX 1010ISH

See 11/18 Market Outlook for more details.