*Please make sure you understand how to use the table above. The main purpose of this report is to provide information so contradictory signals are always presented.
SEASONALITY: NO UPDATE
SPX TIME AND TARGET ANALYSIS: THE PULLBACK COULD LAST TO 05/23
See 05/10 Market Recap for more details.
INTERMEDIATE-TERM: 05/06 LOW WILL BE BROKEN BUT NO EVIDENCE SAYS THIS IS A START OF A NEW BEAR MARKET
See 05/07 Market Recap for more details.
WARNING: If you don’t understand the true meaning of overbought/oversold, please skip the session below. Generally, you should try your best not to trade against the trend. Trading purely based on overbought/oversold while against the trend is lethal to the health of your account. Before going further, please make sure you understand how to use the table above.
SHORT-TERM: PAY ATTENTION TO 1-2-3 FORMATION SETUP
The drop today may mean nothing, the market direction is still not clear, although still temporarily maintain the forecast for expecting a 2nd leg down to test 05/06 low.
0.2.0 Volatility Index (Daily), VIX chart is a little bit ugly because Hammer has 60% chances of leading to a bullish reversal which is not good for the broad market. It needs a confirmation tomorrow though.
0.2.1 10Y T-Bill Yield, some people may disagree, but to me, this chart doesn’t look good as 4 reversal bars were formed under an important resistance. If yield pullback so will the broad market. Don’t neglect the yield, from my experiences, the yield always leads the market.
Take a look at the chart below if interested, because I often mention 1-2-3 formation, so I’d like to take this chance to tell you a little about the typical trading setup for this pattern. However, by no means, I imply that you should short, just I really don’t have anything else to say today.