SHORT-TERM: EXPECT REBOUND SOON, BUT REBOUND, IF ANY, IS SELL
- Rebound, as early as tomorrow, no later than 3 trading days. The rebound size might not be small.
- Rebound, if any, is sell.
- Ironically, a red close tomorrow is actually good for bulls.
Everyone knows the market is oversold, therefore a rebound is just a matter of time. The question is when? My guess is tomorrow the earliest or no later than 3 trading days. The chart below is my main witness. NYSE Down Volume to NYSE Up Volume Ratio >= 35, seems a tradable bottom within 3 trading days.
Listed below are all the other heavy weight evidences arguing for a rebound. They’re no ordinary signals therefore are more reliable.
- Usually a huge rebound after 3 Major Distribution Days. This even worked in year 2008, perhaps at that time was the only chart that worked, so very reliable.
- NYMO extremely oversold.
- Too many Sentimentrader Indicators are arguing for a rebound.
Why, rebound if any, is sell? I’ve been blah blah this for quite a time. It’s the law of inertia, NYMO new low means the downward movements are still accelerating, therefore very hard to reverse immediately. A visible NYMO positive divergence implies, a sizeable rebound then lower low while at the same time no new low on NYMO.
The chart below is another reason for sell, if rebound right away tomorrow, a SPX lower close is almost guaranteed.
Why is a red tomorrow good for bulls? See chart below, a red Non Farm Payroll day tomorrow usually means a reversal which in the current case should mean a reverse up.
INTERMEDIATE-TERM: IN DOWNTREND, HEAD AND SHOULDERS TOP, TARGETING SEP 2010 LOWS
See 08/03 Market Outlook for more details.
SEASONALITY: BEARISH FIRST 9 TRADING DAYS OF AUGUST
ACTIVE BULLISH OUTLOOKS:
ACTIVE BEARISH OUTLOOKS:
SUMMARY OF SIGNALS FOR MY PUBLIC CHART LIST: