10/20/2010 大盘回顾 （Reversal of Reversal）

Cobra

TREND MOMENTUM COMMENT Long-term 2 of 2 are BUY   Intermediate 3 of 3 are BUY 3 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode. Short-term Model is BUY but not confirmed yet. 6 of 6 are NEUTRAL The trend is up but not confirmed so I hold no long position overnight. GANN DAY MOON:SOLAR CYCLE CONCLUSION 10/26 10/22 : 10/23 Next pivot date: 10/21 – 10/22, 10/25 – 10/27, 11/04

BULLISH 0.1.1 SPX Intermediate-term Trading Signals: Head and Shoulders Bottom breakout, target 1242. 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months. 10/01 Market Recap: Positive September plus mid-term election means 11%+ up to year end. 10/05 Market Recap: 16 more trading days upswing? BEARISH *1.0.6 SPY Unfilled Gaps: 20 unfilled gaps, the max was 20. 10/15 Market Recap: AAII bull ratio (4-week average) too bullish. 10/15 Market Recap: Commercial (smart money) short Nasdaq 100 heavily according to COT Report. 10/08 Market Recap: Up off-season usually means down earning season. 10/15 Market Recap: Institutions are selling into strength. 6.2.3 VIX:VXV Trading Signals: Record low. 0.2.2 Extreme Put Call Ratio Watch: CPCI too high, topped? 6.2.2a VIX Trading Signals (BB): Short setup triggered on 10/13. 10/13 Market Recap: % SPX stocks 1 std dev above MA(50) is too high. 6.1.9a Extreme ISEE Index Readings Watch: SPX will close below 1176 within 2 days? 10/15 Market Recap: ISEE Index is way too high. 10/19 Market Recap: AAPL is way too stretched. 10/15 Market Recap: Euro may retreat which may cause US$ carry trade unwind. 6.4.2c Extreme TICK Readings Watch: TICK too low, lower low or lower close ahead? 1.0.0 S&P 500 SPDRs (SPY 60 min): Double Top, target $114.77. Failed!  10/19 Market Recap: IBM dropped after ER may mean SPX will be red in 5 weeks.

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING PLATFORM: SSO/SDS, UPRO/SPXU Non-Stop 09/07 L N/A Partial profits on 09/24. ST Model 09/24 L 10/07 Low

 

P.S. No After Bell Quick Summary today as I really don’t have much to say other than wait for tomorrow.

 

SHORT-TERM: REVERSAL OF REVERSAL IS COMMON ON A MARKET TOP, SO LET’S SEE TOMORROW

 

今天大反弹暂时不说明什么问题，因为通常在一个筑顶的过程中我们会看见很多个reversal of the previous reversal of the previous reversal （涨一天跌一天涨一天跌一天的情况）所以明天会不会reversal of reversal of reversal，还要wait and see。至少下面SPY 60 min chart还不能排除bearish Rising Wedge breakdown then kiss channel goodbye的情况，所以看明天吧。

 

 

此外今天的上涨也没有破坏昨天提到的extreme low TICK reading almost guarantees an immediate lower low or lower close的统计。跟昨天的图比，下面的图只保留了第二天大反弹的情况，可以看到，red dashed lines还是远远多于green dashed lines。

 

 

Follow up一下，昨天提到的back to back unfilled gap，今天并没有完全fill，因此明天如果gap down open的话，可能熊熊不能指望这个gap能hold。恩，熊熊早就不指望哪个gap能hold了，所以可能我说的也是废话，呵呵。

 

 

INTERMEDIATE-TERM: BEARISH BIASED, PIVOT DATE EITHER AROUND 10/22 OR 10/26 OR 11/04

 

Maintain the intermediate-term bearish view, the pivot date could be either around 10/22 or 10/26 or 11/04, see 10/15 Market Recap for more details. Below are summaries of all the arguments supporting my intermediate-term bearish view:

1. As mentioned in 10/15 Market Recap, commercial (smart money) holds record high short positions against Nasdaq 100.
2. As mentioned in 10/15 Market Recap, AAII bull ratio (4-week average) is way too bullish.
3. As mentioned in 10/15 Market Recap, institution selling keeps increasing.
4. As mentioned in 10/08 Market Recap, statistically, a strong off-season could mean a weaker earning season.
5. As mentioned in 10/11 Market Recap, statistically VIX at 1 month low going into October was not a good sign.
6. As mentioned in 10/15 Market Recap, US$ may rebound which is not good for the broad market.
7. As mentioned in 10/19 Market Recap, IBM dropped after ER may mean SPX red in 5 weeks.
8. As mentioned in 10/19 Market Recap, AAPI MACD is now too stretched which could mean a top for QQQQ.

SEASONALITY: NO UPDATE

 

For October Seasonality chart please refer to 10/01 Market Recap.

 

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

1. The market appears a little stretched as lots of ETFs weekly %B are way too high.
2. With possible Euro pullback, watch potential weakness on commodity related ETFs like XLE, XLB and XIU.TO.

	TREND	COMMENT
QQQQ	*LA
NDX Weekly		NDX to SPX ratio too high. %B too high. Neither had any edges though.
IWM	DOWN
IWM Weekly		%B too high.
CHINA		Rejected by downtrend line, watch…
CHINA Weekly		Extremely high %B.
EEM	DOWN
EEM Weekly		EEM to SPX ratio too high, %B too high. Neither had any edges though.
XIU.TO	*LA	TOADV MA(10) too high.
XIU.TO Weekly		Fib 61.8% plus %B too high with negative divergence.
TLT	UP	1-2-3 trend change? So TLT could be in an intermediate-term downtrend. Be careful.
TLT Weekly
FXE	*UP
FXE Weekly		Stalled at Fib confluences area, %B too high with negative divergence, too high above MA(40).
GLD	DOWN
GLD Weekly		%B too high.
GDX	DOWN	On support, BPGDM sell signal though.
GDX Weekly		GDX to SPX ratio too high, %B too high with negative divergence.
USO	*UP
WTIC Weekly
XLE	*LA
XLE Weekly		%B too high with negative divergence.
XLF	*UP
XLF Weekly		Head and Shoulders Top in the forming?
IYR	*UP
IYR Weekly		Home builders are lagging.
XLB	*UP
XLB Weekly		%B too high with negative divergence.

1. Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.
2. Position reported in short-term session of the table above is for short-term model only, I may or may not hold other positions which will not be disclosed.
3. Conclusions can be confirmed endlessly, but trading wise, you have to take actions at certain risk level as soon as you feel the confirmation is enough. There’s no way for me to adapt to different risk levels therefore offer no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
4. * = New update; Blue Text = Link to a chart in my public chart list; UP/DOWN = Short-term trend; L A = Lateral Trend

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