10/29/2010 大盘回顾 （Consolidation was generally not good for bulls）

Cobra

TREND MOMENTUM COMMENT Long-term 2 of 2 are BUY   Intermediate 2 of 3 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode. Short-term Model is BUY 6 of 6 are NEUTRAL The trend is up, I hold both long and short over the weekend. GANN DAY MOON:SOLAR CYCLE CONCLUSION 10/26, 11/04 11/06 : 11/07 Next pivot date: 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? 10/26 Market Recap: Average 2.7% gain during the 8 trading days surrounding midterm election. 10/29 Market Recap: The last 2 months of year are bullish. BEARISH 1.0.6 SPY Unfilled Gaps: 20 unfilled gaps, the max was 21. 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. 10/22 Market Recap: Institutions are selling into strength. 10/19 Market Recap: AAPL is way too stretched. 10/15 Market Recap: Euro may retreat which may cause US$ carry trade unwind. 6.4.0 SPX and NYMO Divergence Watch: New high on negative NYMO readings, topped? 4.1.0 S&P 500 Large Cap Index (Weekly): NYSI STO(5,3,3) sell signal. 6.1.9b Extreme ISEE Index Readings Watch: ISEE Indices & ETFs Only Index <= 30, top close?

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 10/19 Low NYMO Sell 10/28 S 2*ATR(10) Reference only, not meant to be followed.

 

P.S. The weekend report is delayed because I spent lots of time on Mechanical Trading Systems for ETFs. From now on I’ll give those signals in the ETF table at the end of my daily recap. I think this is one step forward for an objective analysis which unlike before that I had to manually judge if the trend is up or down and because of different time frame, the info was rather useless and in case you’ve noticed that I’ve vacillated between different ways of giving specific signals for quite a long time. I sure hope this’ll be the last time I vacillate around.

 

SHORT-TERM: CONSOLIDATION, THE DIRECTION IS NOT CLEAR, BUT I’M BEARISH BIASED

 

SPX在1184附近盘了两周了，下周FOMC以后是牛还是熊就该见分晓了。尽管理论上，盘整后突破的方向是双向的，但是从下面的图看，通常盘整是对SPX不利的。还记得，我在10/05 Market Recap里提到的16 trading day up swing吗？Well, it’s fulfilled on 10/27，现在又是个7 bar consolidation。

 

 

从Weekly chart看，it’s now way too stretched，因此，赌下周向上突破狂涨，确实需要点想象力。

 

 

从时间角度分析，也是pivot high在11/04 to 11/08之间的可能性比较大。

1. Multiple Gann Day due from 11/04 to 11/08.
2. Day 6 of each month since year 2000 was more likely a pivot day.
3. New Moon on 11/06.
4. Solar Term date on 11/07.
5. Non Farm Payroll on 11/05 which according to 6.5.1b SPX and NFP was more likely a pivot day.

 

根据上面的图，还有一种可能性，就是pivot high on 10/25，也就是说top was in了。这个，我不清楚，不过单从Euro看，似乎还有一攻。当然从UUP的volume surge看，Euro的上攻，很可能是最后一攻了。另外，上面的图的第三种可能，就是up to 11/12 and SPX 1215，目前我暂时还不具备这个想象力，反正这个是11/04以后的事情了，可以先放放。

 

 

总结一下，就是下周（或下下周初）是pivot high的可能性比较大。I expect a pullback。至于这个pullback是short-term还是intermediate-term，则到时候再看吧。

 

INTERMEDIATE-TERM: BEARISH BIASED, PIVOT DATE EITHER ON 10/25 OR AROUND 11/04

 

Maintain the intermediate-term bearish view. We may have passed the pivot day on 10/25 or the next pivot day could be 11/04. 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 10/22 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 10/22 Market Recap, NYSI Weekly STO(5,3,3) sell signal means choppy ahead.

Below are some of the most recent charts mentioned above.

 

 

SEASONALITY: LAST 2 MONTHS OF YEAR ARE BULLISH

 

The chart below is from Bespoke, should be clear enough.

 

 

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

	SIGNAL	COMMENT
QQQQ	10/15 L
NDX Weekly		%B too high with negative divergence. NASI weekly STO(5,3,3) sell signal.
IWM
IWM Weekly
CHINA	07/15 L	Primary downtrend line breakout not confirmed.
CHINA Weekly		*High %B with negative divergence plus stalled under primary bear trend line. Pullback?
EEM		*Could be a Symmetrical Triangle in the forming, so one more push up?
EEM Weekly
XIU.TO	08/31 L
XIU.TO Weekly		Testing Fib 61.8%.
TLT		1-2-3 trend change confirmed, the intermediate-term trend is down. ChiOsc is too low though.
TLT Weekly
FXE		*Could be a Symmetrical Triangle in the forming, so one more push up? Pay attention to volume surge on UUP, US$ may very close to a bottom.
FXE Weekly		Stalled at Fib confluences area.
GLD		*Watch for potential 1-2-3 trend change! Bump and Run Reversal in the forming?
GLD Weekly
GDX	10/29 L	*Watch for potential 1-2-3 trend change!
GDX Weekly
USO		*Could be a Bull Flag in the forming.
WTIC Weekly
XLE	06/15 L
XLE Weekly		%B too high with negative divergence.
XLF	10/15 L
XLF Weekly		Head and Shoulders Top in the forming?
IYR		*Testing trend line support.
IYR Weekly		Home builders are lagging.
XLB	10/20 S
XLB Weekly

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 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
5. Trading signals in OTHER ETFs table are mechanical signals. See HERE for back test results. 

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