04/21/2009 Market Recap: Watch SPX 875

	Trend	Momentum	Comments - Sample for using the trend table. Warning: This is NOT a trading recommendation!
Long-term	Down		Idea for trading intermediate-term under primary down trend.
Intermediate	Up	Overbought	According to $NYA50R and $CPCE, the market might be topped.
Short-term	Down	Neutral to overbought*

Report Focused On	Buyable dip or the market topped?
Today’s Summary	Bulls need to break above SPX 875 tomorrow to prove themselves. Expect a pullback at least tomorrow morning.

Today’s rally is expected, and I still expect further big correction on the way. Let’s review 8.0.3 Use n vs n Rule to Identify a Trend Change 2008, note the red circles on the chart, the last stage of the uptrend is usually range bounded. After several rounds of N vs N if bears claim the victory, the uptrend is changed to the downtrend. Now bears just won the first round of 3 vs 1.

7.1.0 Use n vs n Rule to Identify a Trend Change. One down day vs one up day, bears probably won. Why don’t I say bears win today? As mentioned in previous reports, higher high overrides anything else, so uptrend would be intact if bulls could push SPX higher than 875 tomorrow. What about bulls made 875 the day after tomorrow? Well, if bulls took three days to cover the one day damage caused by bears, the uptrend should be considered as weakening.

1.0.4 S&P 500 SPDRs (SPY 15 min). The rally stopped right at Fib 50 and was rejected by MA200. STO is overbought and formed a negative divergence. Therefore the market should at least pull back tomorrow morning.