Summary:
Despite very bullish seasonality, the market may not be able to go up much because there're too few bears.
Could be more pullback ahead.
| TREND | MOMENTUM | EMOTION | COMMENT - Sample for using the trend table. | |
| Long-term | Up | Disbelieve | ||
| Intermediate | Down | Neutral | ||
| Short-term | *Down | Neutral | ||
| SPY SETUP | ENTRY DATE | INSTRUCTION | STOP LOSS | Mechanic trading signals for reference only. Back tested since 2002. |
| ST Model | 12/10 L |
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*Stopped out of long position flat on 12/17 | |
| Reversal Bar | 12/10 L |
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*Stopped out of long position flat on 12/17
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| NYMO Sell |
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| VIX ENV | ||||
INTERMEDIATE-TERM: BULLISH SEASONALITY BUT MARKET MAY NOT UP HUGE
Nothing new, see 12/14/2009 Market Recap and 12/16/2009 Market Recap for more details. Seasonality is very bullish but there’re simply too few bears left, so I suspect how high the market could go. Today’s AAII survey shows again too few bears. It doesn’t mean a top but certainly it agrees that there’s not much upside room left.
SHORT-TERM: COULD BE MORE PULLBACK AHEAD
The QQQQ black bar mentioned in yesterday’s report is confirmed today. Take a look at the chart below, what happened in the past when a black bar was confirmed by a big red bar?
INTERESTING CHARTS:
1.4.0 Shanghai Stock Exchange Composite Index (Daily), the rule is simple, whenever there’s a big (I mean really big) red bar, there’d be more pullbacks ahead.
