06/16/2011 Market Outlook (Almost There)

SHORT-TERM: REBOUND THEN THE 3RD PUSH DOWN THEN BIGGER REBOUND

The 2 leg down pattern mentioned in yesterday’s report was fulfilled today, so now I should have a little credit to explain the pattern in more details: Take look at the chart again, watch carefully, well, the exact pattern should be 3 push down, shouldn’t it? So chances are there still is one more push down missing. Just before that, we’ll see a little bit stronger rebound first though.

The statistics about VIX closed above BB top for 2 consecutive days below also argues for rebound then pullback then rebound again.

By the way, I see people saying that today’s VIX is repeating that of 03/16/2011. Well, possibly, but isn’t also possible to repeat that of 02/23/2011? Also, according to the law of inertial, since closed above BB top for 2 consecutive days means a strong up momentum, therefore chances are high that after pullback into BB, there’ll be another attempt to break above BB top again. So basically, I believe the rebound we’re going to have is of short-term nature, while the intermediate-term has not bottomed yet.

If, unfortunately, another down day tomorrow, and if you have trapped longs, I think it might be the worst time to panic because all my ultimate weapons for watching oversold conditions are agian almost there now.

0.3.1 Normalized CPC

0.3.2 Normalized CPCE

T2116

T2122

Net % of All Sentimentrader Indicators at Extremes

INTERMEDIATE-TERM: STATISTICALLY BEARISH FOR THE NEXT 2 WEEKS

See 06/03 Market Outlook for more details.

SEASONALITY: BEARISH MONDAY AND FRIDAY

According to Stock Trader’s Almanac:

1. Monday of Triple Witching Week, Down down 8 of last 13.
2. June Triple Witching Day, Dow down 7 of last 12, average loss 0.5%.

Also see 06/01 Market Outlook for June day to day seasonality.

ACTIVE BULLISH SIGNALS:

• 8.1.5 Normalized CPCE: Too high, so bottomed?

ACTIVE BEARISH SIGNALS:

• N/A

ACTIVE BULLISH OUTLOOKS:

• 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
• 06/10 Market Outlook: 75% to 81% chances a green next week.

ACTIVE BEARISH OUTLOOKS:

• 06/03 Market Outlook: IWM weekly Bearish Engulfing and SPY down 5 consecutive weeks were bearish for the next 3 weeks.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

TREND COMMENT SPY & Weekly DOWN   QQQ & Weekly DOWN   IWM & Weekly DOWN Head and Shoulders Top breakdown, target $74.57. SSEC & Weekly DOWN   EEM & Weekly DOWN   XIU & Weekly DOWN Double Top breakdown, target $17.69. TOADV MA(10) oversold though. DAX & Weekly DOWN TLT & Weekly UP   UUP & Weekly DOWN   GLD & Weekly UP   USO & Weekly DOWN   XLE & Weekly DOWN Could be a Complex Head and Shoulders Top in the forming. XLF & Weekly DOWN   IYR & Weekly DOWN Double Top breakdown, target $57.34. XLB & Weekly DOWN

* = New update; Blue Text = Link to a chart in my public chart list. UP = Intermediate-term uptrend. Set when weekly buy signal is triggered. DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.