Summary:
The rebound since 11/02 was not broad based.
SPY up 7 days in a row was mostly a short-term top in the past.
| TREND | MOMENTUM | EMOTION | COMMENT - Sample for using the trend table. | |
| Long-term | Up | Disbelieve | ||
| Intermediate | Down | Neutral | ||
| Short-term | Up | Neutral | ||
| SPY SETUP | ENTRY DATE | INSTRUCTION | STOP LOSS | Mechanic trading signals for reference only. Back tested since 2002. |
| ST Model | *Short if Open > Close tomorrow. | Officially in downtrend. | ||
| Reversal Bar | *Short if Open > Close tomorrow. | |||
| NYMO Sell |
Stopped out with gains on 11/05. |
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| VIX ENV | ||||
INTERMEDIATE-TERM: NOT A BROAD BASED RALLY
1.2.3 Value Line Arithmetic Index (Daily), watch the green cycles. The previous 2 rallies were consist of white bars ONLY but this time bar colors are mixed, apparently the rally since 11/02 was weaker. So as mentioned in yesterday’s report, it looks a lot like what happened in July 2007 when NYSI didn’t confirm the market new high, therefore I believe the market is forming a Broadening Top where we’ll see bigger and bigger up and down swings.
0.0.3 SPX Intermediate-term Trading Signals, although according to my experiences, the similarity usually doesn’t work, but still I have to report what I see here: If the SPX repeats the previous blue cycle, then we should see another big push up tomorrow.
SHORT-TERM: SPY UP 7 DAYS IN A ROW WAS MOSTLY A SHORT-TERM TOP IN THE PAST
SPY had its 7th consecutive winning streak today, see back test results below – sell at next day open, cover at the next next day close. In addition, from the visual back test charts, it seems that SPY up 7 days in a row is more likely a short-term top. Also if tomorrow, SPY opens high then closes lower, two setups listed in the trend table above will be triggered. Both of these 2 setups have above 60% winning rate, plus the statistics about the SPY up 7 days in a row, the odds of winning seem good, therefore I might follow these 2 setups.
Back Test Summary:
Trades:
Visual Back Test:
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