02/01/2010 Market Recap: Possible Rebound Target

TREND INDICATOR MOMENTUM INDICATOR COMMENT (Click link to see chart) Long-term 3 of 3 are BUY     Intermediate 3 of 3 are SELL 5 of 6 are NEUTRAL SPY ST Model is in SELL mode Short-term 1 of 1 are SELL 8 of 8 are NEUTRAL

BULLISH 0.0.6 Nasdaq 100 Index Intermediate-term Trading Signals: NADNV too high. BEARISH 2.0.0 Volatility Index (Daily): Could be a Bull Flag in the forming. CONCLUSION

SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE. TRADING VEHICLE: SSO/SDS, UPRO/SPXU ST Model 01/27 S *breakeven *Adjust stop loss. Reversal Bar     NYMO Sell 01/21 S 01/28 High   VIX MA ENV

OTHER ETFs TREND COMMENT – *New update. Click BLUE to see chart if link is not provided. QQQQ     IWM     CHINA Down Double Top or Bearish 1-2-3 Formation? EMERGING     CANADA Down Double Top, target $15.77. TOADV oversold. Could be a short-term rebound, but the big trend is down. FINANCIALS   REITS   ENERGY   OIL     GOLD   01/29 Market Recap: Rydex traders too pessimistic about gold. DOLLAR UP Confirmed Head and Shoulders Bottom breakout! 3.1.1 US Dollar Index Bullish Fund (UUP 30 min): ChiOsc too high, expect short-term pullback. BOND   Could be a Bull Flag. So yield could rise while bond should fall.

INTERMEDIATE-TERM: INITIAL SPX PULLBACK TARGET COULD BE AROUND 1020-1040 AREA

No update, according to chart 4.1.0 S&P 500 Large Cap Index (Weekly), the most likely initial pullback target could be around 1020-1040 area.

SHORT-TERM: THREE POSSIBLE REBOUND TARGET  

I have no evidences saying the pullback is over, so for now I’ll treat today’s rally as a part of an oversold rebound. So according 1.0.3 S&P 500 SPDRs (SPY 30 min), there’re 3 possible rebound targets:

1. Fib 23.6%. Right hit the upper channel boundary so it’s possible the rebound was over.
2. Fib 38.2%. Looks logical too as it happens to be an important resistance too.
3. Jan 21 gap.

The biggest problem today is that QQQQ was lagging. 1.1.5 PowerShares QQQ Trust (QQQQ 30 min), comparing with the SPY 30 min chart above, it’s clear that QQQQ couldn’t even reach Fib 23.6%. While the Intraday Cumulative TICK is too high now, so QQQQ may not be able to catch up with the SPY tomorrow, this means that QQQQ lagging won’t be the today’s problem only. Not good, as soldiers (QQQQ) are destined to be running behind generals (SPY) on this rebound.

There’s another problem, 1.0.2 S&P 500 SPDRs (SPY 60 min), today’s gap is the SPY’s 13th unfilled gap, if we had another gap up open tomorrow, then it’d be the SPY’s 14th gap. SPY had the maximum 15 unfilled gaps before.

STOCK SCREENER:  For fun only, I may not actually trade the screeners. Since SPY ST Model is in SELL mode, only SHORT candidates are listed. For back test details as well as how to confirm the entry and set stop loss please read HERE. Please make sure you understand the basic risk management HERE.

Today’s screener has only one stock.

According to the entry rule, all screeners found on last Friday were not confirmed. Well, that's the beauty of the entry confirm rule as you could avoid shorting right at the market bottom.