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Market Recap: Speculation About the Next Price and Time Target

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY    
Intermediate 3 of 3 are BUY 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode
Short-term Model is BUY 5 of 5 are NEUTRAL Trend is up, I hold trapped short position over weekend.
GANN DAY MOON/SOLAR CYCLE CONCLUSION
8/11,8/26 08/09 / 08/08 8/9,8/11,8/23 Next pivot date: 08/06 - 08/11, 08/23 - 08/26

BULLISH  
BEARISH 6.2.3 VIX:VXV Trading Signals: Too low.
0.2.5 NYSE Total Volume: A little bit low.

SPY
SETUP
ENTRY
DATE
STOP
LOSS
INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM: SSO/SDS, UPRO/SPXU
Non-Stop 07/15 L N/A Be sure to check 8.2.2a to 8.2.2g to understand the risks.
ST Model 07/20 L *07/30 low *Adjust stop loss.
*Please make sure you understand how to use the table above. The main purpose of this report is to provide information so contradictory signals are always presented.


SEASONALITY: THE FIRST NINE TRADING DAYS OF AUGUST ARE HISTORICALLY WEAK

See 07/30 Market Recap for more details.


INTERMEDIATE-TERM: THE CORRECTION SINCE 04/26 ISN'T OVER, THE REBOUND SINCE 07/01 IS NEAR END

Maintain the forecast mentioned in 07/30 Market Recap, the correction since 04/26 isn't over and the rebound since 07/01 is near end.

From the chart below we can see, bulls have struggled for 5 weeks but still couldn't recover all the losses made by bears in 2 weeks. It doesn't look like the last year's mad cow is back.


Larger Image

On the other hand, retailers are (represented by Rydex traders, courtesy of sentimentrader) very bullish.

Rydex Bull Fund Asset Flow

6.2.3 VIX:VXV Trading Signals, argues there's not much up room left. And don't forget this chart worked well even in the last year's mad cow period.


Larger Image

The chart below is the zoom-in of the chart above. Take a look at what happened when VIX:VXV was at extremely low level.


Larger Image

So to summarize above, I still don't think there's much room left on the upside. My estimation is the the final price target is SPX 1131 and the pivot date could be around 08/10.

I've mentioned in the Friday's After Bell Quick Summary, 08/06 doesn't look like a pivot day so the next pivot day according to the chart below should be around 08/09 to 08/11. My guess is 08/10 Fed day.


Larger Image

The chart below explains my speculation about the price target. The rebound since 07/01 shows very strong Fib relations where the pullback always stopped around the Fib 50% of the previous up leg while the rebound always stopped around the Fib 61.8% of the previous up leg. So according to this relationship, since the Friday's low happened to be the Fib 50% of the previous up leg from 07/30 t0 08/04 therefore the pullback could be over, and the rebound target, if the same Fib 61.8% of the previous up leg from 07/30 to 08/04 rebound rule still applies, then it'd be around 1131. As for rebound time, if the same pullback day equals to rebound day rule applies, then it should be 2 trading days which happens to on 08/10 Fed day.


SHORT-TERM: EXPECT BULLISH MONDAY

Expect bullish Monday. This, by the way, also fits well with the speculation mentioned in the intermediate-term session above - the pullback since 08/04 is over, expect 2 days rebound to 1131.

6.5.2a Weekday Seasonality Watch, bullish Monday is back?

6.2.4a SPX and VIX Divergence Watch, both VIX and SPX closed in red, 73% chances a green day the next day.


Larger Image

SPY had 2 hollow red bars in a row, buy at close (that's Friday) sell at the next day close, you have 70% chances since year 2000.

SPY had back to back 2 unfilled gaps in a row, buy at close (that's Friday) sell at the next day close, you have 65% chances since year 2000.


HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

  TREND COMMENT - *New update. Click BLUE to see chart if link is not provided.
QQQQ UP  
IWM *UP *4.1.2 Russell 2000 iShares (IWM Weekly): 2 black bars in a row, doesn't look good.
CHINA UP
EMERGING UP  
EUROPEAN UP  
CANADA UP  
BOND UP  
EURO UP
GOLD DOWN  
GDX DOWN
OIL UP  
ENERGY UP  
FINANCIALS UP
REITS UP *4.4.3 Real Estate iShares (IYR Weekly): Home builder is lagging, be careful.
MATERIALS UP

 

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