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Market Recap: Headwind Ahead?

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY    
Intermediate 5 of 5 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term   6 of 6 are NEUTRAL  
GANN DAY MOON:SOLAR CYCLE CONCLUSION
01/05-01/07 01/04 : 01/06   Next pivot date: 01/07

BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
BEARISH 1.0.6 SPY Unfilled Gaps: 24 unfilled gaps, the max is 24.
12/20 Market Recap: Smart/Dumb money confidence spread too high.
0.2.1 10Y T-Bill Yield: ROC(30) >= 9, topped? (Due to Quantitative Easing, I'm not sure if it still works)
1.2.0 INDU Leads Market: INDU had a lower low, so SPX might follow eventually?
8.2.7b Record High ISEE Equities Only Index Readings 2010: Record high, top is close?
0.2.3 NYSE McClellan Oscillator: Hindenburg Omen confirmed.
0.1.1 SPX Intermediate-term Trading Signals: CPC MA(10) too high, so topped?
6.2.3 VIX:VXV Trading Signals: Too low, so topped?
12/31 Market Recap: Lowest ATR(10) readings in 13 years, so topped?
0.2.2 Extreme Put Call Ratio Watch: Both CPC and CPCE are low, so topped?
*6.5.1b SPX and NFP: Red NFP day means the trend will turn (down).
*8.2.9c QQQQ - 2002 to 8.2.9k QQQQ - 2010: Poor QQQQ performance until the end of January.
*01/07 Market Recap: Seasonality wise the rest of January isn't good.
*01/07 Market Recap: Strong Off-Season means poor Earning Season.
*01/07 Market Recap: SPX weekly price volume negative divergence means negative ahead.

SPY
SETUP
ENTRY
DATE
STOP
LOSS
INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM: SSO/SDS, UPRO/SPXU
Non-Stop 09/07 L N/A  
ST Model     Buy mode doesn't mean long, a 2nd buy signal is needed to enter long.
Short-term N/A N/A Trend is UP. I hold no position over the weekend.

My Thoughts: A correction is just a matter of time, but until price confirms, I'd rather long than short, with caution though.

SHORT-TERM: 71% CHANCES A LOWER WEEKLY CLOSE WITHIN A WEEK OR TWO

SPX stuck in a trading range so the short-term direction is not clear, have to wait for the breakout before blah blah further.

SPY 60-minute Chart

My guess, based on the statistics below, is, either breakdown directly or (most likely) false breakout on the upside then fall back into the current range at least. The guess should happen within a week or two especially in January Expiration Week, which was horrible since 1999, Dow down big 8 of last 11 according to Stock Trader's Almanac.

SPX Weekly
Larger Image

INTERMEDIATE-TERM: COULD BE WAVE 5 UP TO SPX 1300+, PIVOT TOP COULD BE AROUND 01/05 TO 01/12

Maintain calling for the pivot top around 01/05 to 01/12 (See 12/31 Market Recap for more details). My guess is 01/12 (and a day or two after) pivot top is more likely, although now is still too early to say that 01/05 pivot top is wrong. Again, update all the reasons below, because I managed to find more "excuses", LOL. Trading wise, however, again and again, expectation doesn't equal to a position, until price confirms, all the forecasts, no matter how many "excuses" I've found, are just speculation which can be the reason to take caution but never a reason to trade against the current trend. I want to make it very very clear.

  • The statistics below is from Schaeffer, looks like the first 5 days of year is up was not a good news for the the rest of the January.

Seasonality

  • The chart below is from Bespoke. I've mentioned several times in the past that statistics shows a strong Off-Season usually meant a weaker Earning Season which can be seen clearly in the chart below. Plus now even the beat rate has been trending down, but Earnings Estimate and Guidance simply keep increasing, so the chances are even higher, the coming Earning Season won't be pleasant.

Earnings Season
Larger Image

Bullish Percentage Weekly

  • I've mentioned several times that Non Farm Payroll day was more likely a pivot day, especially if it's a red day. Well, we've got it this Friday.

S&P500 and NFP Day

  • In 12/31 Market Recap, I mentioned the index top could be calculated by counting 28 trading days from the TED top (See 12/31 Market Recap for more details). At least now I cannot say such a coincidence is wrong, although personally, I don't believe this coincidence yet (need see the next week of course).

TED Top

  • The statistics in the Short-term Session above has mentioned that the next 2 weeks may not be pleasant, especially the Expiration Week, the seasonality was terrible.
  • From chart 8.2.9c QQQQ - 2002 to 8.2.9k QQQQ - 2010, check by yourself in my public chart list, starting from the 8th trading day in January (which is 01/12) until the end of the month, QQQQ has been bearish since year 2002 without exception.
  • From 08/27 bottom to 11/05 high, SPX up 49 trading day, so 49 * Fib 61.8% = 30, adding from 11/29 bottom, what we get then happens to be on 01/11. (See 12/31 Market Recap for more details)

SEASONALITY: NO UPDATE

See 12/31 Market Recap for the January seasonality chart.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

  SIGNAL COMMENT
QQQQ 01/05 S  
NDX Weekly UP  
IWM    
IWM Weekly UP  
CHINA    
CHINA Weekly UP Should have set the trend to down from up but I'll see how the market rebounds.
EEM    
EEM Weekly UP  
XIU.TO 01/06 S  
XIU.TO Weekly UP *Weekly Bearish Engulfing, be careful.
TLT   Breakout, so TLT could be bottomed. Need watch the trend line resistance though.
TLT Weekly UP  
FXE   *Clear breakdown, the downtrend resumes.
FXE Weekly DOWN  
GLD   Could be an Ascending Triangle in the forming.
GLD Weekly UP  
GDX 12/17 S 1-2-3 trend change confirmed, so GDX could be topped. Be careful about gold itself.
GDX Weekly UP  
USO    
WTIC Weekly UP  
XLE 06/15 L  
XLE Weekly UP  
XLF 10/15 L  
XLF Weekly UP *Testing resistance which also is multiple Fib confluences area.
IYR    
IYR Weekly UP Home builders are lagging.
XLB 01/06 S  
XLB Weekly UP BPMATE is way too overbought.
  1. Please make sure you understand how to use the table above. The purpose of this report is to provide info so contradictory signals are always presented.
  2. Conclusions can be confirmed endlessly, but trading wise, you have to take actions at certain risk level as soon as you feel the confirmation is enough. There's no way for me to adapt to different risk levels therefore no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
  3. * = New update; Blue Text = Link to a chart in my public chart list.
  4. Trading signals in OTHER ETFs table are mechanical signals. See HERE for back test results. 08/31 L, for example, means Long on 08/31.
  5. UP = Intermediate-term uptrend. Set when I see at least one higher high and higher low on weekly chart.
  6. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on weekly chart.

 

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