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Market Recap: A Low of Some Kind Could Have Been In

  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY    
Intermediate 5 of 5 are SELL 5 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in SELL mode.
Short-term   6 of 6 are NEUTRAL  
GANN DAY MOON:SOLAR CYCLE CONCLUSION
03/12,03/16-03/21 03/19 : 03/21   Next pivot date: 03/21

BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
02/23 Market Recap: Pullback could last 4 weeks, then 02/18 highs will be revisited.
03/01 Market Recap: Bearish Engulfing is very bullish in 2 to 4 weeks.
03/10 Market Recap: Price overlaps so the pullback may not go far.
BEARISH 4.0.1 SPX Long-term Trading Signals: Weekly EMA(13) is way too high above weekly EMA(34).
03/04 Market Recap: OEX open interest ratio too high, could be choppy ahead.
My Thoughts The pullback since 02/22 may last but the 02/18 high will be revisited in 69 calendar days on average.

SPY
SETUP
ENTRY
DATE
STOP
LOSS
INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM: SSO/SDS, UPRO/SPXU
Non-Stop 02/24 S N/A 02/23: Close long and sell short. Short is for aggressive traders only.
ST Model   *Long if up day the next Monday. The stop loss is 1.9*ATR(10). However, the model could turn into a sell mode within day or two, so may not be a good trade here.
Short-term DOWN?   I hold no position over the weekend.

SHORT-TERM: COULD BE A DOWN MONDAY, BUT A LOW OF SOME KIND COULD HAVE BEEN IN

I mentioned 2 possibilities in the Friday's After Bell Quick Summary, either Shooting Star kissing the broken trend line goodbye or a Head and Shoulders Bottom breakout targeting SPY $131.93. From so far I've collected, looks like the argument for Head and Shoulders Bottom is not strong enough, so I'm now inclined to believe a down Monday. However, chances are good that the Friday's low could be either the final low (means we'll see a new high soon) or a short-term low (means a rebound will last several days).

SPY 60-Minute Chart

The statistics below is the last straw to convince me that we might have a down Monday but a low of some kind could have been in. SPX up while BPSPX down 1+, surprisingly it mostly means a bottom of some kind.

SPX Up While BPSPX Down
Larger Image

Remember the statistics I mentioned in 02/23 Market Recap about "no 2.5%+ pullback for 40+ trading days, the 1st 2.5%+ pullback could last 4 weeks then 02/18 highs will be revisited"? Well, now the pullback size and time are very close to the averages.

Pullback within Normal Range

Comparing all the big 2 leg down pullbacks since the March 2009, too, we're almost there in terms of pullback size and time.

2 Leg Down Size And Time
Larger Image

And as per the statistics I mentioned in 03/01 Market Recap about Bearish Engulfing, it should be very bullish in 2 to 4 weeks. Well, 03/01 + 14 = 03/15, which is the next week.

Bearish Engulfing Back Test Summary

4.1.3 Volatility Index (Weekly), 2 Doji + 1 Shooting Star, VIX weekly looks bearish. A pullback in VIX would translate a higher price in SPX.

VIX Weekly

Rydex Beta Chase Index from sentimentrader, retailers are way too bearish which usually means an important bottom.

Rydex Beta Chase Index

Last but not the least, still remember the comparison chart in 03/10 Market Recap about impulse down vs corrective down where price mostly overlaps? Still I don't see any impulse push down, so I really doubt how far the pullback can go.

Strong Push Down VS Weak Push Down
Larger Image

So to summarize above, all blah blah are basically saying that bull has the future. However, there's one chart, 20 day buy-to-open PC/Ratio, that has successfully caught all the recent tops and bottoms. Now the question is: Will the pullback last until the red curve falls into 2.5 to 3.0 area before it could possibility over? If so, then clearly the pullback is far away from over yet. I'm not sure about the chart yet as according to the longer history, the signal does not always work.

20-Day Put/Call Ratio

INTERMEDIATE-TERM: COULD NOT BE VERY BRIGHT

On the intermediate-term, I'll maintain the forecast mentioned in 03/04 Market Recap that we may eventually see a big pullback. The main argument is the OEX Open Interest Ratio is way too high. My guess is the pullback may happen within 2 months because statistically, it seems the market is very bullish in 3 to 6 months.

OEX Put/Call Ratio Open Interest

The statistics below says on a longer time frame (in 3 to 6 months), the market is very bullish. Info only as I cannot see and don't care that far.

S&P500 Bull Market 700+ days
S&P500 Bull Market 100+ days

SEASONALITY: BULLISH MONDAY

According to Stock Trader's Almanac:

  1. Monday before March Triple Witching, Dow up 17 of last 23.
  2. March Triple Witching Day mixed last 10 years, Dow down 3 of last 4.

For March seasonality chart please refer to 03/01 Market Recap.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

  TREND COMMENT
QQQQ&Weekly UP  
IWM & Weekly UP  
SSEC & Weekly UP  
EEM & Weekly *DOWN  
XIU & Weekly UP 1.5.1 TSE McClellan Oscillator: Oversold.
TLT & Weekly UP  
FXE & Weekly UP (weekly) Testing Fib confluences area.
GLD & Weekly UP  
GDX & Weekly UP  
USO & Weekly UP  
XLE & Weekly UP  
XLF & Weekly UP  
IYR & Weekly UP  
XLB & Weekly *DOWN  
DBA & Weekly *DOWN  
  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. * = New update; Blue Text = Link to a chart in my public chart list.
  3. UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  4. DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.

 

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