SHORT-TERM: LOW WAS IN OR VERY CLOSE, BUT THE REBOUND LIKELY BE ANOTHER SELL OPPORTUNITY
- Low was in or very close. However, most likely it's just a tradable bottom not the low.
- Bears have at least one more chance to sell the bounce.
Why was low in or very close?
- The chart below says, VIX weekly rose 40%+, 76% chances green the next week but also 76% chances there'll be a lower low first.
- As mentioned in the Friday's Trading Signals, Cobra Impulse System detected the low and therefore requested to cover the short position. The chart below shows all the past cases when such a low was detected. Not absolutely the low but should be close enough, shouldn't it?
- NYMO oversold.
- QQQ hollow red bar.
Why will bears have at least one more chance to sell the bounce?
Still it's the law of inertia, SPY down 5 days in a row means selling pressure is high therefore a V shape reversal is rare, at least the low will be revisited sometimes later. Listed in the charts below are all the past cases since year 2000 when SPY down 5 or more consecutive days, should be enough to prove what I said. The revisit of the low can sometimes be higher low but from the charts we can see that more likely it's going to be a lower low.
INTERMEDIATE-TERM: OFFICIALLY TO ME IS IN DOWNTREND
In wait and see mode, no update.
SEASONALITY: BEARISH FIRST 9 TRADING DAYS OF AUGUST
According to Stock Trader's Almanac:
- First trading day in August weak, Dow down 9 of last 13, up 1.1% in 2007 and 1.3% in 2009.
- First 9 trading days of August are historically weak.
The below seasonality char about August is from Bespoke.
The below August day by day seasonality chart is from Sentimentrader.
ACTIVE BULLISH OUTLOOKS:
07/01 Market Outlook: Bullish July. Also one more evidence in 07/05 Market Outlook.Failed! 07/07 Market Outlook: New NYHGH high means SPX higher high ahead.Failed!
ACTIVE BEARISH OUTLOOKS:
07/20 Market Outlook: Multiple evidences arguing for more pullbacks ahead. Also 2 more evidences in 07/25 Market Outlook.
- 07/22 Market Outlook: Bearish on AAPL, therefore QQQ as well.
SUMMARY OF SIGNALS FOR MY PUBLIC CHART LIST:
|Long-term||2 of 2 BUY|
|Intermediate||4 of 5 SELL||4 of 5 NEUTRAL||Cobra Impulse in SELL mode; Non-Stop in BUY mode.|
|Short-term||DOWN||3 of 6 OVERSOLD|
|QQQ & Weekly||UP||4.1.1 Nasdaq 100 Index (Weekly): SOX lags, be careful.|
|IWM & Weekly||*DOWN|
|SSEC & Weekly||*DOWN|
|EEM & Weekly||UP|
|XIU & Weekly||*DOWN|
|DAX & Weekly||*DOWN|
|TLT & Weekly||*UP|
|UUP & Weekly||DOWN|
|GLD & Weekly||UP|
|USO & Weekly||UP|
|XLE & Weekly||UP|
|XLF & Weekly||DOWN|
|IYR & Weekly||*DOWN||4.4.3 Real Estate iShares (IYR Weekly): XHB lags, be careful.|
|XLB & Weekly||*DOWN|
- * = New update; Blue Text = Link to a chart in my public chart list.
- UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
- DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.