Post by ukarlewitz on Jul 11, 2010 9:50:47 GMT -5
Sentiment has continued to plummet. For retail investors, its below the lower BB and back towards levels not seen since 3/09.
Moreover, asset allocation in bear vs bull leveraged funds is at least at a 4 year bearish high.
Then, we have the wisdom of CNBC viewers:
pragcap.com/have-we-seen-the-bottom
Net, swing shorting here is embracing the consensus retail view, which is rarely the place to be. More likely, there is fuel for squeezing the indices higher.
These readings are consistent with cycle bottoms. There is also an excellent of set of charts in Charts and Chat from the weekend that corroborate this view. fastopia.proboards.com/index.cgi?board=exchange&action=display&thread=944&page=25
Cobra - Pull back possible on Monday. If indeed the pullback starts the next Monday, especially if it’s a huge scary one, then the question inevitably would be: Is the rebound over? I believe most likely not. The argument is the up momentum this round is so far very strong. The min price target is SPX 1099.97.
Caldaro (I thought this was very interesting) -
- After the July 1st SPX 1011 low a week ago the market did something this past week it had not done since July09. Rally strongly on a week to week basis. We posted in friday's update that there were only nine times the SPX and DOW both rallied over 3% in one week since the bull market began. And, they all occurred either at the beginning or during uptrends. To put the asterisk on that observation the SPX/DOW finished the week with more than a 5% gain. This has only occurred three times since the bull market began. This week's strong rally suggests it was a kickoff to Major wave 1 of Primary wave III.
- The correction, not yet confirmed, may have ended on July 1st at SPX 1011. Typically during bull market corrections we get oversold conditions in all timeframes up to the weekly charts. After really steep or complex corrections there is usually a positive RSI divergence at the new lows and the MACD gets quite oversold. Also there is positive RSI/MACD divergences or an extremely oversold condition on the daily charts. All of these conditions have been met at the recent low.
- In addition, the NYAD market breadth typically gets oversold during corrections as well. It appears to have put in a double bottom after two extremely oversold declines. Also at the lows only 31% of all the stocks on the NYSE were above their 200 DMA. Again the most oversold condition since the bull market began. The VIX has failed to confirm any part of the decline after the initial test of the OEW 1041 pivot and is now downtrending. In bear markets it would have continued to move higher as volatility surged. One last point. The market had turned so bearish that only 3 of the 30 DOW were trading above their 200 DMA.
- Support for the SPX remains at 1058 and then 1041, with resistance at 1090 and then 1107. Short term momentum remains overbought. The important pivot on the downside appears to be 1018. It had a double test at the beginning of this month and held both times after the rally off the 1007 pivot. The key pivot then becomes the 1032 pivot. This should not be broken to the downside if we are truly starting a new uptrend. On the way up the first resistance is the 1090 swing pivot. It has remained the positive/negative bias pivot throughout the correction. The market needs to clear this pivot next week and the 1107 pivot shortly thereafter.
Alphatrends - the weekly still looks bearish but based on the daily you do not want to be getting short. Spy has rallied past the 38% and 50% retracement from the June high. 108.6 in the next R (62%); 107 and 106 are the next S. Likes these: Arba, Eres, Ovti, Rbcn.
Spy chart - nice pos divergence in macd. Friday ended right on the 20dma (R). Next is the 50dma at 110.3 and then the 200dma at 111. 3. The channel top rail is around 109 - all eyes are there, so expect some head fakes. Holding above 105 (the May low and the 5dma) is key for this week.
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Moreover, asset allocation in bear vs bull leveraged funds is at least at a 4 year bearish high.
Then, we have the wisdom of CNBC viewers:
pragcap.com/have-we-seen-the-bottom
Net, swing shorting here is embracing the consensus retail view, which is rarely the place to be. More likely, there is fuel for squeezing the indices higher.
These readings are consistent with cycle bottoms. There is also an excellent of set of charts in Charts and Chat from the weekend that corroborate this view. fastopia.proboards.com/index.cgi?board=exchange&action=display&thread=944&page=25
Cobra - Pull back possible on Monday. If indeed the pullback starts the next Monday, especially if it’s a huge scary one, then the question inevitably would be: Is the rebound over? I believe most likely not. The argument is the up momentum this round is so far very strong. The min price target is SPX 1099.97.
Caldaro (I thought this was very interesting) -
- After the July 1st SPX 1011 low a week ago the market did something this past week it had not done since July09. Rally strongly on a week to week basis. We posted in friday's update that there were only nine times the SPX and DOW both rallied over 3% in one week since the bull market began. And, they all occurred either at the beginning or during uptrends. To put the asterisk on that observation the SPX/DOW finished the week with more than a 5% gain. This has only occurred three times since the bull market began. This week's strong rally suggests it was a kickoff to Major wave 1 of Primary wave III.
- The correction, not yet confirmed, may have ended on July 1st at SPX 1011. Typically during bull market corrections we get oversold conditions in all timeframes up to the weekly charts. After really steep or complex corrections there is usually a positive RSI divergence at the new lows and the MACD gets quite oversold. Also there is positive RSI/MACD divergences or an extremely oversold condition on the daily charts. All of these conditions have been met at the recent low.
- In addition, the NYAD market breadth typically gets oversold during corrections as well. It appears to have put in a double bottom after two extremely oversold declines. Also at the lows only 31% of all the stocks on the NYSE were above their 200 DMA. Again the most oversold condition since the bull market began. The VIX has failed to confirm any part of the decline after the initial test of the OEW 1041 pivot and is now downtrending. In bear markets it would have continued to move higher as volatility surged. One last point. The market had turned so bearish that only 3 of the 30 DOW were trading above their 200 DMA.
- Support for the SPX remains at 1058 and then 1041, with resistance at 1090 and then 1107. Short term momentum remains overbought. The important pivot on the downside appears to be 1018. It had a double test at the beginning of this month and held both times after the rally off the 1007 pivot. The key pivot then becomes the 1032 pivot. This should not be broken to the downside if we are truly starting a new uptrend. On the way up the first resistance is the 1090 swing pivot. It has remained the positive/negative bias pivot throughout the correction. The market needs to clear this pivot next week and the 1107 pivot shortly thereafter.
Alphatrends - the weekly still looks bearish but based on the daily you do not want to be getting short. Spy has rallied past the 38% and 50% retracement from the June high. 108.6 in the next R (62%); 107 and 106 are the next S. Likes these: Arba, Eres, Ovti, Rbcn.
Spy chart - nice pos divergence in macd. Friday ended right on the 20dma (R). Next is the 50dma at 110.3 and then the 200dma at 111. 3. The channel top rail is around 109 - all eyes are there, so expect some head fakes. Holding above 105 (the May low and the 5dma) is key for this week.
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