US stock market morning update --- 10/5/09

As I stated in the weekend update, Today's bounce is most likely short-lived. It could be just an oversold bounce.

Us stock market morning update 10/5

We get the bounce expected. How high will it go? Daily 20ma/20ema could be maximum target.

US stock market weekend date --- 10/4/09

US stock's market's big drop Thursday, causing a lot of technical damage, confirming the top on 9/23/09 was an important top and downtrend has started.

Friday, Nasadq tested the last swing high (from the end of August) at 2040 and stopped right above that. $SPX tested its daily 50MA at 1020 and bounced up 5 pts from there. Although we may see oversold bounce Monday because of the oversold condition, those two levels should be taken out soon. Why?

The downtrend atually just started. $VIX broke above the descending triangle and its ADX is showing $VIX's uptrend is strong and has much more room to go up. This is very bearish to the stock market in the mid term.

Although Friday, Nasadq and $SPX didn't dropped much, Bpcompq dropped 1.56 and $Bpspx dropped 3.6, signaling the market breadth is very breaish and there's more downside ahead.

OBV of the major stock indexes has clearly in downtrend, confirming the downtrend of the major indexes themselves.

As you can see from daily charts of Nasadq and $SPX, -DI crossover above +DI. This is another bearish sign.

Many mid term signals (such as my $NASI and NYSI signal) issued new Sell signal last Tuesday. My mechanical major top and bottom systems also issued a new Major sell signal. Another of my proprietary mechanical trading systems also generated a new major SELL signal last Thursday. That system usually signals big moves.

How low can this downtrend go? The possible downside target for Nasadq is 1750 to 1820, for $SPX is 875 to 920. Some Elliot wavers claimed P2 top was in, we may see new low (lower than 3/9) from here. I don't take it serously. The bottom line is the now the downtrend started, we should follow the downtrend.

BAC broke below its intermediate uptrend line, 1st downside target is $15

BAC broke below its intermediate up trend line. Now its intermediate trend is down. Its 1st downside target is $15.

FAS broke below its semi-intermediate trend line, next downside target is $66

Today, FAS broke blow its semi-intermediate uptrend line decisively with high volume. This opens the door to test $66.

US market summary --- 10/1/09 after close

The market had very big sell off today, confirming what I said in the last weekend's update " we may have seen important top on 9/23/09". My mechanical major top and bottom signal issued a new major SELL today.

Many stocks had big broke down today. All major stock indexes broke below their daily 20MA/20EMA decisively. Nasadq closed right at intermdediate up trend line. I expect market may bounce to back-test its daily 20MA/20EMA and then resume down move again.

US stock update --- 10/1/09, 8:00AM PT

Market dropped sharply this morning, confirming Monday's rally was a bull trap and there's more downside ahead. Actually, the last few days volume trend has warning us not to be bullish.