*Please make sure you understand how to use the table above. The main purpose of this report is to provide information so contradictory signals are always presented.
SEASONALITY: WEEK AFTER JULY EXPIRATION, DOW DOWN 7 OF LAST 11
- According to the Stock Trader’s Almanac: Week after July expiration, Dow down 7 of last 11, 2007 –4.2%, 2008 –4.3%.
- According to Sentimentrader: The S&P has dropped 20 of the past 28 years the day after expiry (however, the last four have been positive).
- According to seasonality chart from Sentimentrader, the next week is the most bearish week of July.
INTERMEDIATE-TERM: THE 2ND LEG DOWN COULD HAVE STARTED
周五的下跌基本符合07/14 Market Recap关于time, price and price pattern的预期，尤其是time target，exactly on 07/16，所以目前看起来（注意是目前，subject to change at any time哈），我在07/02 Market Recap里提及的the 2nd leg down可能已经开始了。
4.0.1 SPX Long-term Trading Signals，由于clearly weekly EMA(13) and EMA(34) had a bearish crossover，因此今天我正式downgrade the long-term trend to down from up。这是不是意味着大熊市再次开始了呢？老规矩，看看历史上weekly EMA(13) and EMA(34) bearish crossover的准确率吧。从下面的图看，准确率并不高，但是一旦出现bearish crossover，见红竖线，很大几率都会有much lower close ahead，对吧？因此4.0.1 SPX Long-term Trading Signals虽然不足以说明long-term bearish，但至少the 2nd leg down的可能性还是很高的，是吧？
如果indeed the 2nd leg down has started的话（我还不非常sure，关于这一点，后面short-term session会说明），下面的图是estimated time and price target。看不明白time and price target怎么得到的，没关系，有个rough idea就行。
关于time target，除了上面图里提到的07/27 and 07/29以外，见table above，Gann Day有07/24 and 07/27，07/26是Full Moon，07/23是Solar Term Date，见下图，07/31也是个重要的日子。所以综合起来，07/27 to 07/31是最可能的pullback time target。顺便说，下图里的10/02，我在06/30 Market Recap里提过，既使你看3 of primary wave 3 bull，Fib 38.2%的time retracement to the 1 of primary wave 3 bull (from 03/06/2009 to 04/26/2010)也是合理的，换句话说，就是这一轮调整，持续到10/02都是正常的，既使最最最mini的time retracement Fib 23.6% 也要到08/02，目前我们都还没有满足，所以现在谈3 of primary wave 3 bull还为时尚早，是吧？
为什么提到3 of primary wave 3 bull呢？在07/09 Market Recap里，我曾经提到，由于散户的sentiment太熊，所以自07/03开始的反弹可能会比预期的要大。很遗憾，散户的sentiment变得非常得快，本周的AAII创造了one of the largest bull jumps in history，而在胡同，已经有人在喊3 of primary wave 3 bull了。
在这里，我不想争论3 of primary wave 3 bull最终有没有可能，就目前看，至少从时间的角度讲，上面已经提到了，离10/02还远，而08/02还没有到，因此3 of primary wave 3 bull has started可能性不大。下面再看看其他方面。
Weak Michigan Confidence Reports from Bespoke，见红线，既使是发生在牛市，下个月也不会很好。
最新的Mutual Fund Cash Level from sentimentrader，换句话说，就是Mutual Fund manager们没有钱搞3 of primary wave 3 bull。
再看看这一轮反弹的Liquidity Injections flowing into the market from M3 and Foreign sources(courtesy of stocktiming)。这一轮反弹的liquidity inflow跟March 2009的liquidity inflow无法相比。
结论，就是看起来the 2nd leg down的可能性很大。由于liquidity不够，目前还看不出来3 of primary wave 3 bull的迹象，至少，从时间上讲，回调的时间还不够。下周如果下跌非常猛烈的话，倒是要小心3 of minor wave 3 of 1 of primary wave 3 bear的可能性，虽然我也不想争论现在是否是primary wave 3 bear。
SHORT-TERM: CPCE ARGUES FOR A TOP BUT VIX DISAGREES, SO BULL STILL HAS HOPE
虽然理论上讲，one day doesn’t make a trend，周五的下跌并不说明什么问题，但是上面的intermediate-term session已经提了，time, price and price pattern all met，所以目前（again，注意这个目前）看起来the 2nd leg down has started可能性非常大。此外，这里还有个证据：0.0.2 Combined Intermediate-term Trading Signals，breakout 3 points validated trend line，因此CPCE confirms that market has topped。这个图的可靠性，相当高。
为什么我反反复复强调“目前”，表示我并不sure if indeed the 2nd leg down has started呢？有两个图give bull a glimmer of hope。
VIX Leads SPX。这个图，我最近提了几次了，so far worked well。周五，VIX并没有配合SPX的sell off。
Phantom bar是个mystery，how it appears, why it works, I have no idea，不过好像通常都work，因此这个也是说要反弹，大大大反弹。
如果indeed周一大大大反弹的话，注意6.2.3 VIX:VXV Trading Signals, VIX:VXV is way too low，因此我不认为大盘能走多远，eventually, there’ll be a 2nd leg down，只不过是早晚的问题。
HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST
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