01/27/2011 Market Recap: CPCI is way too high


Cobra's Market View Private Messaging System shows:


  TREND MOMENTUM COMMENT
Long-term 2 of 2 are BUY  
Intermediate 5 of 5 are BUY 4 of 5 are NEUTRAL SPY ST Model in BUY mode; Non-Stop in BUY mode.
Short-term 6 of 6 are NEUTRAL
GANN DAY MOON:SOLAR CYCLE CONCLUSION
01/19,01/26 01/19 : 01/20 Next pivot date: 01/19
BULLISH 09/27 Market Recap: 9 POMO within 20 trading days means 14%+ up in 3 months.
1.2.0 INDU Leads Market: INDU new high, so SPX will follow?
BEARISH 1.0.6 SPY Unfilled Gaps: 26 unfilled gaps, the max is 26.
12/20 Market Recap: Smart/Dumb money confidence spread too high.
0.2.1 10Y T-Bill Yield: ROC(30) >= 9, topped? (Due to Quantitative Easing, I’m not sure if it still works)
1.2.0 INDU Leads Market: INDU had a lower low, so SPX might follow eventually?
8.2.7b Record High ISEE Equities Only Index Readings 2010: Record high, top is close?
0.2.3 NYSE McClellan Oscillator: Hindenburg Omen confirmed.
0.1.1 SPX Intermediate-term Trading Signals: CPC MA(10) too high, so topped? Failed!
12/31 Market Recap: Lowest ATR(10) readings in 13 years, so topped?
6.5.1b SPX and NFP: Red NFP day means the trend will turn (down). Failed!
8.2.9c QQQQ – 2002 to 8.2.9k QQQQ – 2010: Poor QQQQ performance until the end of January.
01/07 Market Recap: Seasonality wise the rest of January isn’t good.
01/07 Market Recap: Strong Off-Season means poor Earning Season.
01/10 Market Recap: SPX down 3 days in a row was a bad sign. Failed!
01/10 Market Recap: INDU down Friday and the following Monday was a bad sign.
4.0.4 Dow Theory: Averages Must Confirm: BPSPX is way too overbought.
0.0.2 Combined Intermediate-term Trading Signals: Trend line broken, so topped?
01/21 Market Recap: INDU up 8 weeks in a row, could mean a red next week.
*0.2.2 Extreme Put Call Ratio Watch: CPCI is way too high, could mean a top of some kind.
SPY SETUP ENTRY DATE STOP LOSS INSTRUCTION: Mechanic signals, back test is HERE, signals are HERE.
TRADING PLATFORM:
SSO/SDS, UPRO/SPXU
Non-Stop 09/07 L N/A
ST Model Long triggered on 01/14, flatted out on 01/19, no chance to follow though.
Short-term N/A N/A Trend is UP. I hold no position overnight.
My Thoughts Not sure if the much anticipated correction has started.

SHORT-TERM: EXTREMELY HIGH CPCI READINGS COULD MEAN SOME WEAKNESS AHEAD

Still the new high today isn’t decisive enough, so bears still have hopes, especially according to 6.5.2b Month Day Seasonality Watch, the last 2 trading days of each month since August 2009 were bearish, so let’s give bears a few more days. By the way, I’ve removed some bearish signs in the table above, except some apparently failed signals, some on the 2nd thought, are too vague to judge in the future if indeed they worked, so I decide to clean them too. Well, you can consider this as my way of capitulation (on bearish view), LOL.

MonthDaySeasonalityWatch

Two things I’d like your attention for today:

  • 0.2.2 Extreme Put Call Ratio Watch, CPCI too high could mean at least a short-term top. Like almost all the other signals, it didn’t work well recently but after all it still worked, so let’s see.

CPCIWatch

  • AMZN dropped sharply after ER in AH, which actually is a good news for bulls, assuming AMZN indeed red tomorrow. Remember what I mentioned in 01/18 Market Recap? Where I said the IBM one day return on earnings predicts the SPX  over the next 5 weeks 80%+ of the time. Well, AMZN is the opposite, which means AMZN red on ER most likely means SPX green over the next 5 weeks. So let’s give it a little attention tomorrow on how AMZN closes. The statistics below are from Bespoke (up to July 2010).

SPXPredictorStocks

INTERMEDIATE-TERM: IN WAIT AND SEE MODE, WHETHER THE 01/18 HIGHS IS THE WAVE 5 HIGH REMAINS TO BE SEEN

Since even the short-term I have no answer for whether the pullback is over, so whether the intermediate-term was topped, we’ll have to wait and see.

SEASONALITY: THE LAST 2 TRADING DAYS OF EACH MONTH SINCE AUGUST 2009 WERE BEARISH

See 01/21 Market Recap for more details.

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST

SIGNAL COMMENT
QQQQ *01/27 L
NDX Weekly UP BPNDX is way too overbought.
IWM
IWM Weekly DOWN No lower low to confirm yet, but the sell off is strong, so downgrade the trend to down from up.
CHINA
CHINA Weekly DOWN
EEM
EEM Weekly UP
XIU.TO 01/06 S
XIU.TO Weekly UP
TLT 0.2.1 10Y T-Bill Yield: Symmetrical Triangle? So bond should keep falling?
TLT Weekly ?
FXE 3.1.1 US Dollar Index Bullish Fund (UUP Daily): 1-2-3 trend change, UUP could be in downtrend.
FXE Weekly UP No higher low to confirm yet but the rebound is strong, so I upgrade the trend to up from down.
GLD
GLD Weekly *DOWN
GDX 12/17 S
GDX Weekly DOWN
USO
WTIC Weekly *DOWN
XLE 01/25 S
XLE Weekly UP
XLF 10/15 L
XLF Weekly UP Testing resistance which also is multiple Fib confluences area.
IYR
IYR Weekly UP
XLB 01/19 S
XLB Weekly DOWN BPMATE is way too overbought.
  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. Conclusions can be confirmed endlessly, but trading wise, you have to take actions at certain risk level as soon as you feel the confirmation is enough. There’s no way for me to adapt to different risk levels therefore no trading signals will be given in this report except the mechanical signals such as SPY ST Model.
  3. * = New update; Blue Text = Link to a chart in my public chart list.
  4. Trading signals in OTHER ETFs table are mechanical signals. See HERE for back test results. 08/31 L, for example, means Long on 08/31.
  5. UP = Intermediate-term uptrend. Set when I see at least one higher high and higher low on daily chart.
  6. DOWN = Intermediate-term downtrend. Set when I see at least one lower high and lower low on daily chart.
© 2013 Cobra's Market View — All Rights Reserved.