08/03/2011 Market Outlook (Tradable Bottom?)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: A TRADABLE BOTTOM COULD BE IN

The chart below is my wild-est-est-est-est-est guess for the future, based on all the evidences so far I’ve collected. I know someone would argue that this Head and Shoulders Top is too obvious to be functional. Well, no comments, let’s wait and see. Statistically, Head and Shoulders Top has 55% chances to meet its text book target. And ever since the March 2009, we’ve had 2 failed Head and Shoulders Top already, so the question is: will the 3rd time be the charm? Don’t forget, it has 55% chances statistically, failed 3 times then the failure rate would be near 100% instead of 45%, we should then forget about this so called Head and Shoulders Top then. (I know failed 3 of 3 doesn’t mean failure rate is 100%, I should count 100 or more cases, blah blah, well, let’s wait and see, OK? LOL)

SPXEvilPlan

OK, you see my crystal ball, now it’s time for me to explain why such a wild-est-est-est-est-est guess. However, if your goal here is to know the conclusion then you should pretty much stop here, no need to read below although my Chinese English is really beautiful.

Why was a tradable bottom in?

Four reasons:

  • Hammer, largest Volume recently and successful testing of the March lows, the SPX daily bar today looks a lot like a bottom.

SPXDaily

ExtremePCWatch

TNXDaily

VIXLeadsSPX

Why is the rebound target above MA(200), and could rise to August 9?

  • FOMC is on August 9. Usually market is likely up until then.
  • The statistics below should mean MA(200) won’t be simply broken without a fight. I expect some seasaws over it, which means we’ll see SPX break above it at least once.

MA200

The last but not the least, why will the rebound fail eventually?

I’ve provided enough evidences in 08/01 Market Outlook and 08/02 Market Outlook, among them, two of the most important are listed below:

NYMO

INTERMEDIATE-TERM: IN DOWNTREND, COULD BE A HEAD AND SHOULDERS TOP FORMED, TARGETING SEP 2010 LOWS

See short-term session above for the chart, in wait and see mode as the Head and Shoulders Top breakdown not confirmed yet.

SEASONALITY: BEARISH FIRST 9 TRADING DAYS OF AUGUST

See 07/29 Market Outlook for more details. Also please see 07/29 Market Outlook for day to day August seasonality chart.

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

SUMMARY OF SIGNALS FOR MY  PUBLIC CHART LIST: 

TREND MOMENTUM COMMENT
Long-term 2 of 2 BUY
Intermediate 5 of 5 SELL 4 of 5 NEUTRAL Cobra Impulse in SELL mode; Non-Stop in SELL mode.
Short-term DOWN 6 of 6 NEUTRAL
  TREND COMMENT
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.
© 2013 Cobra's Market View — All Rights Reserved.