10/12/2011 Trading Signals


Frist of all, take a time to vote HERE, maybe you now have a 2nd thought about the Oct lows. Well, too bad, according to today’s close those who have voted might have a 3rd thought? Next time, think 3 times before making your divine vote. My guess is we’d have a 3rd round poll about the same question, we’ll see. Smile

I have no idea about tomorrow, according to the evidences shown in the last night report, more like a red day though.

Cobra Impulse System requests to set a breakeven stop loss today. Again, the system simply tries to stay in a trend as long as possible, so it’s up to you to decide when to take partial profits.


SPY SYSTEM ENTRY STOP LOSS Current 2*ATR(10) value: SSO=10%; SDS=12%; UPRO=15%;SPXU=19%
Non-Stop 10/11 L N/A  
Cobra Impulse 10/11 L *Breakeven *Adjust stop loss.


29 Comments on "10/12/2011 Trading Signals"
  1. Comment left on:
    October 12, 2011 at 4:44 pm
    Anonymous says:

    thanks cobra.
    btw. your twittering makes regular visitors come less to your website. now i know via twitter when the updates are there 🙂

    ps: i keep clicking the ads.

    • Comment left on:
      October 12, 2011 at 5:41 pm
      Cobra says:

      That’s really bad, and yet another reason I have to charge something. Kidding…

  2. Comment left on:
    October 12, 2011 at 4:48 pm
    Anonymous says:


  3. Comment left on:
    October 12, 2011 at 4:49 pm
    Anonymous says:

    maybe us markets rallyied because they (banksters) thought they would get more crack cocaine (qe) like the european banks received esfs lately. 2night Ben fomc did not do anything. time to dump it all again??

  4. Comment left on:
    October 12, 2011 at 5:02 pm
    Anonymous says:

    I understand the limitations of your backtesting software, so take this request with a grain of salt.  

    Would it be possible to publish the values (for SPY) of signals for the CIS that you use for statistical purposes?  For example, for the last long call, what value of SPY is the system using for statistical purposes?Another request:  when there are pending trades, would it be possible to list the SPY level rather than something like “above the 4/12 high?”I am in awe of the material available on this website, so, if these requests would entail more work for you Cobra, please feel free to ignore them.

    • Comment left on:
      October 12, 2011 at 5:40 pm
      Cobra says:

      OK, I’ll consider that.

  5. Comment left on:
    October 12, 2011 at 5:16 pm
    • Comment left on:
      October 12, 2011 at 6:06 pm
      dham pusha says:

      Sir, in these choppy markets, your charts are real helpful to us as a flagpost. I almost never read Cobra’s blog, but use your chart to decide how to trade the next day. I’ve been always in profit with your guidance!

  6. Comment left on:
    October 12, 2011 at 5:20 pm
    Anonymous says:

    Hi Cobra, I’m sorry if you’ve addressed this before, but I’ve always had this question of how your CIS works: I can roughly tell from your chart that the entry price for the CIS is somewhere in the middle of the day’s range. But your entry conditions are usually something like “higher than yesterday’s high AND close in green”, which means the entry conditions have to rely on information after market close. Then how can you get the entry price at the middle of the day’s range? Sorry if I misunderstood anything.   

    P.S. When think about it, the conditional bias of knowing the day close in green (for long signals), coupled with the supposedly posteriors entry point of (high+low)/2, you’ve got an advantage even if you just day trade with the CIS, because if you buy at (high+low)/2, the close will mostly likely be higher if the day close in green AND day high is higher than yesterday’s high. Doesn’t this invalidate the requirement of a realistic backtest? Again sorry if I missed anything. Your knowledge and reports are greatly appreciated!

    • Comment left on:
      October 12, 2011 at 5:38 pm
      Cobra says:

      Yes, the mid price is always used, due to the back test software limitation (it doesn’t allow exact entry and exit price, it only supports open, close and mid price), I’ve explained this before and also here: http://www.cobrasmarketview.com/?p=2456, it’s fair because:

      1. The exit price is always mid price too, so sometimes it could exit worse and sometimes better, i.e. a breakeven stop loss doesn’t guarantee this is a win trade, assuming no gap down tomorrow but a very big down day, in this way, even the system has the breakeven stop loss but since the mid price is way below the breakeven price, it’d count as losing day. I mean in the long run, if you use mid price for both entry and exit, it’s fair. And I clearly explained this, I didn’t mean to blame you, I just mean I’m very honest about this issue because it’s very serious problem.

      2. In the real trading which is my original idea, say, higher than today’s high then it’s buy, so I’d place a buy stop a little higher above today’s high, thus it’ll be filled the next day if indeed the breakout happens. Should the next day closes in red which means the buy is not confirmed, I’d find an exit in the next couple of days because statistically, I can always find an exit in the next couple of days. But as you know, the back test software doesn’t support exact entry price, so I have to compromise it by using the mid price and the close as confirmation. Such a buy stop, again sometimes you get better entry than the mid price but sometimes you don’t, so again, in the long run, it’s fair.

      3. In your real trading, you don’t need know all those details, you can arrange your own entry as long as it’s a better entry than the mid price. This means if necessary you can enter several days later as long as the system doesn’t set a breakeven stop loss. Or the most simple way is to follow with half of your position at the close if you cannot judge intraday whether the day would close in red or green to confirm the entry and for the other half, you can find a better entry later. Some idea like this…

      Hope the above helps. Maybe I need a better back test software, but just the problem to me is time. I really really don’t have time to start with another system. And the most importantly, the CIS is meant to show the trend only, the sample entry and exit are just for reference.

      • Comment left on:
        October 12, 2011 at 7:53 pm
        Anonymous says:

        Thanks for all the great details! You are so kind… makes me felt like talking to an old friend. Your explanations are very clear. 

        By the way, if you ever need to do back test but don’t have time, please let me know and maybe I can help. I’ve been playing with various platforms for years, with several systems running live. 

        • Comment left on:
          October 12, 2011 at 10:59 pm
          Cobra says:

          Thanks for understanding, really appreciate. You just remind me that I need find time to verify every details of the system as now it gets more and more attention so it becomes more and more serious. I’d put this as the first priority. Thanks again.

          By the way, would you mind recommend me a good back test software? Thanks.

  7. Comment left on:
    October 12, 2011 at 5:33 pm
    Anonymous says:

    Cobra! Thanks for today. How do i auto signup for the comments below. Before I used to just press sign up as I was already logged into Disqus. Now even though im logged into disqus I have to enter my email everytime. Any easier way to do this ?

    Btw. Just wondering if you can do a small research post on NFLX when and if you get a chance please. I think it still has further room to the downside and will probably bottom out (very short term) around 200 DMA (98$) before earnings and then launch higher into earnings ? Who knowssss. Just trying to see what u think .

    Thanks again Boss!

    • Comment left on:
      October 12, 2011 at 6:03 pm
      Cobra says:

      I don’t need login every time, I think it’s your browser problem.

      I’d be careful not shorting hard on NFLX here, it might be bottomed, say 60% chances.

      • Comment left on:
        October 12, 2011 at 7:01 pm
        Anonymous says:

        THank you very very much! 🙂

  8. Comment left on:
    October 12, 2011 at 7:11 pm
    uempel says:

    Bullish percentages are all up, lowest BPNDX plus 6.38%, highest BPINDU plus 38.45%. BPSPX is hitting resistance – don’t know how important it is. Other chart is medium term SPX showing resistance at Fib Fan and MA 377…

    Btw, I don’t like these kind of days, they reek of Wallstreet insiders and remind me of a Russian gambling hall: some oligarchs decide which color is going to win, and win it sure does…

    • Comment left on:
      October 12, 2011 at 9:23 pm
      Anonymous says:

      uempel, are you concerned that the 377 has been met so quickly? 

      • Comment left on:
        October 13, 2011 at 1:17 am
        uempel says:

        GS’s weekly report last Friday stated that the market is undervalued. GS made the same assertion 13 months ago and we all remember what happened in the first days of September 2010 – market never looked back. 

        Now look at the trad P&Fs – it’s very, very unlikely that SPX will dip below 1200ish these next days, weeks. My assumption is that market will consolidate above 1200 and then try to break 1230 to the upside, cloud and P&F show some resistance up there. Of course, a Lehman Brothers incident might spoil the bullish game – but P&Fs show that market and big boys wants to push higher.

        As to 377: last time it misbehaved was in 1994, let’s not rule out that it’s in a 17-year cycle! 

        • Comment left on:
          October 13, 2011 at 1:38 am
          Anonymous says:

          thanks for your reply.  i agree that we have more on the upside to come over the next 1-2 months, but i can’t make the case for a re-visit of the stock market highs in that timeframe.  i actually don’t use P&Fs, haven’t added them to my arsenal as of yet.  i really like DeMark indicators though.

          it is possible that there won’t be any significant pullback here, and we’ll just grind higher at a slower pace; however, we don’t usually come out of high volatility zones with straight line grinding moves higher unless a higher overall high is coming (Mar 09, Feb 10, Sept 10, Nov 10).  if we just grind higher here, it will certainly be a warning flag for bears.  if you look at Mar 08 and Jul 08 rebounds (during recession) you see a very volatile relief rally, which is what i expect to see here, which is a warning sign that it is just a relief rally.

          so far we have not seen the volatility that i would expect on this rally leg, but i’m sure the next 1-2 weeks will determine which pattern we get.

  9. Comment left on:
    October 12, 2011 at 7:23 pm
    Sam IAM says:

    Hey Cobra -Last time McCllelan Oscillator was this high on the Nasdaq was late July before the panic selling. Here: http://stockcharts.com/freecharts/McSumNASD.html  Also $MMTW at levels signaling we are closing in on a  top: http://www.barchart.com/chart.php?sym=$MMTW&t=BAR&size=M&v=0&g=1&p=D&d=X&qb=1&style=technical

    • Comment left on:
      October 12, 2011 at 11:01 pm
      Cobra says:

      Yes, I saw that too, I just wish it could go a little higher tomorrow, then it’d be much safer to short. 

  10. Comment left on:
    October 12, 2011 at 8:28 pm
    • Comment left on:
      October 12, 2011 at 8:57 pm
      Anonymous says:

      I like your charts.  They are easy to interpret.  I agree that a downward move is imminent, but not to new lows.

  11. Comment left on:
    October 12, 2011 at 8:56 pm
    Anonymous says:

    The bear trade is back, if only for a week or so.  Potential “island reversal” tomorrow with a gap lower.  If that gap is filled after the open, I will enter a short trade there.
    50% re-trace of SPY is 114.78.  Two gaps to fill on the downside (119.93 and 117.03), so at minimum we’d see 117.03, maximum a 50% re-trace down to 114.78.  I will re-enter a long trade at 50% re-trace should we see it.  I expect a higher low in the SPY, which will jump-start the next leg higher.
    Medium term we are just starting on our way to set up the next big bear trade.  The earliest that could arrive would be early November, latest would be early December.  I’m looking for a low 20s VIX and 200 day MA visit in SPY as confirmation for next big bear trade.  I’m guessing that day will be Dec 1st (ISM day) which is followed immediately by nonfarm payrolls on Dec 2nd.  ISM should start showing material weakness by then.
    QE3 is not going to occur at Nov 1-2 Fed meeting because the S&P will be in 1200s.  Remember, last Fed meeting S&P was at 1193 and there was no QE3.  The Dec 13th meeting will be a little more tricky, as economic releases will start showing much more weakness, and S&P could be lower than 1193.  I’m guessing no QE3 at that meeting either as the Fed wants Congress et al begging them for help, and only a 1050 S&P reading or lower would do that. 
    As of now, QE3 won’t land until 2012 meeting (likely in January), after Greece next tranche is due and they wildly miss expectations again. The EU will not take kindly to yet another miss, and Greece will be forced to default.   Greece default fallout will hit markets hard (80% haircuts) and CDS triggers will cause chaos in financial stocks.  EFSF will be grudgingly moved up to 2 trillion in order to cover Spain/Italy.  That is also when QE3 will occur. The markets will rally frantically.

    That is also when the gold trade should enter its parabolic move higher as USD & Euro drop against all other non-pegged currencies and a currency war will erupt. Japan will be livid as the Yen strengthens dramatically, putting further pressure on their exports and govt finances. Same goes for China. The Canadian/Australian dollars should erupt higher along with commodities and we’ll be in a full-blown stagflation. The massive distortion in asset prices will eventually come back to haunt the Fed as sentiment will shift even further against them by mid-year. Commodities will rise much faster than stocks over that time period further exacerbating the economic downturn.
    This next set of bailouts/QE3 will be met with extreme discord among the taxpayers, and the Occupy Wall Street protests will just grow in strength.  The next President will be someone who promises convictions.  Either Obama changes his tune (likely) regarding prosecuting Wall St, or one of the Republicans uses the anti-Wall St wave in their favor (not Romney or Cain), potentially Perry as he has already gone after Bernanke.  Obama will regain his base with the anti-Wall St rhetoric, and they will begrudgingly support him.

    • Comment left on:
      October 12, 2011 at 10:59 pm
      Cobra says:

      Wow, thanks for the update!

    • Comment left on:
      October 13, 2011 at 12:37 am
      Anonymous says:

      All sounds possible. But the US economy may not be as bad as everyone projected. One noticeable evidence is the car sales. You just don’t get strong car sales with very bad economy. Other retail sector also showed strength. With sentiment so bearish (comparable to 2009 bottom), a significant up trend could be in the cards when nobody thinks it is possible. Time will tell.

      • Comment left on:
        October 13, 2011 at 12:53 am
        Anonymous says:

        I agree that an uptrend is absolutely in play right now, and will be until Nov/Dec.  The NAAIM sentiment matched March 2009 lows so that alone suggests a strong uptrend, and I agree with it.  As far as car sales and retail sales, yes they are still okay as are some other coincident and lagging indicators, but I look at things like Ceridian Pulse of Commerce, Inbound Containers at LA port, Restaurant Performance, and ECRI long leading indicators and see a stronger downside case over the next year.  It is not what is happening right now (coincident indicators) that matters, it is what is going to happen, and leading indicators are suggesting a recession.

  12. Comment left on:
    October 13, 2011 at 1:44 pm
    Anonymous says:

    I’m sure that this will be addressed this evening, but I was wondering if the Impulse system was officially stopped out today (since I believe the entering price, where the stop was moved up to, was hit)?

    • Comment left on:
      October 13, 2011 at 2:01 pm
      Cobra says:

      stopped out.

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