11/02/2011 Market Outlook (Bear Flag?)


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SHORT-TERM: A LITTLE BEARISH BIASED

The report today is merely a guess, no solid evidences.

As mentioned in the yesterday’s report, the SPY daily chart doesn’t look bad, so temporarily maintain the call for a 2 legged up, while the recent 2 days pullback marked the completion of the 1st leg up. However, I don’t believe today’s up is the beginning of the 2nd leg up, i.e. the pullback started 3 days ago isn’t over yet.

The chart below is the major reason why my guess is the pullback isn’t over yet: Could be a Bear Flag in the forming therefore odds are a little higher it’d continue down eventually.

SPY60min

The question though is, was the Bear Flag completed today? Or shall we see more up tomorrow? My guess is the Bear Flag was over. And here are the reasons:

  • Price overlap, so what we had was just a rebound, not the start of a new up leg. This shall prove the Bear Flag view is reasonable.
  • Could be a 3 Push Up in the forming. The rebound before the close looks like a typical back test of the previous high (before rolling over), a gap down tomorrow, would basically prove my guess.
  • According to the statistics mentioned in today’s Trading Signals, there’re 75% chances a red day tomorrow. The sample size is too small so it’s not a solid evidence but still worth some attentions.

SPY15min

INTERMEDIATE-TERM: WE COULD SEE MULTIPLE WEEKS RALLY, WILL NEED REASSESS SPX 1,000 DOWNSIDE TARGET

For why we could see multiple weeks rally, please see 10/14 Market Outlook for details.

For why SPX downside target at 1,000, please see 08/19 Market Outlook and 09/30 Market Outlook for details. I’m not sure about this call anymore, will need more evidences to reassess.

SUMMARY OF SIGNALS:
TREND MOMENTUM COMMENT
Long-term 2 of 3 SELL
Intermediate 4 of 5 BUY 4 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term DOWN 6 of 6 NEUTRAL
* = New update.

 

 

Chinese Transcript

SHORT-TERM: A LITTLE BEARISH BIASED

今天的报告纯属猜测,没有什么证据。

昨天的报告提到了,SPY daily chart看着不坏,所以大方向暂时还是维持2 leg up的判断,但是我不认为今天是the 2nd leg up的开始,换句话说就是我猜pullback还没有结束。

下面的图是我猜pullback还没有结束的主要理由:看着像是Bear Flag,因此continue down的可能性大一点点儿。

SPY60min

问题是,这个Bear Flag今天是否结束了?还是说明天more up?我的猜测是这个Bear Flag已经结束了,下面的图是理由:

  • Price overlap,所以这仅仅是反弹,不是新一轮上升波的开始。这个应该证明关于Bear Flag的猜测的合理性。
  • 可能是3 Push Up,收盘前的反弹是反转前典型的测试前高的动作,明天如果直接Gap down的话,基本就能证明我的猜测了。
  • 根据今天的Trading Signals的统计,明天有75%的机会收红,虽然样品太少,可能不是很有力的证据,但好歹也算是个理由吧。

SPY15min

INTERMEDIATE-TERM: WE COULD SEE MULTIPLE WEEKS RALLY, WILL NEED REASSESS SPX 1,000 DOWNSIDE TARGET

For why we could see multiple weeks rally, please see 10/14 Market Outlook for details.

For why SPX downside target at 1,000, please see 08/19 Market Outlook and 09/30 Market Outlook for details. I’m not sure about this call anymore, will need more evidences to reassess.

SUMMARY OF SIGNALS:
TREND MOMENTUM COMMENT
Long-term 2 of 3 SELL
Intermediate 4 of 5 BUY 4 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term DOWN 6 of 6 NEUTRAL
* = New update.
  • Anonymous

    I’m totally with you, Cobra. gap down please 🙂

    • Don’t bet my luck which I usually don’t have. 🙂

      • Anonymous

        of all the blogs I ve been reading online, yours is the most informative one. So winning or losing I will always be grateful for being able to learn some TAs from your site. With that note I want to ask you if attached chart is correct target measure move if neckline is broken for H&S pattern?
        Cobra: thanks in advance for your help.

        • Yes, you can measure like that, provided that:

          1.) You must use arithmetic scale. Normally you should use log scale to draw trend line because rise from $10 to $20 is different from $100 to $110. Sadly lots of people don’t know the subtle differences. By using log scale, would mean you cannot directly measure from the chart.
          2.) Any patterns are not valid until breakout/breakdown, so officially it’s not H&S Top yet.
          3.) Don’t count on H&S pattern, it’s not a reliable pattern.

  • Anonymous

    thx,ding

  • Anonymous

    Just took a look at the relative performance of SPY against QQQ, IWM, RSP, and XLF. From October 4th, all except QQQ outperformed SPY. From Aug 1st, only QQQ outperformed SPY, the rest have some catch-up work to do. Given the almost MAD today (and strong breadth), I still see that market could try to fill the gap from November 1st intra-day and then roll over. Actually, this possibility may still occur within the bear flag and bring the measured move up to 1185-1190 support area. Of course, a gap down below 1230 would nullify this scenario. I am also sceptical of this in that I saw the OEX put/call ratio too high today.

    Thx

    • Anonymous

      very good pt! if futures hold most likely will gap down below 1230 at open. So, very likely such scenario will be nullified.

  • dham pusha

    Where’s that guy who used to post with name “Ben Bernanke” on your blog, and would compete against you on his bullish targets versus your bearish? So this is how a competition is played, ha! If his horses are winning he would come here thumping his chest, and when they are losing he would just disappear. How convenient!

  • Anonymous

    Cobra,
    Do you see $SPX  MA200 being crossed during the next two weeks? If not, what else can you say about it?
    Thanks?

    • I don’t know yet, need see a few more days.

  • thanks cobra laoda

  • Anonymous

     While I do not like that advertisement that follows me up and down your site, I did like your call for lower.  I bought some TZA on the gap up this morning.  Thanks!

    • ad follow you up and down? you must use iphone? I don’t see the problem. please if possible show me the screenshot, thanks.

      • Anonymous

         Ahh, that’s kinda right.  I’m using my android phone to tether to my laptop using pdanet.  I’m hiding my tether from ATT which makes all sites on my computer pop up in “mobile” mode. 

        For what it’s worth, here are some screen caps.

        • I see, I’ll try to change tonight (cannot change now). Let me know tomorrow if you still have the problem.

        • I checked, seems no option to allow me to turn it off on mobile unit. You can close the ad, cannot you? Just every time you refresh the screen, you see the ad pop up again, right?

          • Anonymous

             Thanks for checking…. yes, I can close the ad.  No worries, 1 extra click to read such wonderful market insight seems a small price to pay! 🙂

            • Thanks. I’ll bring ipad home this weekend to see if I can turn off some ads to prevent your cases. My office network doesn’t allow Chitika ads at all, so cannot test it. I cannot promise anything, just want you to know I’ll try my best.

            • OK, I saw the problem. I’ll need ask Chitika for how to turn that off.

            • I’ve sent a mail to Chitika to complain this, hopefully they have solutions.

            • I removed the ad, you should see no problem now.

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