11/03/2011 Market Outlook (Watch the Oct 27 Highs)


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SHORT-TERM: THE LOW WAS IN; WHATEVER UP TOMORROW MAY BE ERASED THE NEXT MONDAY

Four cents:

  • The low was in. A little bit late to say this but in the pre-market session this morning, I already commented in today’s intraday comments. The Global ES chart below explained why and what to watch the next. Whether bears have hopes or not will depend on how the Oct 27 highs gets revisited.

1-2-3TrendChange

  • I’ll temporarily think that the revisit of the Oct 27 highs could be the bears’ chances, because from the Rydex Fund Asset Flow chart below, clearly retailers are way too bullish now. That said, we still need to see the breakout, whether it’s decisive or not, for the confirm. For now it’s just a guess, nothing more.

RydexFundFlow

  • If another up day tomorrow, then it might not be a bad idea to take some profits because chances are all the rises tomorrow would be erased the next Monday, because although up 1.8%+ today, it’s not a Major Accumulation Day, so statistically, 22 out of 26 (85%) chances, SPX will close below today’s close within 2 days (i.e. no later than the next Monday).

UpBigNotMAD

  • Tomorrow is the famous monthly Non Farm Payroll day, don’t forget the intraday pattern is to open high go lower or open low go higher. The chart below is from Bespoke. Why bother to mention such a pattern again? Because of the statistics mentioned above. Well, that’s all I can imply now, for aggressive traders only as trading against the trend is very risky.

NFPIntradayPattern

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 *UP 6 of 6 NEUTRAL
* = New update.

 

 

Chinese Transcript

SHORT-TERM: THE LOW WAS IN; WHATEVER UP TOMORROW MAY BE ERASED THE NEXT MONDAY

四点说明:

  • Low was in了。现在才说,可能晚了,但是早上pre-market的时候,我已经在今天的intraday comments里提了。下面的Global ES图解释了为什么,以及下一个看点。熊熊有没有希望,就看怎么revisit Oct 27 highs了。

1-2-3TrendChange

  • 我暂时认为可能revisits Oct 27 highs是熊熊的机会,因为Rydex Fund Asset Flow显示散户太牛了。当然,到时候还要看是否有decisive breakout才能决定,目前仅仅是猜测而已。

RydexFundFlow

  • 明天如果又涨的话,注意套利,因为很可能下周一会全部跌回来。理由是今天涨了1.8%+,但却不是Major Accumulation Day,这样就有22 out of 26 (85%)的机会,两天内(就是说最迟周一)跌破今天的close。

UpBigNotMAD

  • 明天是Non Farm Payroll day,intraday pattern一般是高开低走,或者低开高走。下面的图来自Bespoke。为什么又提这个intraday pattern,因为上面提到的那个统计,就提示这么多了,for aggressive traders only。

NFPIntradayPattern

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 *UP 6 of 6 NEUTRAL
* = New update.
  • cobra. 
    1. do we still have the bear flag on global ES ? 
     

  • Anonymous

    Very helpful as usual, Cobra. Thank you.

  • Great post tonight Cobra. Thank you

  • Anonymous

    thx,ding

  • Anonymous

    Thanks Cobra, if the market opens lower and we miss the consensus on NFP, is it still typical to close higher?

    • Yes, still possible. 

      A gap up tomorrow, we might not see it goes lower because for the past 2 days, we all had a gap up then later go lower to fill the gap, so the 3rd time will be different, I guess. Or maybe the 3rd times means fill the gap and red, unlike the previous 2 days, filled gap then back to the sky. All in all, the 3rd time will be different. I just don’t know which part will be different, I’ll assume that it won’t fill the gap. LOL

  • Cobra, am I to read that no matter tomorrow, today’s gains will be wiped out by Monday?

    • not today. any gains tomorrow (it’s now tomorrow 🙂 will be erased.

  • Also when you say low was in you are referring to 121.52 on spy correct?

    • yes, that’s correct. it’s for short-term. I have no idea about intermediate-term now.

  • David Do
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