11/07/2011 Market Outlook (A Reliable Top Signal)


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SHORT-TERM: IN WAIT AND SEE MODE

Two cents:

  1. The big picture, I still suspect that a top of some kind was in or very close. Pay attention to “Suspect”, I’m not short yet. Again, Market Report and Trading are different. If you don’t allow me to guess top or bottom while instead simply repeat everyday that the trend is up (or down, well usually I’m not allowed to say trend is down), would you come here to read my report? Trading on the other hand, is different, the less guess the better because the most important thing is to follow the trend, so we should try our best not to front run the market.
  2. The intraday reversal today is not enough to convince me that we’d be up huge from here because from the chart below, still the red line above is not decisively broken so still could be a back test of the previous high before rollover, especially such a back test is already 2 legged, which is not a form of strong push up, instead, it could be a sign that bulls are exhausted. 

SPY15min

As for why I suspect that a top of some kind was in or very close, I’ve presented 2 reasons in the 11/04 Market Outlook:

  1. Red Non Farm Payroll day usually means a reversal which in our current case, means to reverse down.
  2. Rydex Traders (retailers) are way too bullish.

And today I’d like you to meet our 3rd witness, a record high of NATV:NYTV, which is a very reliable top signal. That said, everything has exceptions and this signal is no exception, so if you think this time is different, well, sure, as you wish…

NATVvsNYTV

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 3 of 3 SELL
Intermediate 4 of 5 BUY 5 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: IN WAIT AND SEE MODE

两点说明:

  1. 大方向,我还是怀疑the top was in or very close了。注意,只是怀疑,我并没有做空。Again,Market Report和Trading是不一样的。Market Report,你不让我猜顶或者底,天天告诉你trend is up,你会来看吗?Trading则一定要顺势,尽可能不要front run the market。
  2. 今天的盘中反转还不能说明下面要大涨特涨了,因为从图形上看,并没有decisively上破红线,因此还是有back test the previous high before rollover的嫌疑,特别是这个back test居然用了2 leg,而不是一气呵成,这是比较吃力的形状,有牛牛力竭的嫌疑。所以,看明天吧。

SPY15min

关于我怀疑the top was in or very close的理由,在11/04 Market Outlook里说了两条:

  1. Red Non Farm Payroll往往意味着转折。
  2. Rydex Traders (retailers)太牛。

今天我看到了第三个理由,NATV:NYTV spike了,这是个可靠性非常高的信号。当然啦,啥都有例外,你要说,也许可能大概这次不一样,我也没有意见。

NATVvsNYTV

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 3 of 3 SELL
Intermediate 4 of 5 BUY 5 of 5 NEUTRAL Cobra Impulse in BUY mode; Non-Stop in BUY mode.
Short-term UP 6 of 6 NEUTRAL
* = New update.
  • Anonymous

    Nice Dr Cobra…  

  • Anonymous

    I’m not sure today showed us anything Friday had not already:
    http://i42.tinypic.com/of7rsy.png

    • Interesting, thanks.

  • Anonymous

    Just curious, how do you gather all the statistics?  Is it done manually or is there a tool?

    • Most are manually, some via back test software. NATV:NYTV is too simple for back test software. Frankly, manual back test is the best.

  • Anonymous

    must read report everyday! Thank you so much! 

  • happy chen

    thank you. I start to read here before and after market time. Regret that I did not come here earlier.

  • Anonymous

    test

  • Anonymous

    Cobra-  I read your report every day, and love it. But I am curious when you say “Trading on the other hand, is different, the less guess the better”

    Although I understand completely what you mean by that- I’m unclear as to when you actually *would* enter a short position. What would make you feel comfortable enough to pull the trigger and enter a position based on what we are seeing now in SPY/SPX?

    • Anonymous

      would you simply wait for a breakout above 126.5 to fail- and go short then.. or would you wait until it breaks down below 124 (and miss the whole move from 126-124)  ..or other?

      • That depends, because I can sense the trend change intraday, but generally, breakdown below 124, you be I’d pretty much short at that time. Pay close attention to my Short-term Demo Account, you’d know when I’m fully in short.

        • uempel

          Your answer is less philosophical than mine… There is something else about Tiki’s question which is interesting: he is focussed on the short side, as is my gut feeling too (yours too I presume). My gut feeling is one of my best indicators – it’s mostly wrong. So presumably the market has further upside.

          • I really wish a gap up tomorrow as I should have closed the long position I entered today but I overrode my rule again today. Usually I’d be punished. Let’s see.

          • Hmm, you still are awake, so you must have a very large short position at hand now. 🙂

    • uempel

      Tiki, you raise the big question. Whoever knows the answer is wise and rich, knows the quintessenz of trading. Question can’t be answered easily, because too many factors are involved. Many obvious facts, but also gut feeling. Remember when SPX hit 1370? – that was a clear signal, but often signals are less obvious. We can test your savvy every day on the one minute chart – do we spot the lows and highs? Same game with the daily and weekly charts, just on a grander scale.

    • I have a few fixed setups (or rules), they’re all back tested to make sure at least worked 80% percent of the time in the past, so whenever anyone of them got triggered, I’m in. It doesn’t have to be short, I mean any direction as long as it fits the setup. And this is what I mean “less guess the better”. 

      I know you’d ask, then, why bother to do market analysis every day? Well, it’s complicated, you can check FAQs here: http://www.cobrasmarketview.com/you-seem-have-no-faith-in-your-own-report/ and it’s just a simplified answer, the reality is more complicated.

  • Anonymous

    Thanks Cobra.  Can I ask you what the chart underneath the NATV:NYTV chart?  i.e. what is the line under the SPX daily line graph?   Great work as always, boss!

    • MACD(10, 200, 1). It’s the normalization of NATV:NYTV.

      • Anonymous

        Thanks!  That certainly is one big spike we have right now…

  • Anonymous

    thx,ding

  • uempel

    BPNYA up 0.33%, BPCOMPQ down 1.12%, BPOEX, BPSPX and BPINDU flat, BPNDX down 1.45%. Translation: NYSE stagnant, Tech weak, big caps flat. BPNYA chart signals  don’t rush…

    • From my understand of your chart, if multiple resistances/supports confluences together that would be a very strong resistance/support, so the top should be now, right? But it seems you’re thinking of the pink line above, but that is just one line. How come you think one line is more important than multiple lines? 

      • Anonymous

        Fwiw, I focused on the PPO rollover and the short time lag to a BPNYA top (dotted vertical lines), rather than the various colored grid overlaid on the BPNYA price action.  In other words, a message of:  “close, but not *just* yet.”

        Thank you both Cobra and uempel for the incredible insights you offer daily–there are few places where I feel I learn more.  I know I’m not alone.

      • uempel

        Yeah, I agree with ZimZeb. Pls also check the tops which formed after impulsive sequences in 2009: following a first top there was a pause, afterwards the bulls pushed the bullish percentages up to new highs. If I focus on this chart without listening to the political/economical noise I give the bulls a second chance to break 1265. But note that I’m not backing up this prediction with money. I’m waiting for a more obvious pattern before I short or long.

  • Anonymous

    THX!!!

  • Anonymous

      As long as YM above 11800 then ES target is 1367

  • HighRev

    From reading the blog and comments (here, there and everywhere) I see that I’m still in the minority. ;-(

    The other side of the coin?

    http://mediacdn.disqus.com/uploads/mediaembed/images/163/4245/original.jpg

  • I am beginning to think this month as an up to 1290 region and back to 1220 region. I am talking from an EW point of view. Then the December rally to 1300+ will begin.

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