11/21/2011 Market Outlook (Rebound may or may not, but the selling is not over yet)


Cobra's Market View Private Messaging System shows:


SHORT-TERM: REBOUND MAYBE, BUT THE SELLING IS NOT OVER YET

No argue, 1-2-3 Trend Change confirmed, plus Non-Stop model is in sell mode now, which is one of two of my major intermediate-term models, so officially to me the intermediate-term trend is down now.

  1. Maintain the target marked by the tinted area in the chart below.
  2. I’m not sure if we’d see rebound tomorrow, but odds are high there at least will be a lower low ahead, so if without a lower low first the market rebounds right at the open, then chances are it’s a sell opportunity.

SPYEvilPlan

Why isn’t the selling over? Three reasons:

  • 2 Major Distribution Days within 5 days means a strong down pressure, so odds are high that the selling isn’t over yet, although may or may not see a rebound first.

2MDDin5Days

  • The intraday RSI is way too low, which means the car is accelerating downhill, and because of the law of inertia, unlike we Martians, you Earth people simply cannot reverse the car uphill all of sudden without decelerating first. Such a decelerating process represented by RSI is positive divergence (as RSI measures momentum, not price. Let’s say, momentum equals to acceleration, while price equals to speed. Speed can only be slowed when the acceleration is zero first, which means RSI must be weakened first before the price can be reversed. It’s simple physics you Earth people learn at high school, while we Martians are born to know, yeah...). So far I don’t see such a divergence, so chances are the selling isn’t over yet.

RSIPDNeeded

  • Today is a Major Distribution Day, so 71% chances there’ll be a lower low first tomorrow. The chart was wrong 3 times in a row, given it’s 71% successful rate, I won’t hope it would fail again tomorrow.

LLGuaranteed

VIX black bar is the most obvious reason I saw for a rebound tomorrow. It’s not a very solid evidence so that’s why I said I’m not sure (may or may not). The reason I mention here is to let you know, yes, I see the chart. I admit the pullback this time is a little abnormal because VIX lags. Usually VIX should lead, so there’re some chances that the pullback is a huge bear trap. By the way, take a look at 1.2.0 INDU Leads Market if interested, so far INDU isn’t leading down too. I’m not saying I don’t believe the trend is down which I do, I just put a little and a little piece of puzzle together, and hopefully, gradually, and eventually, these puzzles will be solid enough for me to call a bottom. This is how my report usually works.

VIX

INTERMEDIATE-TERM: EXPECT MULTIPLE WEEKS SELLING AHEAD, TARGETING JUNE 2010 LOWS AROUND SPX 1010ISH

See 11/18 Market Outlook for more details.

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

 

 

Chinese Transcript

SHORT-TERM: REBOUND MAYBE, BUT THE SELLING IS NOT OVER YET

没说的,1-2-3 Trend Change确认了今天,加上两个intermediate-term model之一的Non-Stop model已经是sell信号了,所以对我来说,算是中期正式为下降趋势了。

  1. 维持下图中的target。
  2. 我不确定明天是否反弹,反正至少还有个lower low,所以明天如果没有lower low就直接反弹的话,这个反弹是sell的机会。

SPYEvilPlan

为什么说还没有跌完?三个理由。

  • 五天里有两个Major Distribution Days,这个下跌动能够大的,所以可能有也可能没有反弹,但是总之几率比较大的是还没有跌完。

2MDDin5Days

  • 今天盘中RSI太低了,这是说车再向下加速行驶,因此在地球上是不可能不经过减速就突然向上的。这个减速的过程反映在RSI上,就是positive divergence。目前我们并没有看到这样的divergence,所以应该还没有跌完。

RSIPDNeeded

  • 今天是Major Distribution Day,因此有71%的机会明天会有lower low先。这个图已经连错3次了,明天总该对一次吧?毕竟,71%的几率放在那呢。

LLGuaranteed

VIX黑棒棒是明天可能有反弹的理由,不是很充分,所以我说不确定明天是否会有反弹。这里提一下,表示我看到了。最近的下跌很奇怪,VIX不怎么配合,这个有待观察,因为VIX leads,所以不能排除是假摔的可能。顺便说1.2.0 INDU Leads Market,有空也可以自己看看,INDU也没有leads down。注意,我不是说不相信trend is down,开头刚说了trend is down,这里怎么会马上就打自己嘴巴呢?我只是一点一点的搜集反面证据,直到有一天这些证据变的足够使我喊底为止。我的报告一般就是这么一点点拼凑出来的,大家了解一下啦。

VIX

INTERMEDIATE-TERM: EXPECT MULTIPLE WEEKS SELLING AHEAD, TARGETING JUNE 2010 LOWS AROUND SPX 1010ISH

See 11/18 Market Outlook for more details.

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

    Cobra, thanks for the report.  Is your target of S&P 1010 supposed to occur before the start of the Santa rally ??  Thanks 

    • I think so. What do you think?

      • Anonymous

        I think that is very possible.  But Bulkwoski wrote on his website today that his prediction was for the market to return to the breakdown point of the triangle before Dec 1st and then resume it downward movement.  I do think that the weekly Stoch for the NYSI sell signal will work this time.  I do believe that S&P 1010 would bring out the buyers for a Santa rally but they might show up before then at 1076 .

  • Anonymous

    thx, ding

  • Anonymous

    Like i posted here two weeks ago expect a 20% haircut by end of year!  Next stop is 1160 on the spx.  Believe it my dirty little twats!

  • cobra can you give me permission to post one of your charts ( the link ) to the forums at BULLISH CROSS
    is the Vix chart that is great observation and wanted to save it . let me know thanks 

    I started posting a thread on some of the most important andys chart for quick reference.
    this would only include only charts like the vix not your evil plans or your market outlooks

    let me know if cool ok otherwise  i save the link for me for future reference.
    🙂 

    I can post your Main link so people can go back to your main page to see more of your great stuff…

    • Sure, no problem. Thanks.

    • Sure, no problem, please go ahead. Thanks.

      • thanks cobra, you are famous in BC !! 🙂 thanks for all this awesome reports…  I always had something for marsians !!!! : ) lol thank you !

  • Anonymous

    Cobras what happened with that DGP trade?  That wiped out a good chunk of your yearly gains.  Just wondering for a trading perspective what you would have difference?

    • I said the other day that I knew I must close at least half of the pyramid position. But it’s mechanical system, I cannot override it. You’ll find more often than not when you override your system, you’re mostly wrong, so nothing regret about that. It’s what I’m testing for. 

  • Anonymous

    No love for NDX? I think I’ve seen this pattern before but I don’t know the name, same on Dow

  • Anonymous

    Thanks Cobra.

    For the VIX black bar.
    “VIX black bar is the most obvious reason

    I did calculation last weekend. My result says, VXI black bar, just very slightly bullish. Do you have nay comments?

    If VIX closed black (up but close lower than open), Next day?
    119 days next days SPX up, 99 days SPX down. still about 50-50 chance.

    If VIX closed black after two days up, Next day?
    53 days next days SPX up, 34 days SPX down. Now 60-40 chance.

    If VIX closed black after three days up, Next day?
    21 days next days SPX up, 12 days SPX down. Now 64-36 chance.

    link
    http://hutong9.net/forum.php?mod=viewthread&tid=149708&fromuid=16673

    • 60% chances are still bullish. Also you cannot simply count how many days up then black bar. It could up, say 3 days, then down 1 day, then black bar, as long as it’s in an uptrend, the black could mean reverse down. 

  • Anonymous

    With all indices now below the lower Bollinger Band and the McClellan Oscillator below -200, things tend to get nasty for the stock market.   SP also closed below its 50 day average today.

    USO (crude oil) and $xeu (euro) did put in hollow bars today so I see the possibility for a bounce tomorrow. But I prefer the Summation Index to continue to run at its current pace.

  • uempel

    Instead of always looking back at 2008: I checked out SPX’s behavior after the top in March 2000. So far the 2011 scenario is very different, but have a look at MA 55: check its usefulness as support/resistance (now at 1204) and as a trend indicator (rolling over at the moment).

  • My view on Indices. This is FTSE but similar patterns are to be seen across all major U.S Indices.

    Basically, there might be support here to turn what was a descending triangle into a falling bullish wedge:

    http://www.indexswingtrading.com/wp-content/uploads/2011/11/FTSE-4-hourly-22nd-Nov-2011.jpg

    • uempel

      Another point of view: FTSE could rebound up to 5350 for a good-bye kiss to the H&S baseline…

  • uempel

    Instead of always looking back at 2008: here a view of 2000 and a comparison with 2011. So far the 2011 scenario is very different, but have a look at MA 55: very useful as support/resistance and as a trend indicator.

    • In general what is important about the 55 MA ?

      John Noyce (A great Technical Analyst working for Goldman Sachs in the UK) always holds a high level of importance to the 55MA but I’ve never understood why. Any ideas?

      • uempel

        Wilfrid Noyce yes, Robert Noyce yes, I didn’t know John…

        It’s the sequence 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, also in use are 191 (5 x 38.2) or 309 (5 x 61.8).

        I never tested the validity or these Fib numbers scientifically, but 34, 55, 144, 377 and 610 work well on the daily. For the weekly I sometimes divide by 5.

        I know nothing about TA at GS, but TA at CS applies these numbers too…

  • denali92

    Per previous posts, a Thursday opex week low should equal a low on the Monday post opex – check April and July 2011….  Interestingly, the rallies out of both of those periods eventually died in a BIG way…..  Anyway, I see a rally till at least Wednesday – possibly Friday….

    For me, next key turning point is right after Thanksgiving, as we have had an important SPY low for the last 4 years on the monday after Thanksgiving (though in 2009 – Futures had a low on the Friday after…)

    The key thing is that right after Thanksgiving is a turning point…. so it also could be a top…..  it is just that it has been a low for the past 4 years!

  • Anonymous

    …”these puzzles will be solid enough for me to call a bottom” . What bottom are you talking about Cobra, if you do not mind?

  • Anonymous

    Cobra: please share with us previous data of Santa clause rally, e.g. Avg gain and duration of rally
    Thanks

    • I’ll eventually.

  • uempel

    RSI/200 has been a successful indicator for important downturns on the daily SPX. A break below 50 is a sell. The game didn’t work in summer 2010, but otherwise performance was flawless (ok, one false signal in June 2008). On Monday 21st RSI/200 dropped below 50 and that’s a sell signal.

    • Anonymous

      whats up unempel, hope your trading has been going well

      I use RSI techniques learned in this book:  http://www.amazon.com/Technical-Analysis-Trading-Professional-Constance/dp/0070120625

      fwiw, I believe RSI has given all the strongest warnings this year, especially in some of the high flyer individual names and that you are on the right track 

      I have mentioned my wave count here several times over the last several months but it is techniques like the ones in the book above that I execute on, e-wave is just a big GPS device that requires updates on a fairly regular basis. 

      gl 

  • Anonymous

    thanks cobra laoda

  • Pingback: 11/21/2011 Market Outlook (Rebound may or may not, but the selling is not over yet)()

  • Pingback: 11/22/2011 Market Outlook (Descending Triangle) | Cobra's Market View()

© 2013 Cobra's Market View — All Rights Reserved.