12/02/2011 Market Outlook (Bearish Reversal Day)


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SHORT-TERM: IN WAIT AND SEE MODE

First of all, for December and Christmas Seasonality please refer to Trader’s Calendar  on the top right corner of the main page.

Still some are asking for where to register at this site (www.cobrasmarketview.com). There’s a Signup button on the top right corner of every page. Click that would bring you to the Membership Options Page where, you have to click “Check Out with PayPal button” to pay first before registering. Register at our Intraday Watering forum, which is free, doesn’t automatically register you at www.cobrasmarketview.com, which will not be free soon, because the Intraday Watering forum and the www.cobrasmarketview.com are two totally different systems.

Given the quality of my daily report, I believe most of you wouldn’t argue that asking for $10 a month is far more than a bargain, so I urge you to take the chance to lock in this $10 per month offer now. Don’t wait, because there’s zero chance that the price would go below $10, while 100% chances such an offer would EXPIRE SUDDENLY.

 

The Non Farm Payroll Friday went exactly as I expected, opened high but went lower, forming a Bearish Reversal Bar, so according to what I mentioned in the 12/01 Market Outlook, a top of some kind should be around now. However, the chart looks still missing one more push up to test the Friday’s high. Such a test would give us a chance to confirm whether the top was in. My guess is the test would not make a higher high or just a little higher high to run all the stops above the Friday’s high before rolling over.

SPYEvilPlan

According to my 7 Days Rule, generally a rebound from an important bottom should be up at least 6 out of 7 days (A rebound from an important bottom always meet the 7 Days Rule, but to meet the 7 Days Rule doesn’t mean it’s an important bottom). The significance of the red Friday is it forfeited our chances to meet the 7 Days Rule (therefore implying that the 11/25 low was not an important bottom) as we’ve already had 2 red days, plus a possible pullback the next week, so I will temporarily maintain the intermediate-term forecast for SPX target 1010ish. Will adjust the forecast depending on how the market unfolds the next week.

7DaysRule

Summarized below are all the reasons why I’m expecting a top of some kind is around:

  • Hollow red bar plus bearish reversal bar, two reversal like bars in a row, so chances are pretty high we’d turn down from here.

BearishReversalDay

  • VIX dipped below its BB bottom for 3 days in a row, highlighted in red in the chart below are all the past similar cases, see for yourself what happened thereafter.

VIX

  • DAX black bar seems worked perfect recently and I believe DAX leads.

DAX

  • Red Non Farm Payroll day usually means a reversal which in our current case means to reverse down.

NFP

  • Rydex traders, aka retailers are very bullish. The charts below are from Sentimentrader. The reason I mention those Rydex charts is I was worried about our Sentiment Poll which as of now looks pretty bearish, so I suspect that the market would surprise us the next week (as always). However, after seeing Rydex charts, it seems overall the retailers are not so bearish.

RydexBullBearRSISpread
RydexBetaChaseIndex

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 3 of 5 SELL 5 of 5 NEUTRAL Cobra Impulse in SELL mode; Non-Stop in SELL mode.
Short-term DOWN 6 of 6 NEUTRAL
* = New update.

 

 

Chinese Transcript

SHORT-TERM: IN WAIT AND SEE MODE

12月份以及圣诞的seasonality请见主页右上角的Trader’s Calendar。

还有同学问怎么注册,也是右上角的Signup,点击进入Membership Options page后,你需要先按Check Out with PayPal button,付了钱后才能注册。你在Intraday Watering那里注册的ID在www.cobrasmarketview.com是无效的,两个是完全不同的东东Intraday Watering是免费的,但是www.cobrasmarketview.com最终是要付费会员才能看的。

以我每天报告的质量,我相信绝大多数人都不会反对,$10已经是破产大甩卖价了,因此大家还是不要再等了吧,要知道,下面比$10还便宜的可能性是0,但Offer随时expire的可能性却是100%。

 

周五如我预计的一样,SPY高开低走形成了一个Bearish Reversal Bar,这样按照12/01 Market Outlook里的说法,a top of some kind应该就在眼前了。不过,从图上看,似乎还少最后一攻。这个最后一攻将是我们确认top的机会。我的预计是不会有higher high,或者稍微higher high一点点,既所谓的stop run。

SPYEvilPlan

一般重要底部的反弹至少都是up 6 out of 7,既所谓的7 Days Rule(重要的底部一定会符合7 Days Rule,但是符合7 Days Rule的不一定是重要的底部),而周五的下跌使得我们这一轮的反弹miss了这个rule(因为已经跌了2天了),加上我预计下周会有pullback,所以暂时维持Intermediate-term里关于SPX target 1010ish的判断,将根据下周的情况再看有无调整的必要。

7DaysRule

下面总结一下我所有看a top of some kind is around的理由:

  • Hollow red bar加Bearish Reversal Bar,连着两根反转棒以后反转的的机率是比较高的。

BearishReversalDay

  • VIX dipped below its BB bottom for 3 days in a row,大家看看红色高亮部份,此后都发生了什么?

VIX

  • DAX的黑棒棒看起来是很准哈。一般DAX leads。

DAX

NFP

  • Rydex traders,就是说散户,看着很牛。下面的图来自Sentimentrader。提这个的原因是我本来担心我们自己的Sentiment Poll看起来比较熊,所以我怕下周大盘会surprise us。不过,从Rydex的情况看,大部份散户并不熊。

RydexBullBearRSISpread
RydexBetaChaseIndex

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

    thx,ding

    • Anonymous

      THanks Cobra for your excellent call.

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  • Anonymous

    I will pay $10 for cobramarketview.com.  Totally worth it.  I will, on the other hand, not pay money to read the Intraday Watering posts in it’s current form. B/c probably 90% of the posts are people other than Cobra giving their opinions on where they think the market will go and why.  That’s great and all, but I can get that at yahoo. (not that I ever do…)

    Now, if you Cobra had your own thread in which you were the only one allowed to post anything, and you also tweeted/emailed/contacted users in some way to alert them that you have made an intraday update post, then yes, I’d be much more willing to pay for that.  Just my two cents.  Hope your weekend is going well.

    PS – Go BROWNS….beat those dirty rat birds.

    • Thanks. I’m confused though. Intraday Watering forum is free. That $10 is for http://www.cobrasmarketview.com, not for intraday watering forum, you know that, right?

      • Anonymous

         No, I guess didn’t know that.  I thought you were going to charge 10 for cobrav.com and another 10 if one wanted to see the message board.   I’m happy to hear that, thanks for clearing that up.

        • uempel

          Brown_Fan, I’d like to add that we can learn quite a bit in the intraday, not only from Cobra. Some of the guys out there are quite astute. I don’t recall all the names (it^very late at night), but e.g. Al_Dente, Dow Trader and some others know what DT is all about. They use different techniques than Cobra, but if you can afford to spend/invest/waste your time as a silent observer you sure can pick up bits and pieces in order to improve your trading.

          Cobra is great, but you can’t copy him 1:1, extremely important that we all develop our own trading style. It’s not only Cobra, it’s also the diversity of ideas, which makes his blog/forum attractive.

          • Anonymous

            Even though I probably came across this way, I certainly meant no disrespect to you or any other regular poster in his thread.   I enjoy reading everyone’s thoughts and indeed have found many posts to be helpful, I was simply just hoping not to have to pay for them! 🙂   I check in often and will continue to do so.  Thank you!

  • Anonymous

    I paid $10 mainly for the reason that I have learnt a lot in the last two years from Cobra’s forum and his market view. As a by-product, I also made some money from the stock market through my intuitive sense slowly developed by reading Cobra’s reports. The majority of my investments other than houses are in my retirement accounts (mutual funds) that do not allow me to do more than one exchange per day. Therefore, Cobra’s daily reports are especially important to me.

    Thank Cobra for your great efforts and exceptional personality.

    • Thanks, appreciate! 

  • uempel

     Ellipses show that it’s unlikely that the high is already in. I’m expecting a futile attempt to break SPX 1272…

    • uempel

      Here a different ellipse which shows what’s happening. What’s for sure is that tomorrow Monday is going to be interesting, 

    • Anonymous

      Not sure if these circles and ellipses do tell the future where market is heading.

      • uempel

        No, they are support and resistance indicators, but clusters usually mean pivots and there is a cluster sitting up there at approx 1272. Interestingly BPSPX is also suggesting a bit more upside. 

        And something else: the theoretical foundation of most TA indicators/tools is Newtons 3rd. Take momentum. it’s the speed of the move. I know trading desks which trade solely with momentum (several time frames) and S/R. Take channels – it’s pure Newton mechanics, actio/reactio. Or take ellipses: not much different than a channel, only price moves around a center point and not around a center line. Ellipses are like round channels.

        I’m attaching a momentum indicator of SPX showing 3 time frames: notice that the shortest time frame was down Friday morning, but the longer time frames still look ok, the only drawback is their sub-zero positon. The guy who sent me the chart is more bullish than I am – the arrows show his thinking. But note that he does not trade his own money…

  • The interventionist are coming…so this should be an interesting week

    “Next week is critical for the Euro Zone. The EU leaders meet on 8/9th December to finalise (hopefully) their proposals for the future of the Euro/ Euro Zone.”

    • Anonymous

      time to load up on some strangles.

  • Rip Van Trader

    Daily SPX charts want a lower low than 11/25.  McOsc wants a lower low, too.  Bonds have significant positive divergences in the one and four hour time frames recently and in the daily time frame between 10/10 and 10/26ish, not to be ignored.  I think it’s possible that they could have a good push up.

    Not sure how much higher bonds can go.  They could be already done, or go higher to long term trendline, around 134 for 10 yr.  I do not believe cup and handle formations that could take ZN to 150s, and there are negative divergences in long term time frames that indicate that they will fall after this current rally, or perhaps one more (over a span of many months) because monthly RSI and MACD have made higher highs in this rally.  RSI bottoms have been pointing down since 110 in June 2008.  The last times bonds peaked, in 03 and 09, bull markets in equities followed.  Wouldn’t be surprised to see this  happen again.

    While weekly 10/20 MAs are uncrossed in the monthly time frame and while BB keeps getting by with his magic tricks, anything can happen.  I’m just trying to follow the charts and momentum.  Bears ought to have a good week this week.  Will they make the lower low?  Got me but I will be on board in a modest way.

  • Anonymous

    Excellent report as usual!

    Never ceases to amaze me at people who believe we just go up up up. In EVERY case below, 1-2 case a higher high made next day (but small) but in every case, day finished in red followed by more red days, as follows: (From Fri close)

    Comp — black doji
    IWM — black doji
    Dax — black doji
    NYA — black doji
    RUT — black doji
    RUI — black doji
    OEX — black doji
    Spy — doji
    Spx — doji
    Indu — doji
    QQQ — Huge BRB (bearish reversal bar)
    NDX — BRB
    Sox — BRB

    Before we get on our space ship to galaxy not found yet with no ticket, can we look at top 10 stocks in Indu and Comp, which included in the above case? (Top 20 largest cap stocks)

    MSFT — two huge BRB
    AAPL — black doji
    GOOG — evening star?
    CSCO — doji
    ORCL — Huge BRB
    INTC — Huge BRB
    VOD — Black doji + abandoned baby
    Qcom — Huge BRB
    Amzn — doji
    Amgn — Black doji
    IBM — Black doji
    Cvx — BRB
    Cat — BRB
    MCD — Black doji
    Xom — Black doji
    MMM — Huge BRB
    Utx — Huge BRB
    BA — Black doji
    KO — Black doji + abandoned baby
    PG — doji

    After Cobra’s report, I guess I can see how people might believe we go up even 1 point on the next Monday but anybody believe we finish Monday in green must be retail smoking crack. The bull rolled over Friday, thats what this says — I guess only one exception — Yoda and Darth Vader print Euro so fast that Santa Clause can provide QE3 next week, QE4 week after and QE5 week after that so we can go up 8% next week, 8% week after and 8% week after that cause we can’t ride bull, we have to ride dog so we can get nose bleed and finish year +32%. Cobra report for week of 11/21 say “Seasonality, up, day before Thanksgiving up, day after Thanksgiving up” and What happened? Now says:

    12/12: Triple Witching Monday, SPX up 7 of 10.
    12/16: Triple Witching Friday, SPX up 20 of 28.
    Triple Witching Week, SPX up 21 of 26.

    We all know what it going to say week of Christmas. Bear Market — get use to it! We not in bull market, get it? We in Bear Market! Market always do what least amount of people expect, especially in Bear market. As evidence by Cobra retail report, big money suck in retail money then slam door leave retail stuck on doji and bearish reversal bars high up in galaxy — same as week of 11/21, see Cobra retail report for then — I guess we buy buy buy, even buy new bible where we can pray pray pray and hope hope hope so we can go up up up to galaxy not even found yet. Then we also need pray pray pray that nose bleed don’t get replaced by Red ass.   

    • Anonymous

      bear markets kill both bulls and bears. judging by the tricky nature of the market that has both bulls/bears guessing, i agree with u that we are indeed in a bear market.

  • uempel

    Cobra, ha, ha, ha! I thought this might happen, your poll shows Fibonacci ratios!

    • LOL. The force of Mother Nature!

  • Anonymous

    Cobra, can you paste in the chart to look where commercials are? Thanks…

  • Anonymous

    The market has rallied as I predicted due to a very low ChiOsc on SPY daily. Unfortunately, there will be a pullback but it will still be a dip buy because ChiOSc will only go to extremes again. The pink line here is kind of my expectation.

  • uempel

    Sunday 18.05 pm, December futures up at 1253… (Charts courtesy of Disqus, don’t know why they are here…)

  • False Break on the Bull Wedge

    The neat part about this one is that the false break, an Egg embryo pop,
    and the Bernoulli 177 support were all at the same place.   I went
    seriously long.  Seriously enough that I was questioning my sanity on
    Saturday.

    Here is the prediction

     Here is the results (so far)

    http://oahutrading.blogspot.com/2011/12/false-break-on-bull-wedge.html

  • Anonymous

    Thanks, Cobra.

  • Anonymous

    Cobra: never got the email “test spam”, but I got the “congratulations your membership is approved.” So I assume I am good to go and when the day comes that the Market Outlook is behind the pay wall I will just enter my password and continue to enjoy the fine content.

    For those who have not subscribed hurry up! Do it now before it’s too late. You don’t want to come here looking for the daily Market Outlook and miss it. I predict the intraday watering comments will be full of disappointment and recrimination on the day that Cobrasmarketview goes behind the pay wall. Ahhh If only I could have locked in $10 for three years. This will just prove the truth of the old adage “you snooze you loose”.

  • One of the member posted EUR/USD chart showing falling wedge. Searched for the post. Couldn’t find it. Please point me to that chart.

    Thanks.

    • HighRev

      Here’s an update.

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