12/06/2011 Market Outlook (Double Top or Ascending Triangle?)

SHORT-TERM: A TOP OF SOME KIND COULD BE IN

The market went exactly as expected in the yesterday’s report, that indeed bulls made another attempt to test the previous high but couldn’t make a higher high. However bears didn’t seal the deal either so kind of a key day tomorrow, that bears must breakout the blue line below to form a Double Top therefore confirm the reversal, while bulls still have a hope of forming an Ascending Triangle, so bear to be or bull to be, still hard to say. From all my recent reports though, the chances of breaking on the downside are much higher.

The CPCE top signal mentioned yesterday is confirmed today.

As for very unique things today, except that both VIX and SPX up on the same day for 2 days in a row mentioned in today’s Trading Signals, the ISEE Indices & ETFs Only >= 100 certainly isn’t a good sign for bulls as well.

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 BUY mode; Non-Stop in SELL mode.
Short-term	DOWN	6 of 6 NEUTRAL

* = New update.

Chinese Transcript

SHORT-TERM: A TOP OF SOME KIND COULD BE IN

今天的走势跟昨天报告里预料的一样，牛牛再次测试前高，但未能形成higher high，不过熊熊也未能确认反转，因此明天是个key day，熊熊要下破蓝线，形成Double Top，才算确认反转，而牛牛则还有Ascending Triangle的希望，所以最终是牛是熊，还很难说。当然，从我们最近的分析，以及图形是典型的3 Push Up看，明天应该下破的机率比较大一点。

昨天提到的CPCE top信号，今天算是确认了。

今天比较特别的地方，除了在Trading Signals里提到的Both VIX and SPX up on the same day for 2 days in a row以外，ISEE Indices & ETFs Only >= 100也不是什么对牛牛友好的事情。

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 BUY mode; Non-Stop in SELL mode.
Short-term	DOWN	6 of 6 NEUTRAL

* = New update.

18 Comments

Anonymous on December 6, 2011 at 9:07 pm

Nyse up and NYMO down. Thanks for the report Cobra. ON Dec 1st Bulkowski predicted on his blog that the market would go down the next two weeks to 1200. Whenever I believe him, he is usually wrong. When I don’t he is always right. Cobra, you have talked about this before, could you please tell me why that is because I have thought about it for a year and said the same thing about you and you have said it also. I can only guess this is the same for many other people. Thanks

Cobra on December 6, 2011 at 9:38 pm

That’s just a coincidence. Your memory tends to remember a few incidents so you feel this way.

Consider me as a mechanical model, say, normally I have 90% winning rate, but if you don’t blindly follow (I don’t mean you should blindly follow me, it’s just an example), then there’s no way you have the same winning rate. Normally you end up with very bad winning rate.

I noticed SPX up while NYMO down, just the up was too little otherwise it’s a solid top signal.
- Seawaves on December 6, 2011 at 11:42 pm
  
  NYMO/SPX divergence looks very similar to that in 11/25 bottom but just opposite.
  - Anonymous on December 7, 2011 at 7:55 am
    
    +1
- Anonymous on December 7, 2011 at 1:17 am
  
  Cobra, most likely the moneyflow must have been negative again today.

Anonymous on December 6, 2011 at 9:19 pm

thx, ding

Anonymous on December 6, 2011 at 9:39 pm

maybe this third time’s the charm and the top is really in this time??

Anonymous on December 6, 2011 at 9:53 pm

Thanks Cobra, further supporting the bearish case, QQQ and $BKX failed to come close to yesterday’s high, while SPY double topped.

d w on December 6, 2011 at 10:48 pm

Thanks Cobra!

Anonymous on December 6, 2011 at 11:04 pm

Hi, Cobra: DJX has made higher high today( Dec 6), do you count it?

Cobra on December 6, 2011 at 11:05 pm

No. It’s because of IBM. All they need to are to lift IBM.

Anonymous on December 6, 2011 at 11:38 pm

First time to leave a comment.

For SPY we have another reversal bar today, four in a row, any statistics on that?

Thanks Cobra.

Cobra on December 7, 2011 at 12:00 am

That’s a problem for bears actually, if 2 to 3 reversal like bars, that might mean reversal but if too many reversal like bars, it could mean consolidation therefore implying a continuation.

uempel on December 7, 2011 at 2:19 am

Everybody is so bearish here – note that the bullish percentages are still moving up: BPNYA up 1.14%, BPCOMPQ up 0.56%, BPOEX up 1.54% BPNDX flat, BPSPX up 0.66%, BPINDU is flat.

Here a close look at BPSPX:

uempel on December 7, 2011 at 5:07 am

Here a different view of BPSPX, conveys the same message as my first chart: resistance 61/62.5 is crucial.

denali92 on December 7, 2011 at 3:56 am

From an employment turning point standpoint, Wednesday is the last
day for a turn, there has been a Tuesday or Wed after turn, the last 5
months and 7 out of the last 8 months (only June was relentlessly
down)…. but prior to that the market tended to continue for a while in
the post employment direction….

From a strong rally off of the November lows, then the turning point
that is favoured is opex Tuesday or Wednesday and FOMC Tuesday – it is
interesting that they both coincide this month – just like last year….
In the end, it was just for a small turn….. I must admit one scenario
that is intriguing is that we do surge higher in the next few days with
‘Europe solved again’ and then further talk of a Fed action (discount
rate cut?) and we peak on Tuesday or Wednesday of next week above 1300….
it might just be the trade that messes the most people up as few are
truly positioned for the Santa rally and there are a lot of Bears out
there expecting a re-tracement.

The one strange point is that the midcaps are not showing their usual
exuberance…. normally, I would expect them to lead here and they are
lagging substantially

The odds certainly favour a stab at the short side, though I would do it in the RUT or the SPX and not the midcaps.

-D

uempel on December 7, 2011 at 8:36 am

Momentum chart SPX courtesy CS. Historgram is the daily, blue line weekly, small bumpy line is the hourly.

uempel on December 7, 2011 at 8:26 am

Check the 9 MA and the 13 MA on the monthly, resistance at 1270 and 1279:

Anonymous on December 6, 2011 at 9:07 pm

Nyse up and NYMO down. Thanks for the report Cobra. ON Dec 1st Bulkowski predicted on his blog that the market would go down the next two weeks to 1200. Whenever I believe him, he is usually wrong. When I don’t he is always right. Cobra, you have talked about this before, could you please tell me why that is because I have thought about it for a year and said the same thing about you and you have said it also. I can only guess this is the same for many other people. Thanks
- Cobra on December 6, 2011 at 9:38 pm
  
  That’s just a coincidence. Your memory tends to remember a few incidents so you feel this way.
  
  Consider me as a mechanical model, say, normally I have 90% winning rate, but if you don’t blindly follow (I don’t mean you should blindly follow me, it’s just an example), then there’s no way you have the same winning rate. Normally you end up with very bad winning rate.
  
  I noticed SPX up while NYMO down, just the up was too little otherwise it’s a solid top signal.
  - Seawaves on December 6, 2011 at 11:42 pm
    
    NYMO/SPX divergence looks very similar to that in 11/25 bottom but just opposite.
    - Anonymous on December 7, 2011 at 7:55 am
      
      +1
  - Anonymous on December 7, 2011 at 1:17 am
    
    Cobra, most likely the moneyflow must have been negative again today.
Anonymous on December 6, 2011 at 9:19 pm

thx, ding
Anonymous on December 6, 2011 at 9:39 pm

maybe this third time’s the charm and the top is really in this time??
Anonymous on December 6, 2011 at 9:53 pm

Thanks Cobra, further supporting the bearish case, QQQ and $BKX failed to come close to yesterday’s high, while SPY double topped.
d w on December 6, 2011 at 10:48 pm

Thanks Cobra!
Anonymous on December 6, 2011 at 11:04 pm

Hi, Cobra: DJX has made higher high today( Dec 6), do you count it?
- Cobra on December 6, 2011 at 11:05 pm
  
  No. It’s because of IBM. All they need to are to lift IBM.
Anonymous on December 6, 2011 at 11:38 pm

First time to leave a comment.

For SPY we have another reversal bar today, four in a row, any statistics on that?

Thanks Cobra.
- Cobra on December 7, 2011 at 12:00 am
  
  That’s a problem for bears actually, if 2 to 3 reversal like bars, that might mean reversal but if too many reversal like bars, it could mean consolidation therefore implying a continuation.
uempel on December 7, 2011 at 2:19 am

Everybody is so bearish here – note that the bullish percentages are still moving up: BPNYA up 1.14%, BPCOMPQ up 0.56%, BPOEX up 1.54% BPNDX flat, BPSPX up 0.66%, BPINDU is flat.

Here a close look at BPSPX:
- uempel on December 7, 2011 at 5:07 am
  
  Here a different view of BPSPX, conveys the same message as my first chart: resistance 61/62.5 is crucial.
denali92 on December 7, 2011 at 3:56 am

From an employment turning point standpoint, Wednesday is the last
day for a turn, there has been a Tuesday or Wed after turn, the last 5
months and 7 out of the last 8 months (only June was relentlessly
down)…. but prior to that the market tended to continue for a while in
the post employment direction….

From a strong rally off of the November lows, then the turning point
that is favoured is opex Tuesday or Wednesday and FOMC Tuesday – it is
interesting that they both coincide this month – just like last year….
In the end, it was just for a small turn….. I must admit one scenario
that is intriguing is that we do surge higher in the next few days with
‘Europe solved again’ and then further talk of a Fed action (discount
rate cut?) and we peak on Tuesday or Wednesday of next week above 1300….
it might just be the trade that messes the most people up as few are
truly positioned for the Santa rally and there are a lot of Bears out
there expecting a re-tracement.

The one strange point is that the midcaps are not showing their usual
exuberance…. normally, I would expect them to lead here and they are
lagging substantially

The odds certainly favour a stab at the short side, though I would do it in the RUT or the SPX and not the midcaps.

-D
- uempel on December 7, 2011 at 8:36 am
  
  Momentum chart SPX courtesy CS. Historgram is the daily, blue line weekly, small bumpy line is the hourly.
uempel on December 7, 2011 at 8:26 am

Check the 9 MA and the 13 MA on the monthly, resistance at 1270 and 1279:

12/06/2011 Market Outlook (Double Top or Ascending Triangle?)

Chinese Transcript

18 Comments

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