12/08/2011 Market Outlook (Lower Low Ahead)


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SHORT-TERM: LOWER LOW AHEAD

Today, the market finally pulled back as I’ve been blah blah recently. And as mentioned in the previous reports, whether such a pullback is merely a dent in a strong uptrend or would revisit the Nov 25 lows, we’ll have to wait and see. The evil plan below shows what I’m relatively sure now, based on the evidences so far collected today:

  1. Most likely we’ll see a lower low tomorrow.
  2. After the lower low, we might see a huge rebound. I’m not sure if the rebound starts at tomorrow though.
  3. Such a rebound would fail eventually, so today or tomorrow’s low, whichever is lower, will be revisited.

So accordingly, trading wise, the rebound, if indeed, might be a good sell opportunity.

SPYEvilPlan

The chart below is the major reason I made the evil plan above. SPY had 7 consecutive hourly red bars, which from the chart below we can see, mostly would go as what I mentioned above thereafter, with only 1 exception, where there’s no rebound at all. Here, I want to take the opportunity to say thanks again to all of you who have donated (aka membership fee), because of your bailout money, I finally got the president’s (you know whom) permission to upgrade the software. Believe me, you won’t see the chart below if without the upgrade. Also, because of your bailout money, we just leased a new server to run this web site, which is hundred times more powerful than our old server. All because of your supports, which I cannot say enough how grateful I am. In the future, with your monthly stimulus package, I’m sure I could do better and better, and I swear I won’t use your bailout money to buy private jet or offer myself a big year end bonus, I swear.

SPY60min

The charts below are the other evidences about lower low ahead. I believe most of you are already familiar with the theory behind – a strong down momentum cannot be reversed in just a day, so I won’t bother to blah blah again.

TRIN
LLGuaranteed

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

 

 

Chinese Transcript

SHORT-TERM: LOWER LOW AHEAD

今天大盘终于如预期的一样回调了,前面的报告说了,这个回调只是个小dip还是去测试11月25的lows,目前还无法确定,所以只能等等看了。下面的图是目前比较能确定的走法:

  1. 多半明天会有lower low先。
  2. 然后多半会有大反弹,当然不确定是否是明天。
  3. 大反弹完以后还会掉下来测试今天或者明天的low,whichever is lower。

所以操作上,这个大反弹多半是sell的机会。

SPYEvilPlan

下面的图是做出以上猜测的主要理由,SPY 7 consecutive hourly red bars,从图上看,绝大多数此后都是我上面提到的走法,只有一例是没有像样的反弹,直接跌下去了。这里,再次感谢大家,由于大家的捐款(membership fee),我得到我领导的许可,可以升级软件,你们看到的这幅图是软件升级后才能有的,此外我们前不久刚刚换了新的,非常强大的服务器,这些都要感谢大家的捐款。在大家的stimulus package的支持下,我相信我将做的更好,也保证不会用大家的bailout money来买private jet或给自己发big bonus。

SPY60min

下面的两个图是说还会有lower low,主要原理大家应该已经很熟悉了,这么大的下跌动能是不会一天就结束的,这里就不多说了。

TRIN
LLGuaranteed

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

    Thanks Cobra!

  • Anonymous

     Hi Cobra,

    Just helped you to buy your private Jet.

    Congratulations

    AJVS

    • Thanks. Appreciate the support!

  • Anonymous

    I know it is subjective, I just feel the drop today was kind of reluctantly done in a gentle way…Basically I felt no panic in such a “major distribution day “. Any indicator showing the retailer investors still crazily buying?

    • No, retailers are neutral.

  • Thanks Cobra for your everyday hard working! I like your charts:))

  • Bhaskar Bhowmick

    Very interesting. Such detail analysis makes it worthwhile to visit your site.
    In fact what Umpel said inter-day, that tomorrow is a trend reversal, goes very well with your observation.
    Great job.
    Thanks, 

  • Just signed up.  I try to check your most excellent analysis every night.

    • Thanks, appreciate! 

  • Anonymous

    Cobra DA: This is amazing, how do you figure out this “SPY 7 consecutive hourly red bars, we might see a huge rebound”  and this rebound almost erase the down fall in 2 days. Is it from the experience?

    • Didn’t the chart shows the past pattern? Only one exception so far this year.

  • Anonymous

    Do you have explanation on why Cobra Impulse and Non-Stop in buying mode?

    • so this basically means the intermediate-term is up, the pullback is temporary in nature.

  • uempel

    Me_XMan and oldpigwang, I posted this chart yesterday and I’m posting it again: it shows exactly the same signal as Cobra’s systems and his “7 consecutive hourly red bars”.

    Note too that short and medium term momentum are both pointing higher (not showing the chart here)I presume that you guys don’t bank 100% on Cobra’s input. Why not show us and explain why you are short term bearish…

  • uempel

    Close look at BPSPX: red ellipse indicates top might be in, but green and blue ellipses favor a bit more upside, so does Fib which work quite well with BPSPX: target 62.83.
    There is a further signal which negates a decline right now: the first dotted black vertical suggests a reversal next week (could be either up or down), the second dotted black points to a reversal at the turn of the year.
    This kind of information might be confusing, but if applied closely-knitted in with a sound trading strategy it helps – it sure helps me.

  • uempel

    Checking resistance levels for Friday:

    (Don’t know why Disqus keeps on showing other charts together with the one I want to show – Cobra, do you know how I can avert this?)

  • uempel

    ES December minis: in the very early Friday morning they went down to 1226, later on they slowly climbed back up to 1250, now Friday at 9 am they are at 1240. 

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