01/27/2012 Market Outlook (Weekly Doji)


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SHORT-TERM: PULLBACK MIGHT NOT OVER, BUT NO EVIDENCES YET THE TOP WAS IN

Three cents:

  1. Very short-term, in about several days time frame, the pullback might not be over yet. This doesn’t mean the top was in though because generally, bulls will at least try the 01/26 highs before a top pattern could possibly be confirmed.
  2. I see a little more than 50% chances, a week or two pullbacks (1 or 2 weekly red bars) ahead.
  3. I’ve changed the way to forecast the intermediate-term and long-term. Now they’re based on trading signals. Because per a few charts or statistics to blah blah the intermediate-term or long-term, is not practical, not only difficult to be right but also mostly difficult to find something to say, other than the trend is up or down (and repeat everyday), so I figured maybe to use the trading signals directly feels more “real”. Well, let’s try. This report has evolved a lot for the past 4 years, so it won’t just stop here. I’ll see if any better idea until everyone is happy.

The chart below explained why the pullback isn’t over and why chances are the top wasn’t in, at least not confirmed. The estimated rebound and pullback targets are also given.

EvilPlan

The statistics below, from the other angle, also supports the argument that there might be more pullbacks in the short-term.

ISEE

Then, why are chances a little above 50%, we’d see a week or two pullbacks?

The SPX weekly Doji itself means pullback or continue up 50 to 50 chances (so now bears have 50% chances at least). Considering the volume (small range bar such as Doji with volume surge, means distribution, while small range bar with decreased volume means consolidation, don’t confused with that) and the primary bear trend line, so my read is it’s a Doji bar with a little bearish bias.

SPXWeekly

In addition, there’re 2 reasons make me believe that weekly Doji has a little more bearish bias:

  • T2112 still is too high. A huge up the next week might fail eventually because nothing on this planet Earth are beyond the influences of gravity.

T2112

  • Just a reminder, don’t forget the OEX Open Interest Ratio.

OEXOpenInterestRatio

THE INTERMEDIATE-TERM TREND IS UP

THE LONG-TERM ACCORDING TO OUR SIMPLE STRATEGY IS LONG SINCE JANUARY

  • According to the January Barometer, 80%+ chances, 2012 will end in positive territory.

 

 

Chinese Translation

SHORT-TERM: PULLBACK MIGHT NOT OVER, BUT NO EVIDENCES YET THE TOP WAS IN

三点说明:

  1. 从几天的time frame看,可能还没有跌完。但这并不意味着the top was in,因为一般情况下,牛牛至少还会去测试01/26的high。
  2. 有略大于50%的机会,会有一周到两周的pullback (1 or 2 weekly red bars)。
  3. 我对中期和长期的预测作了改动,以具体的交易信号为准,因为单凭几张图或者几个统计,告诉你中期或者长期要到哪哪哪,既没有实用价值也不容易准且并不是总有东东可说,还不如来点实际的。

下面的图解释了为什么说还没有跌完以及为什么还不能说the top was in。

EvilPlan

下面的统计算是从第三方的角度证明短期还会有回调吧。

ISEE

那么,为什么说有略大于50%的机会,会有一周到两周的pullback?

SPX weekly Doji,有50%的机会意味着回调,也有50%的机会意味着continue up。考虑到volume(小棒棒但是volume surge,意味着distribution喔,小棒棒with decreased volume才是consolidation哈,不要搞混了)以及primary bear trend line的因素,所以我猜这个Doji bearish的成分比较大一些。

SPXWeekly

此外,我认为这个weekly Doji bearish成分比较大一点还有另外两个理由:

  • T2112还是太高。下周大涨特涨的话,多半还会掉下来,因为这个地球上所有的东东都无法克服重力的影响。

T2112

  • 别忘了OEX Open Interest Ratio。

OEXOpenInterestRatio

THE INTERMEDIATE-TERM TREND IS UP

THE LONG-TERM ACCORDING TO OUR SIMPLE STRATEGY IS LONG SINCE JANUARY

  • According to the January Barometer, 80%+ chances, 2012 will end in positive territory.
  • Money flow for Friday: Price down .01%  — Block trades down almost 2:1

    http://online.wsj.com/mdc/public/page/2_3022-mfsctrscan-moneyflow-20120127.html?mod=mdc_pastcalendar

    • Thanks, I saw huge money outflow Friday too.

  • Thanks Cobra!
    SPX 50/200 DMA golden cross is imminent.

    • Anonymous

      Yes, but 50/200 monthly cross also imminet to the downside. First time since 1929 . 

  • Anonymous

    Cobra: Just a random question, do you see 3 peaks and domed house pattern and how likely is it.  Please see chart attached.

    Also see link for past occurrences  of 3PDH patterns: http://jamesgoodeonthemoney.blogspot.com/2011/04/curse-of-domed-house.html

    • Thanks, but I don’t know. I assume anything is possible.

      • Anonymous

        I appreciate the fact that you didn’t answer that question.  It gives you much my credibility to simple say “I don’t know” then to pretend you can see into the future.

        wayne – there is a fortune teller that works down the street.  I can make an appointment for you if you like. 🙂

        • Anonymous

          I respect cobra for telling me that he does not know and the reason I asked Cobra is because I’d like to read his opinion about  chart patterns.  Since I do not have as much knowledge as he, I thought this site is for sharing knowledge and that is main reason why I am here.  

          By the way, I don’t even remember asking for your opinion, and do I even know you?  Why don’t you mind your f***king business and stop yapping like you are some computer geek bully.  Besides everyone here including Cobra are looking at chart patterns and making some sort of guesses or predictions of future price action.  So, it is insulting to everyone here and Cobra that you compared reading charts to fortune teller.  Grow up and think before you type, what a loser!

          • Anonymous

            My my wayne you need to relax and take a deep breath and think about why you are here.  Its not because you are learning anything it because you think Cobra will make you alot of money without thinking.  No offense but i’ve worked in a large brokerage and have seen what

            • Anonymous

              sorry dude again i dont give the fuck what you do or who you are. i am here same reason stated above, and I do my own homework, and that is why I posted what i posted. get the F off and mind your own Fking business. save advice for yourself

              Also, stop bragging of how much money you made, successful traders don’t brag here, what a baloney. If you are so successful why do you have to pay $10 bucks a month to be here. What an idiot.

              • Guys, easy. Let’s stop here. I don’t mind you all ask any questions. If I happen to know something, I’ll sure try my best to answer. Let’s don’t lose the cool, after all, we’re all friends here. Thanks. You all have a great night! 🙂

                • Anonymous

                  No worries Cobras.  Not trying to start fights.  I realize you do have people here that are sore and grasping at straws to make back losses.   I should be considerate of that.  I learn alot reading about the different trading styles or lack of trading styles of people. Have a great night.  

                  • Anonymous

                    “Not trying to start fights. ”

                    yes you were 😛

                    • Anonymous

                      Okay maybe i was! :S  But seriously my original message is that no one can look into the future.  The fortune teller comment was meant to be a joke..but i guess it was taken otherwise.  I guess my opinion is that trade what you see not what you think is going to happen.  Sound simple but took me a long time to figure it out.  I guess people aren’t really interested in trading principals they just want to hear “buy here or sell here”.  I’m sure even if everyone knew for a fact the market was going to tank all of next week that they would still screw up the trade! Trading is much more than reading a chart. 

            • Guys, easy. Let’s stop here. I don’t mind you all ask any questions. If I happen to know something, I’ll sure try my best to answer. Let’s don’t lose the cool, after all, we’re all friends here. Thanks. You all have a great night! 🙂

          • Anonymous

            My my wayne you need to relax and take a deep breath and think about why you are here.  Its not because you are learning anything it because you think Cobra will make you alot of money without thinking.  No offense but i’ve worked in a large brokerage and have seen what

        • Anonymous

          I respect cobra for telling me that he does not know and the reason I asked Cobra is because I’d like to read his opinion about  chart patterns.  Since I do not have as much knowledge as he, I thought this site is for sharing knowledge and that is main reason why I am here.  

          By the way, I don’t even remember asking for your opinion, and do I even know you?  Why don’t you mind your f***king business and stop yapping like you are some computer geek bully.  Besides everyone here including Cobra are looking at chart patterns and making some sort of guesses or predictions of future price action.  So, it is insulting to everyone here and Cobra that you compared reading charts to fortune teller.  Grow up and think before you type, what a loser!

    • Anonymous

      Arent you really asking.  “Cobra can you see into the future and tell me if this pattern is going to play out?”.  How and why would he know.

      • Anonymous

        Just a question dude. isnt this site about sharing thoughts and views. Stop being a smart ass

  • Anonymous

    SPX 3PDH

  • Anonymous

    thx,ding

  • Anonymous

    sorry for a little off topic…but for a question “why we are where we are” is definitely an answer that because we are wasting tons of money and very rare resources on this: http://www.youtube.com/watch?feature=player_embedded&v=OS-PmhhxPG4http://www.youtube.com/watch?v=becLI2A2BLg&feature=related

    Just in case, is during wartime better investing in commodities such as gold,oil or in military stocks? Thanks in advance and I hope it will be worthless 😉

  • Anonymous

    Cobra,  I’m very new, and you are always very kind to reply my questions.  For below–on 1/27/2012 Friday–why Dow is dropped, and Nas was still gained?  All these three numbers are supposed at the same trends or NOT?  Or is this a another indication for the market?   
    Huge thanks!!
    The Dow Jones industrial average (INDU) dropped 74 points, or 0.6%, the S&P 500 (SPX) slipped 2 points, or 0.2%. The Nasdaq (COMP) managed to gain ground, adding 11 points, or 0.4%.

    • It’s OK 3 indexes behaved different for a few days. Especially INDU, because INDU is not a real index, it’s price weighted, the most expensive stocks weights the most, so it only takes just one expensive stock to tank to make INDU red.

      • Anonymous

        OH, Understood now–thanks!!

  • KL

    I can’t see why anyone wants to be bearish here. Bernanke put a floor and the risk trade is on. 

    • uempel

      Hey KL, sure, bulls do have arguments, but bears have some arguments too: GDP suggests a build up of inventories and not of sales, company earnings/sales are only slightly higher than predicted, guidance is dipping, sovereign debt will strangle economic expansion for years. Last but not least: Japanese rates have been close to zero for more than 20 years and this has not been supporitive for the Nikkei…

      • KL

        Uempl,
        I don’t doubt that, but the market has shrugged off the bad news. I think we do head down eventually (and really hard), I just don’t see it just yet. 

        • Anonymous

          UEMPEL and KL, There is a note in Chinese DQ saying tomorrow’s opening (1/30/2012 Monday): 
          Everything will be green. DOW +50, NAS +10, SP +1.5.If the Greek deal comes before the opening, the above should be doubled.The adjustment was done on Friday. Don’t you realize it?However, right now pre-market all are in RED 🙂

  • uempel

    Next week will be interesting. SPX shows resistance at 1320 on the weekly, BPSPX at 80.80. If SPX opens up above 1320 Monday and manages to cruise higher bearish bets are off. But if SPX opens lower…

    • Nice chart. What I read from you is we should have pullbacks here.

  • Hi Cobra, I am just looking back these wekly doji formation after a several week long bull trend and for me it seems like there is higher chance for a final blow up before meaningful reversal.

    • uempel

      Let’s see where SPX opens up Monday, It’s going to be an interesting week.

      • Agree, it’ll be interesting. My expectation is a little weakness at the beginning and a blow up in the end. May be a kind of retest of previous 52 weeks high.

    • Thanks. That sounds what usually market would do, so I’m prepared.

    • PUG

      Gabor:  That is very good weekly candle study.  Thanks for sharing.

  • uempel

    18:10 p.m. Sunday and the ES is at 1313.50 – this translates into SPX 
    1316/18. 

    • uempel

      05:00 a.m. Monday morning the ES is at 1303.

  • uempel

    Momentum is weakening according to Credit Suisse’ system:

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