SHORT-TERM: A LITTLE BEARISH BIASED
Nothing new today.
- The bigger picture, I believe there’re some chances this is the last push up to test the Oct 27 highs before an intermediate-term reversal. Such a test doesn’t have to be a higher high, can fail at any time. Even it does break above the Oct 27 highs, chances are bulls wouldn’t go too far because Rydex Traders (retailers) are way too bullish, plus the red Non Farm Payroll day has already implied a coming reversal.
- Short-term, just a little little bearish biased, but basically I’m not sure. The chart below shows what I’d watch the next Monday. Looks like a typical Bearish Rising Wedge breakdown then back test the broken trend line, so a little bearish biased, especially if breakdown below the green line below, then it’s a confirmed 1-2-3 Trend Change.
Pay attention to the red arrows below, odds are really high that a red Non Farm Payroll day means a reversal.
The chart below should clearly show that Rydex traders (retailers) are way too bullish.
INTERMEDIATE-TERM: WE COULD SEE MULTIPLE WEEKS RALLY, WILL NEED REASSESS SPX 1,000 DOWNSIDE TARGET
For why we could see multiple weeks rally, please see 10/14 Market Outlook for details.
For why SPX downside target at 1,000, please see 08/19 Market Outlook and 09/30 Market Outlook for details. I’m not sure about this call anymore, will need more evidences to reassess.
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Chinese Transcript
SHORT-TERM: A LITTLE BEARISH BIASED
没有新内容。
- 大方向，我认为有一定的机会，大盘是在做中期反转向下前的最后测试Oct 27 highs的动作，这个测试是不一定要high过Oct 27 highs的，随时可能夭折。既使Oct 27 highs破了，牛牛也走不远，理由是Rydex Traders (retailers)太牛了，加上Red Non Farm Payroll day可能意味着反转。
- 短期，虽然有点点bearish biased，但基本上我不确定。下面的图是下周一的看点。看着像是典型的Bearish Rising Wedge breakdown then back test the broken trend line的动作，因此有点bearish bias，特别是如果下破绿线的话，就是confirmed 1-2-3 Trend Change了。
注意看下面图的红箭头，Red Non Farm Payroll day是反转日的几率非常高。
下面是最新的Rydex Fund Assest Flow chart，可以看到牛气丝毫未减。
INTERMEDIATE-TERM: WE COULD SEE MULTIPLE WEEKS RALLY, WILL NEED REASSESS SPX 1,000 DOWNSIDE TARGET
For why we could see multiple weeks rally, please see 10/14 Market Outlook for details.
For why SPX downside target at 1,000, please see 08/19 Market Outlook and 09/30 Market Outlook for details. I’m not sure about this call anymore, will need more evidences to reassess.
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ASTRO Special november 7 2011…
http://astrofibo.blogspot.com/2011/11/astro-special-november-7-2011.html
thx,ding
VIX 30% rise emerging from overbought conditions (few days ago) also forecasts more downside in November.
cobra this report makes total sense and coincides with the news that seem to be the markets next best friend. the news have a cold , and the market sneezes !!!
News? I heard the news is good, everyone prepares for a gap up Monday.
the news in Greece is neg imho
what’s the news?
the news overall coming from Greece- the political parties are not agreeing in anything. And after Greece, Italy is the new country with debt talks.
Thanks. The longer they argue the worse it would be. We have 2 perfect examples already:
700B buy bad debt plan in 2008, congress had lots of argues and failed the first vote. you know what happened later.
US debt ceiling talk. The deal was reached in the last minute and of course you still remember what happened thereafter.
So from my experiences, anything, if it takes too long to solve, it’d be very bad, no matter whether eventually the solution is offered or not.
Weekend Update guys!
http://heavenskrowinvestments.blogspot.com/2011/11/devils-way.html
Heaven, you give the best advice at the very end of your report:
Sure I could place a bet on which way we
go…but I want the lowest risk/highest reward trade…and for that, I am
patiently waiting for the smart money to decide the direction from here.
BPNYA illustrates Heaven’s advice:
hey umped I bought the books you told me . I am waiting for them. in the mean time can you explain your post above ? the BPNYA ? what are you seeing in the chart ? thanks
hey Graciela, it’s Sunday afternoon and I’ll keep it short – well, kind of short:
Did you skip your physics class at school,
or did you learn Newton’s 3rd law? Newton’s law claims that each action
(actio) is followed by a reaction (reactio).
If we use this theory in TA we see
how a price channel comes into being – prices go above and below a centerline –
up and down, up and down and they form a channel. Then suddenly there is a
breakout and a new channel becomes apparent. These channels are built in all
time frames – by the minute, hour, day, week and month.
The trader is always focusing on the
boundary of the channel – will the price bounce back into the channel or will
there we a breakout?
Breakouts are the juice of the market. Some
traders only trade breakouts. But breakouts can fail, like all other signals.
So traders tend to wait for the breakout to be confirmed by a good-bye kiss…
What is a good-bye kiss? Price breaks out of channel and then comes back to
touch the channel and rebounds immediately.
Ok, enter W. D. Gann. Gann noticed that channels
tend to cluster and that they are revisited in future price action. So Gann
thought out a grid that helped him (and helps traders 90 years later) to see
breakouts continuously. In these grids price stays in a rhomboid and when it
finally comes to the boundaries it gives a signal: it tells us in which new
rhomboid it’s going to spend some time. The BPNYA chart shows this kind of
action quite nicely.
Why BPNYA? it’s the bullish percentage of
all NYSE stocks, so it gives a good picture of the behaviour of all NYSE
stocks, shows us where the market might be heading.
Friday at the close BPNYA is at the high
boundary of a rhomboid. It indicates that something might happen next week –
either a break out into a next rhomboid which starts at 67 – or a breakdown to
60.
PS: Gann’s grids always had the same angle
– as far as I remember he used 30 degrees. He also split his rhomboids in half
with a horizontal line. Strictly speaking the chart here isn’t Gann, it is
continuous development of Gann’s ideas..
uempel thank you so much .I will print . re view and get back to it. thank you again
Hi Graciela,
Enjoy your and Unempel’s conversation. What is the name of the book by W. D. Gann? I would like to check it out too.
No specific book, you’d have to find something in an antiquarian bookstore, or in old TA magazines, perhaps you’ll find something on the web. I learnt everything I know about Gann from an afficionado who sent me bits and pieces many years ago. It might still be in my computer, but I’m not sure if it was rescued when apple discontinued 9 and I don’t feel like searching. You’ll find some very basic Gann information in Murphy’s TA of the Financial Markets. But be aware that when you search the web: lots of things are sold as “Gann” and Gann himself would be surprised to see what is attributed to him…
Something else: why don’t you experiment with grids yourself – you’ll discover all kinds of interesting patterns.
Here a Monday intraday chart which is very close to Gann (genuine Gann would draw the rhomboids with identical angles left and right and a horizontal line through the middle (not a slightly slanted one as chart shows).
Agree.
Cobra: weekly change for spy: -1.82%. According to statistics on your 10/28 Market outlook report (The statistics from Bespoke), the month after indexes move above 200 DMA, has % positive: 52.9%, which is slightly bullish bias based on last 17 times over 20 yrs.
However, of 12 times that averages turn negative wk after crossing above 200 dma, the month after is NEGATIVE 7/12 =58.3%, slightly bearish biased. Even though, I am slightly bearish for this month, the rally from 1074-1292 is an impulsive one and may be a trend change in next few months. btw: next 3 months: 82.4% positive, CAN’T argue that. So, Dec-Jan definitively bull months and align with Santa Clause rally!
what is your take, Cobra? I understand sample size isn’t large enough to draw any meaningful statistical probability, but it is what it is 🙂
I won’t worry about things in 3 month now. We’ll have Santa Rally, so that 3 month bullish might be true.
That Rydex data is truly worrisome for the bulls. In fact, I’d say it’s the only thing that’s got me worried. The only thing! I’m purposefully exaggerating to make my point, but when looking at all the major TA and sentiment indicators, I can’t find anything to support that Rydex data. The CPC is still reflecting more bearish sentiment than bullish. Mutual fund outflows reflect the same. Short interest is high. VIX is high. VXO is high. The options skew is still overwhelmingly bearish.
?
Here’s my latest finished product (of a couple of draft versions recently posted here). I’m calling it my intermediate term possible projections on the SPX based exclusively on Technical Analysis.
Remember that speculation in equity markets is a probability game, and that ANYTHING can happen.
http://img100.imageshack.us/img100/1260/spx041111pub.jpg
Thanks, awesome chart as always. I bet it took you lots of time to draw.
Not as much as one might think – just a few lines and boxes. 😉
What takes the most time is the analysis and the wording (as in what you’re going to say in as little space as possible, and hopefully somewhat correct in as much as correct as you can get in this business) as I’m sure you’re more than aware of.
Updating is a synch if you’re working with a program like Fireworks – you just cut and paste the previous draw onto the updated chart. :-))
Here’s a good example. Updated with a quick copy and paste. No need to change anything on this one. 😉
http://www.cobrasmarketview.com/2011/10212011-trading-signals/#comment-341300111
Really kind of like the above, just a little different focus.
Add: The cycle analysis on this chart is VERY important to keep in mind, and it coincides with bullish seasonality. Too many things pointing higher. So much so that the only thing I really would be willing to say for certain is that if 1180 SPX is taken out inside of 2 weeks, it would be time to batten down the hatches. (IMHO)
I see, thanks.
Cobra,
In the Summary of Signals above, the Impulse System is listed as a Buy. My understanding is that it’s in cash. I’m sure that you will clear things up.
It’s in buy mode means:
1.) The trend is up, so it’ll try to buy the next dip or breakout.
2.) Since it’s just a general direction guide, so if it’s in buy mode, that means you can decide to buy dip yourself instead of wait for it to buy and the most importantly, don’t short.
Thanks, Cobra. I didn’t know that. I appreciate the tutorial.
it’s already explained here: http://www.cobrasmarketview.com/cobra-impulse-system/
I also created a FQA item. Will publish later once I’ve accumulated enough Q&As
Cobra are you expecting this monster gap up on Monday like everybody else? I am currently neutral on my positions. I suppose it is Heavenskrow approach.
Yeah, everyone expects a monster gap up now including me. We’re all trained to expect huge gap up by default. 🙂
Based on your signals do you buy the gap?
No. Statistically, we should have a down Monday. Let’s see.
Cobra as always thanks for your input. You are terrific at what you do. By the way, I found this site that also uses statistical approaches. Not as great as you, but supports the same concepts generally.
http://www.tradingtheodds.com/
Thanks.
Yes, I know Frank, his site is great. If he could make his summary simpler, that’d be much better. 🙂
Nobody beats your summary. I look forward to reading it each day. Thanks for your dedication.
I guess I don’t see it changing your short term bearish view.
Hey Cobra – why do you expect a monster gap up, Greece has not resolved their government issues…the meeting is in progress, Israel may attack Iran, Italy government vote on Tuesday, many uncertainties at this point so not seeing anything that would indicate gap up, CME news should be non-event as well…doesn’t prompt higher margin or necessarily encourage new leveraged positions
I just mean by default we all expect a huge gap up the next day as we’ve been trained in the past 2 years. 🙂
Also we’ve seen so many times that the market rises huge on very bad news, so really hard to say, maybe all those news means really really good thing? LOL
I have to say I quite agree with you Brian….I see nothing but large enormous overhanging negatives short term and many unresolved Euro issues…We’re awaiting news everyday about what color undershorts the new coalition government will be, about which toupee Berlusconi will show up in. This is getting ridiculous if the market depends on this level of minutiae….we’re never going to see our way out of this if we’re depending on this level of information…
Dear Cobra:
I love you.
Yours sincerely,
Al
Are you blonde with long legs? 🙂
LOL…LOL… to you too 🙂
Now just for some kind of confirming information, I’d like to bring the EUO (ultashort Euro) and UUP (long Dollar) on a Daily chart. The Euro looks horrendous and the Dollar is looking like the place where $ is going. Commodities will reverse and I very much believe the risk trade is doomed for the short term…
Nice article I just posted over on Daneric’s blog that might be of interest to some of the newer kids on the block here as well.
http://danericselliottwaves.blogspot.com/2011/11/elliott-wave-update-4-november-2011.html#comment-357117013
Thanks Cobra.
Waiting for a gap-up 🙂
thinking chances for a pullback to 1220 at minimum is increasing especially if we open weaker.
click on name for monday roadmap/chart.