Trading range breakout on increased volume, bullish, today. Under NORMAL conditions, market should pullback tomorrow. If however no pullback or just a minor pullback tomorrow, pay attention to the trading setup described in chart 2.8.2 SPX:CPCE, as eventually there'll be a big sell off.
7.0.3 NYSE Composite Index Breadth Watch, again this is how I interpret today's "Equal up and down strength" rule. Why is today bullish? 4 vs 4, bulls won. Now we need to see how the market pullbacks. If no lower low, then very good chances that the trend has changed from intermediate-term down to intermediate-term up.
0.0.2 SPY Short-term Trading Signals, trading range breakout and stand above MA50 again, very good. Although the RSI and STO are overbought, but since this is a pattern breakout, in which short-term overbought signals usually do not work, so I'm still watching the chart 2.8.2 SPX:CPCE which trading setup I mentioned in yesterday's report, as I suspect (or more precisely I wish) that the market will keep going crazily up.
1.0.3 S&P 500 SPDRs (SPY 30 min), possible Complex Head and Shoulders Bottom pattern, target around $90. Overbought though, might pullback at least tomorrow morning.
2.0.0 Volatility Index (Daily), VIX oversold, should bounce back which means a pullback in the overall market.
So, to summarize again, bulls need to take profits while bears best hopes are that the market keeps going crazily up until NYADV in chart 2.8.2 SPX:CPCE gets overbought!
"...as eventually there'll be a big sell off."
ReplyDeleteEventually we'll all
be "eventually"...unless you're a legend in your own mind... like i am.
Regards,
dave
"...but since this is a pattern breakout, in which short-term overbought signals usually do not work..."
ReplyDeleteOMG, you must have finally read my very first post months ago. :) "Overbought" is music to my ears when we're going up strongly; "oversold" is a lullaby when the mkt is plummeting.
Regards,
dave
Glad to see dave finally showed up to share his brilliance with us.
ReplyDeleteHey dave,
ReplyDeleteWhen are you going to set up a website of your own so we can drink at your fountain of wisdom?
:P
Cobra,
ReplyDeleteDo you have any thoughts on XLF?
Outstanding analysis. I just found your blog and have already learned a great deal from you.
ReplyDeleteQuick question, what is the telechart equivalent to NYADV? T2100?
I'm just not seeing how to determine where T2100 is overbought/oversold.
Thanks for any help you can provide here. I'll definitely be a faithful reader from now on and look forward to linking to your blog.
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ReplyDeleteCobra,
ReplyDeleteI am having some trouble understanding the significance of the index/put call ratio. If you get a chance would you write a couple paragraphs detailing how it operates and why you like it? Thanks. Seems to me that the denominator can have a strong effect without the numerator moving
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ReplyDeletedave: Most of us understand that your posts are typically tongue-in-cheek, and it keeps things light-hearted around here. Please keep it up. All joking aside, I wish you had a site so that I could learn more about your analysis, but I understand if you are too busy.
ReplyDeleteSRS: Thanks for promoting Cobra's blog on your website.
2cents: Why did you stop posting to your blog last summer?
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ReplyDeleteOK, guys stop here, show time now. I want everybody be happy. It's just a virtual world, so don't take it too seriously.
ReplyDeleteI'll find time to answer some questions.
It's $NYEA in telechart. T2100 is not equal to NYADV. Anyway, I've found that breadth index in Telechart is quite different from those of stockcharts. And all my observations are based on stockcharts, so not sure if they work for telechart or not.
About put call ratio, there're plenty of articles here: http://www.investopedia.com/search/searchresults.aspx?q=put+call+ratio
ReplyDeleteCobra,
ReplyDeleteWith regard to the beginning of today's blog entry, what percentage loss in the broad indices do you define to be a "minor pullback?"
Today's pullback (if no wonder happns from now till the end) is definitely not a minor pullback. Usually less than 1% is considered a minor.
ReplyDeleteSo, if I understood you correctly, a solid pullback today would actually be bullish. Is that an accurate interpretation of your blog comments?
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ReplyDeleteOk, now 2c is teasing dave...
ReplyDeletehey 2c, why did you stop posting to your blog last summer?
ReplyDeleteno bullish, too big the pullback.
ReplyDelete2c and Dave, please, I beg you, stop teasing each other. I'm not easy here to spend 3 hours a day on the daily report every night with wife and daughter far away from me. So please try your best not to get me extra busy.
ReplyDeleteI must be misunderstanding something, because I was under the impression that no pullback or a small pullback would be bearish. That seemed to imply (because it was notably excluded) that a larger pullback would be bullish.
ReplyDeletePardon my ignorance. When you have a minute, would you clear this up for me?
You didn't misunderstand me. It's me not make it clear. Too large pullback is bad.
ReplyDeleteCheck chart 7.0.3 in my chart book, today totally ate up all the yesterday's gains, according to equal strength rule, it's bearish. This is too much. Now the low readings CPC becomes problem (this, I think, I've made it very clear, low CPC eventually will be a problem), how low can it go? So if CPC keeps going up from here, the market will be in trouble.
I haven't checked my chart book yet, I'll check it tonight, maybe I can find something to change my view.
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ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteOK, I have to remove some comments. So please stop here. It's really really not easy for me to spend min 3 hours a day to write the report. So please make things a little bit easy for me.
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteSorry, Cobra. We were just keeping things light-hearted. I apologize if we caused you distress. That certainly was not intentional.
ReplyDeleteOh, it's OK, I know some of you were just teasing.
ReplyDeleteThanks. :-)