| Trend | Momentum | Comments - Sample for using the trend table. Warning: This is NOT a trading recommendation! | |
| Long-term | Down | Idea for trading intermediate-term under primary down trend. | |
| Intermediate | Up | Overbought | Hold long. |
| Short-term | Down* |
| Report Focused On | Buyable dip or the market topped? |
| Today’s Summary | CPCE is in danger of signaling an intermediate-term top if further rise tomorrow. 2 days left for bears to prove themselves. From now on the game may become "buy dip and sell bounce". |
2.8.0 CBOE Options Equity Put/Call Ratio. Double confirming line is at risk of being broken out should it rise further, which means an intermediate-term top. This signal, so far, has never disappointed me.
7.1.0 Use n vs n Rule to Identify a Trend Change. If SPX goes below 780 within two days, the uptrend will be changed, otherwise it may be a buyable dip. Why? 4 vs 4, the one wins dominates the prevailing trend. You may refer to 8.0.3 Use n vs n Rule to Identify a Trend Change 2008 for further information. What about if the market rises? If the MACD at the bottom of 1.0.3 S&P 500 SPDRs (SPY 30 min) gives a buy signal, one could possibly try to buy dip because the intermediate-term trend is still up according to the trend table, and the buy signal of the short-term MACD would be more reliable.
Institutions Buying and Selling from www.stocktiming.com. Note that when the blue curve starts to seesaw, NYA index will do the same instead of no-pullback-rally like what happened in the previous several weeks. Of course, it is not wise to short the market at all expense before the red curve denotes the distribution rises beyond the blue curve denotes the accumulation. This means that the game we could play, in the following days, would be to buy dip and sell bounce.
1.1.4 Nasdaq 100 Index Intermediate-term Trading Signals. STO and ChiOsc are still overbought and pullback is still needed in the short term.
1.0.4 S&P 500 SPDRs (SPY 15 min). The pattern could be a bullish falling wedge, and I don’t rule out the possibility of bounce back up tomorrow.
3.4.2 United States Oil Fund, LP (USO 30 min). This looks like a bullish falling wedge too, which is good for the broad market.
By the way, today both SPX and VIX dropped down. Please read my article When both SPX and VIX drops to understand that it’s actually relatively bullish.
Hi Cobra,
ReplyDeleteWhen you say short-term top, does that mean the market has to go down by a certain % minimum or the top implies some sort of time-frame ?
What do you make of the number of people, (even some famous bears)talking about this rally possible extending to 1000 ?
Thanks, as usual, for the great analysis.
Bears have 2 days to break 780?
ReplyDeleteCan you give more time like 4-5 days?
ReplyDeleteI think as long as it's breaking 780 then the trend still down and it doesn't matter how long it takes. Looking like SPX 740 is coming soon.
We should test 770 then a bounce back to 805 for Thursday as market always strong day before holiday. Next week, we go down to test 726 on the SPX. Look for GM Bankruptcy over the weekend! Get long FAZ/SDS/DXD on Thursday's rally by the close!
ReplyDeleteWhy are you guys so bearish to the market? Look at the sector glance chart on 5.0.1 S&P Sector SPDRs, there is no sector which has made a lower low so far. So the trend is still up, no?
ReplyDeleteHi Bob, Cobra says "short-term" top not "major" top, I assume he means "time frame".
ReplyDeleteBear market rally you know it. Economy recovery like 12 months from now or even longer. BTW, take a look at P/E for SP500 and you know where it's going.
ReplyDeleteHi XMan, I know, and I am heavily shorting this dead cat rebounce too. However this dead cat seems living pretty well now, which makes me frustrated a bit.
ReplyDeleteI eased in with my shorts with SDS when SPX around 830-840 and sitting good so far.
ReplyDeleteHi Cobra,
ReplyDeleteI have a question about the n vs n rule. Looking at the S&P500 weekly chart, I see that 4 weeks down went farther vs the 4 weeks up. The current weekly chart is already in red, although it may be too soon to say. What is your take on the n vs n rule on the weekly chart? Thanks.
Aleatoric, I never have verified my n vs n rule on weekly chart, so I don't know.
ReplyDeleteXMan, why 2 days? It's based on my observation and hence the n vs n rule. Yes, lower low should be more important than n days, but combine with the time factor, you will have better gauge of the market strength. Check, chart 8.0.3, see for yourself.
Thanks Cobra nice work as always.
ReplyDeleteAre we going to have to wait until Sunday for the next report?
ReplyDeleteI'm in withdrawal already! I need Cobra's updated market view NOW!!! :)