| 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 | Beware of $NYA50R which usually means a top |
| Short-term | Up | Neutral* |
| Report Focused On | Buyable dip or the market topped? |
| Today’s Summary | Bears must make a lower low within 2 days to prove themselves. 63% chances the market may close in green tomorrow. Firework trading setup was triggered today, but I’m not sure if there’ll be any firework this time. |
Today the signals are mixed, and the intermediate term gives no clue, over the short term the market might possibly close in green tomorrow.
7.1.0 Use n vs n Rule to Identify a Trend Change. One day does not make a trend, so bears don’t be happy for now. Cheers after getting a lower low within two days.
7.0.4 Extreme CPC Readings Watch. CPC is above 0.7 and below 0.8, 63% chances the market may close in green tomorrow. Meanwhile 7.3.2 Firework Trading Setup is triggered. So far, this setup has been played out pretty well but I have no idea if it works this time because the market is overbought in the intermediate term, and it’s hard to imagine the market could still soar up massively.
0.0.3 SPX Intermediate-term Trading Signals, 1.1.4 Nasdaq 100 Index Intermediate-term Trading Signals, you can see that the overbought market conditions have not gotten improved.
1.0.4 S&P 500 SPDRs (SPY 15 min). The pattern looks like a bullish falling wedge, however this does not mean the market would bounce back up immediately. I guess the market may drop further down to touch the green moving average and then get very oversold in the very short term, afterward the probability of rebounce would be big.
1.3.7 Russell 3000 Dominant Price-Volume Relationships. 1451 stocks price down volume up which is quite bearish and hints that the down trend may have started, which of course does not mean the market would close in red tomorrow and is not a contradiction to the short-term analysis that the market has 63% of chance to close in green tomorrow.
Today SPX dropped down more than 1% and VIX declined as well. According to my statistics in When both SPX and VIX drops the results is quite bullish in a time frame of one week to one month.
＂Expect a pullback tomorrow. ＂Great call!
ReplyDeleteHi Cobra,
ReplyDeleteIs there any analysis that indicates the rally might have been over yesterday (around 861)? Just based on sentiment, it certainly does not give me the impression that it is over quite yet. What is the likely target for the short-term pullback according to you ?
Thanks.
Not sure if intermediate-term rally is over, not until a couple of "n vs n" to prove that the trend is indeed weakened, usually.
ReplyDeleteAs for short-term target, the first target, I think I've mentioned in today's report on chart 1.0.4.
Oh, don't trust those targets.
I have SPX 740 as target for next couple months.
ReplyDeleteIBD called yesterday a distribution day, but didn't see that correlation in your charts. Was the volume not enough?
ReplyDeletethanks for your hard work.
I mentioned price down volume up but I don't actually consider such kind of distribution day important.
ReplyDeleteIBD has a follow-through rule to find a bottom, by the way, which if backtest that rule, you'll find it has no edge.
Hi Me XMan, it's great to have long-term targets in your personal life, but not in the stockmarket: markets can stay irrational longer than you can stay solvent (Keynes). Best way to make money in the stockmarket is to review your well-founded short- and medium term targets every single day - and not to have any preconceived ideas about the long term outlook. Cobra's analysis is a great source for unbiased information.
ReplyDelete"the market may close in green tomorrow. " Another great call. Made me money!
ReplyDeleteHey I know that you and many others have mentioned that the declining volume was one of the reasons not to be to optimistic of the short term bull run on the weekly charts. But you do realize that last week was only a 4 day week right? The volume lost during that potential last day could have filled the gap of the declining volume indicator. So my question is other then the downtrending top channel line, where would you place the next resistance given a break out tomorrow?
ReplyDeleteI didn't count the last week's volume. Bear market rally always has no volume, I know for sure. My point actually was after 5 weeks up in a row, how high the chances will be for the 6th up week? Ok, we may get 6 up weeks in a row then the question will become how high the chances for the 7th up week? And so on... Until one day, I'm finally correct then I'll say, told you so! LOL
ReplyDeleteSPX @ 875 is the resistance. 943 the next, if breakout.
Point well taken. I agree that the market has been really getting ahead of itself. But I don't think that you should base it on how many up weeks we've had already.
ReplyDeleteFor the current bull market, yeah it's very exaggerated. But say for example we would have 10 up weeks with only a 10 point gain on the dow. Would you still hold the same opinion on that?
I think you mean that the fact that it's been going up 1500 pts AND has been rising for 5 weeks straight, is a sign of a change of momentum, rather then just the gains we've been having every week.
BTW I really like your posts and I read them almost daily.
Sorry another couple of points I want to make. Have you looked at the volume of the monthly charts of the dow or s&p? Doesn't that have any significance in your analysis? I don't think I've seen a monthly chart on your charts page, or maybe I haven't paid enough attention to them.
ReplyDeleteLastly, to me volume is completely relative. One can get a good sense of buyers and sellers, I agree with that. But during bear markets stocks decline in price, which correlates to volume. When a stock like Citigroup is worth $1 you will see more volume then if it's at a price of $1000. I think that one should be careful when analysing and keeping that in mind.
Sorry I won't take up any more of your page. lol
Don't get me wrong I am bearish overall, but just not currently. And yeah maybe you'll tell me "I told you so" soon lol.
Prince, thanks. As for monthly chart, yes, I do have 2 in my chart book. Just they don't have enough volume information for every month so I have to turn them off.
ReplyDelete