OK, I admit I was wrong. The “n vs n” setup didn’t work this time and I’ve stopped out as soon as SPX 1018 was broken.
I expect a red close next Monday, because CPC and CPCE are way too bullish. Counting the dashed lines in the following 2 charts, apparently the odds are high a red close the next day.
Because today is a Major Accumulation Day (NYSE Up Volume : NYSE Down Volume > 9) so from the chart below we can see a pullback if any after the Major Accumulation Day is usually shallow.
Enjoy your weekend!
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Thanks! have a nice weekend!
ReplyDeleteCobra, do you remember the last time CPCE was this low (0.39)?
ReplyDeleteBonny, I'll do some research this weekend. Right now I see some cases in 2004 and 1 case in 2006 were below 0.4.
ReplyDeleteJust the absolute value is not important because in different period CPC/CPCE/CPCI extreme values are different.
Thanks Cobra.
ReplyDeleteCobra, what was the date of the 2006 example? Thanks.
ReplyDeleteHohoho, here comes BEN!
ReplyDeletehttp://www.youtube.com/watch?v=aSmKEuHuU_s&feature=player_embedded
ReplyDeleteCobra,
ReplyDeleteYou did a great job on on this site!
http://stockcharts.com/h-sc/ui?s=
ReplyDeleteGolden cross?
I see bearish cross only
ReplyDeleteNick on the Macd?
ReplyDeleteAnonymous, what I see is large divergences on the macd, stochastics, and rsi in the daily time frames.
ReplyDeletecobra, great charts. dont beat up yourself for calls gone wrong. you stick your neck out. that is brave
ReplyDeletethanks
the latest swim suit design.
ReplyDeletehttp://img268.imageshack.us/img268/407/swimsuitdesign.png
Cobra,
ReplyDeleteYou should try thinkorswim charts. You don't need to open account but register to use the software. You'll have field day with many technical studies which could give you better gauge of the market.
I disagree the pullback will be shallow.
Money flow, thrust index, momentum, bollinger band, etc...is weaker than what the the A/D is signalling.
Most likely break below prior support of 98.
Cobra, since you've helped me make some serious money (in the past...LOL), I wanted to share a new theory I had on how to use CPC to time the market. There are handle of rules I've created.
ReplyDelete1) Spikes in CPC above 0.95 accompanied by a distribution spike are near bottoms.
2) Spikes in CPC below 0.7 accompanied by an accumulation spike are near tops.
3) Buy as CPC is falling and sell as CPC is rising. I used a smoother line to simplify the signal on the 3rd chart down.
4) In general, spikes in "normalized" CPC and sudden reversals mark turning points.
Comprehensive strategy is found here:
http://stockcharts.com/h-sc/ui?s=$CPC&p=D&yr=1&mn=0&dy=0&id=p90043251374&a=176108822
Right now we're in a buy sequence according to this signal, and it put us at a buy signal since the middle of this week, but because of today's low CPC spike accompanied by an accumulation spike, we are probably very close to a significant top.
You are missing one more chart:
ReplyDeleteyour wrong/right prediction.
It would be interesting to see all market manipulation then you are wrong.
Cobra,
ReplyDeleteWe are not trying to predict just the tomorrow. We are trying to predict the trend. I told you that you made the same mistakes that you did for 869-1018. Four days we are going up which makes a trend from 979 to what ever, 1024? 1040? 1050? and we just missed it. doesn't matter if we have one red close on monday, we just missed this rally. We missed the trend because we believed that the n versus n rule should work, we missed it because we believed that the rally was not satisfactory and the volume was not that high. So if this was the case, how come all these people found out that they should buy all those calls just Today? how do they know that they should go seriously long today after three days up and all these divergences? How do they know and we don't? Who are these people who buy these calls anyway?
Anony at 9:35pm, I wish I could explain all these to you, just sometimes the language isn't enough.
ReplyDeleteTA is about to find higher odds and what I've been doing everyday is trying to find which side has the higher odds. And this means I'll miss some opportunities which appears to me (but not to other people) with no odds. This time I bet on the wrong side but at least my trade was based on the evidences - if you do believe that my evidences are valid. Yes, it didn't work but as long as I keep betting on the side which has higher odds, eventually I'll win on a longer time basis.
I lost opportunities twice, because they were rare events so that I didn't see odds from them. I'm not saying I'm right, just I'm still glad that I stick to all the evidences that I understand.
I know the evidences I belive could be wrong or I could be so biased that I don't see the right side. And this is also what I've been doing everyday - trying to improve myself here. And also that's why everyday I give lots of evidences so that you could judge for yourself if all these evidences are reliable or not.
Anony, I sincerely wish I could answer your question with all the words I know. I sincerely wish I could help you to win money. Just you have to treat what I reported everyday with grain and salt, after all, I'm not god otherwise why I blog here? Instead I should've been somewhere bathing under sun now. Let's learn from each other and improve together, that's all I can tell you.
P.S. It matters if we got the red Monday and if you do believe that these call buying people are correct, then Monday is your chance to take part in.
Cobra, what I do every nigth is study the charts, decide the direction to take the next day then I come to your site to confirm my decision, if it's different then yours then I rethink about my decision. My point is you help me to verify my charts. Thank you Cobra.
ReplyDeleteI understand what you say Cobra. I have learned a lot from your charts and your blog. So I wish you would just keep going. What makes me sad is that I feel the market is somehow giving rewards to stupid people who buy lots of calls just for no obvious reasons and punishes smart people like you or others who try to understand the odds. If you are a new trader like me who is learning things, you may feel discouraged and decide to take a more of an investment approach rather than a trading approach. Although I made a lot of money in the bear market, I nearly lost all of the gains in this ridiculous rally, the irony is that, I understand much more now about trading than one year ago when I nearly knew nothing.
ReplyDeleteAnony at 11:01, from my experiences as long as I'm on this game I must strictly bet on high odds and try best to lose less money each time I'm wrong. Purely betting on luck will eventually lose all, no matter once how rich I was. We'll know this pretty soon.
ReplyDeleteI believe the market is in the final crazy stage. No point to short against it now, but bears'll be back very soon.
The Hook, the last time CPCE < 0.4 was Jan 24, 2006.
ReplyDeletenice discussion.
ReplyDeleteCobra:
ReplyDeleteGreat charts. Your's is the first and last site that I have visited each day for the past six months or so. I can't imagine how you keep up with the work.
It was nice of you to explain the role of probability in establlishing the stock trend. It has taken me more than a decade to realize that if you consistently invest in positions with relatively high odds, and cut losses when those odds turn the other way, then the $$ will eventually follow. "Stock picking" is the least important factor.
Good luck & thanks again.
Anonymous 9:35 has launched an interesting discussion.
ReplyDeleteMy point of view: whoever wants to make real money with trading/investing has to build up a personal trading scheme. On the long run it will not help him to copy anyone’s ideas. Neither a financial advisor nor a letter writer, a friend, banker or blogger will be much help. The only guru whom he can truly trust is himself - his own knowledge and skillfulness.
There are people who lose money and people who make money. The only difference is that the winners a) read a lot, b) tread very carefully when a trend is young, c) are bold when the trend is obvious, and d) can distinguish between personal anxiety and when to be fearful because a trend shows signs of fatigue.
What I like about this blog is that Cobra is intelligent, honest and follows his system consistently. But Cobra is a different person than I, he might have more (or less) capital, he leads a tedious lifestyle (he works day and night), he has other priorities when he plays the market and above all, our ways of thinking might vary in many ways.
For me the purpose of reading this blog is not to play the market according to Cobra’s beliefs, but to carefully evaluate what Cobra sees and let small bits of that information seep into my own decision making process. Cobra’s arguments are valid, but there are many other valid arguments. And Cobra is the first person who will acknowledge this – am I right Cobra?
For example: whoever decided not go long after the break of 960 might have believed that it was a bull trap, or the person had some other valid reasoning. But the final call to decide if such a major market move is a breakout or a deadly trap is up to the trader, and nobody else is responsible.
I hope Anonymous 9:35 reads this...
i would like to speculate on Friday's option-expiring break-out being a false one? Is the S&P ever known to have risen Friday's amount and to sustain it for three days - in order to implode again next Tuesday August 25th?
ReplyDeleteCobra, thank you so much for your instructive website!
Amendment to my post: in the second paragraph I forgot to mention e) cash. Winners are never over invested, they want to grasp opportunities and avoid going broke. I hear that GS has increased its cash positions by about 60% these last few months, which are now at USD 160 billion.
ReplyDeleteSince the upside is limited but tremedous downside risk. I already 50% short.
ReplyDeleteI agree. There's too much risk of chasing this market. I just let it bust like China
ReplyDeleteEWI:Boy,
ReplyDeleteChina is on a rebound. how do you feel like this one? a bull trap or a rebound rebound?
This rebound is the last chance to lighten up before a more severe drop comes. Most emerging markets have already topped out. Market will be weaker as the tax loss selling season is approaching.
ReplyDeleteI agree with EWIboy, Bombay market is the next one to drop. The weekly chart show a huge neg. div.
ReplyDeletethis is a great site. Just wanted to mention in the 2003-2007 bull market a equity only put call below .40 was not bearish at all. it showed a tendency to close red the next day but 2-4 days out was actually buliish. Your a sentimentrader fan cobra did you notice the bull bear rsi was as low as it has been in a year betting on a major market decline? i found that interesting on a day the s&p made new highs. I think simply buying pullbacks and scaling out into strength is the only viable strategy now. I was long a little uwm but sold it thurs.
ReplyDeleteDave Appel
this weekly study shows a euphoric/tulip bulb mania "possible" blow-off top... odds suggest next week red...http://img31.imageshack.us/img31/4212/euphoric.png
ReplyDeleteLet me get this straight.
ReplyDeleteOur new health care plan will be written by a committee whose head says he doesn't understand it, passed by a Congress that hasn't read it, signed by a president who smokes, funded by a treasury chief who did not pay his taxes, overseen by a surgeon general who is obese, and financed by a country that is nearly broke.
What could possibly go wrong?
Extreme CPCE, lets see how this plays out. http://img23.imageshack.us/img23/6708/extremecpce.png
ReplyDeleteDave, thanks for reminding me. I just noticed this bull bear rsi. Looks like we're at a bottom?!
ReplyDeleteAnony at 8:16pm, the CPCE chart is interessting. Thanks.
ReplyDeleteBut Anony at 7:13pm, I'm not sure if we can use weekly NYUPV:NYDNV?
Cobra said "I'm not sure if we can use weekly NYUPV:NYDNV?"
ReplyDeleteRed line shows market "down" after extreme up volume, Green line shows market "up" the week following extreme up volume... in the last 3 years 13 red weeks followed, and 10 green weeks followed. thus Cobra may be correct.. what surprises me is that the largest market sell offs seem to occur during minimum up/down volume, areas circled...
http://img197.imageshack.us/img197/7749/blowofftops.png
Anony at 7:42pm, it looks like a very good trading setup. Thanks so much. And sorry for later "thanks", I don't know what's going on as I just saw your comment.
ReplyDeleteAnony at 10:06, thanks. Actually I mean what actually the weekly NYUPV:NYDNV represents? It probably just mean the Friday's readings, then I think maybe we shouldn't use this chart?
ReplyDeleteCobra, you mentioned the last occurrece of a CPCE close below .4 was 1/24/2006. Im seeing 4/10/07 the cpce closed at .39. Are you not seeing that date? Wondering if this is a data issue on my part..
ReplyDeleteAlso, do you have any charts tracking divergence between New 52 week highs and price highs? i Believe that may have triggered a short term sell as well - not sure yet however as i haven't looked to see if there is any correlation.