Live Update

Thursday, August 27, 2009

08/27/2009 Market Recap: Indecision

Summary:

No conclusion, small body bar formed today could mean either a continuation or reversal.

Expect INDU to pullback soon.

Could be a Bear Flag in the forming on Shanghai Index.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Up Neutral Further confirmation needed for the intermediate-term buy signals.
Short-term Up Neutral  
My Emotion Wait*   Still think this is a bear market rally.

Nothing to say. Small price bars for 4 days in a row indicates an indecision which could mean either a continuation or reversal, so still have to wait for tomorrow. Just, INDU has been up 8 days in a row while the volume kept decreasing in the last 5 days, this is a typical price-volume negative divergence which usually means a pullback, so it’s possible that INDU could pullback as early as tomorrow.

INDUDaily

7.4.5 Shanghai Stock Exchange Composite Index (Daily), just have a look, could be a Bear Flag in the forming so Shanghai index may go down further. How the correction of the Shanghai index going to affect the US stock market is remained to be seen.

SSECDaily

13 comments:

  1. Tomorrow should be another light volume day as traders leave early for the weekend. I don't expect too much to happen. Probably another flat day with a upside basis. It wouldn't surprise me to see them (Government Sachs... AKA "The PPT") use the extremely light volume to break the overhead resistance at the 1040 area, and create a new high.

    They are like a bully at school. And we (the retail traders, trying to be professionals) are the students. The bully has been beating us up while the teachers (aka - the professional traders) are away for vacation. School is back in after labor day. Let's see if the teachers can teach the bully a lesson or two?

    Dan Black

    P.S. An excellent read on the history of September is available here at this link. As a bonus, the author speculates on what could be used to send terror and fear into the people and the market. What is it? None other then another government created disease... aka "The Swine Flu". A must read... for your Health and the well being of your family and friends.

    http://www.amanita.at/docs/open/newsletter-e.pdf

    ReplyDelete
  2. Too many indecisions cobra? If you expect DJI to pullback it's obvious other indices will follow.

    You are paralyzed by too much analysis.

    Appreciate the daily updates.

    ReplyDelete
  3. The trade today in the five minute charts of the sp was unlike any we have seen for quite awhile. No gap down, no gap up, just opened flat and then slowly went about its way being forced down by the market makers in straight small bars, not public selling to a point where support was broken and then they drew in the public shorts and then proceeded to backtest support and broke it again and then really drew in more shorts and then proceeded to take the market back up to make them all loose money for the day traders. At some point the only way to trade becomes not to trade.

    ReplyDelete
  4. Dear Cobra,

    Excellent analysis as always. An interesting idea I caught my ear on Fast Money today and it was the perception that everyone right now is thinking this market is experiencing exhaustion, but if this were any other time (as in not after a 400pt runup in S&P), then we'd be talking about the market positively as its basing.

    Biases aside, is the market exhibiting behavior that could also be described as basing? I'm always thinking about the "what if" and certainly the idea the market is basing, is definately the hardest trade to put on right now.

    Best to all,
    -A.

    ReplyDelete
  5. Shanghai is freefalling right now.

    Market breadth was positive today and despite the Dow being up 8 days in a row, the McClellan Oscillator is dropping to the 0 line. Very bizarre. It would be interesting to see the market make a new high with McOs at the 0line.
    The market might make a doji on the weekly. If the markets are positive for the week, then a weekly sell signal is triggered also.

    -----Mr. Panic

    ReplyDelete
  6. Mr Panic and Dan Black - The posts are Excellent. Kudos to Cobra of course - that should be known by now. Just giving credit to the two above for making this blog even more worth its weight.....

    ReplyDelete
  7. This comment has been removed by the author.

    ReplyDelete
  8. Cobra, you MUST look:

    http://www.ciovaccocapital.com/sys-tmpl/investmentresearch/

    Asset Class Outlook - Download PDF Version

    I allways (every morning) reading your posts :)

    With the best!

    ReplyDelete
  9. Quote:
    Gordon said...
    The trade today in the five minute charts of the sp was unlike any we have seen for quite awhile. No gap down, no gap up, just opened flat and then slowly went about its way being forced down by the market makers in straight small bars, not public selling to a point where support was broken and then they drew in the public shorts and then proceeded to backtest support and broke it again and then really drew in more shorts and then proceeded to take the market back up to make them all loose money for the day traders. At some point the only way to trade becomes not to trade."
    ...
    i feel like such a fool, my trading port was set-up perfect for the mornings free fall, it was up 2.5K, then i took an hour long nap, woke-up to find i had lost my shirt.... ended the day down 1400.
    PS i use 5 minute charts as well.

    ReplyDelete
  10. here's my favorite McClellan chart.
    http://stockcharts.com/h-sc/ui?s=$NYMO&p=D&yr=0&mn=6&dy=0&id=p03501443037

    ReplyDelete
  11. I think today was a perfect example of market manipulation. Market didn't move on the news as usually is the case, so most ppl expected flat boring day, similar to the day before. However they first initiated panic and run bull stops from below 1018 and made it look like it's gonna be a strong down day,then with no apparent reason the market suddenly turnaround and after running bear stops at 1032, finished near the highs, which probably never happen after such an open. Probable reason is that today was a bond auction and FED printed some money and gave to his primary dealers(friends) at GS, JPM and others so they could rig the market up.(same thing happenned many times recently on bond auction days). So now it looks on the charts like major support was tested and held, which was made in a at least fishy manner same as Monday 17th, when they dumped it over 2% overnight to major support and after market opened so low there were no too many bears eager to short it at that level. Then they just took it up for the Opex and broke another major resistance on the news on the Opex day! Another strange action took place 29th of May, when HUUGE bids started flying at the end of day on Friday, and then just easily broke resistance overnight on Monday. All these situations appear at least fishy to me, maybe someone with more experience could elaborate more on those breaking resistance/testing support actions.
    Thanks, fafura

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  12. Thanks for the info, I'm now mostly on cash.

    ReplyDelete
  13. Oh, I've noticed that NYMO sits at zero while the market is at new high, pretty strange, which could mean the buying is not broad based...

    ReplyDelete

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