Live Update

Friday, July 31, 2009

07/31/2009 After Bell Quick Summary

OK, my face is a little hurt today (slapped by the market AGAIN) because the SPX finally closed 0.73 point higher, hmm, hey, Nasdaq did close in red, well, no excuse, wrong is wrong, even SPX closed 0.73 point lower, it’s still far less than I’d expected. But just take a second look at my CPCE chart, what had happened last time it went wrong? So I’d risk my face again for next Monday, after all, my face has been hurt a lot ever since I started this blog, so it already gets so used to it… LOL


Here’s another reason that we might see a red Monday: Both VIX and SPX were green today, by counting red vertical lines below, 9 of 12 times, the next day was closed in red. Plus several other reliable overbought signals which I’ll talk in the weekend report…


Take a look at the intraday VIX, all of sudden it rose a lot, got to be something happened. If I remember correctly, this kind of sudden rise or fall has been a very reliable leading indicator recently.


One question for you which I don’t have any answers: Why did TLT rise this much recently? Since most people now believe we’ll see SPX 1200 pretty soon, why bother buying bond which may go sharply lower if SPX does go to 1200?


Have a nice weekend!

Thursday, July 30, 2009

07/30/2009 Market Recap: Turning Point?


Could be a down day tomorrow.

Could be a turning point today or very close.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought  
Short-term Up Neutral  

Because CPC < 0.7, so in the After Bell Quick Summary, I mentioned that higher chances a down day tomorrow. Just at that time, I wasn’t sure if I got the correct CPC readings. Now thanks for a reader, I’ve confirmed the readings form the official CBOE site at htttp:// Also, 2.8.0 SPX:CPCE, because CPCE < 0.56, see dashed red lines, this also means a down day tomorrow.


1.0.2 S&P 500 SPDRs (SPY 60 min), After Bell Quick Summary mentioned that SPY now has 8 unfilled gaps. Here is another chart with more restrict gap criteria, 1.1.0 Nasdaq Composite (Daily), even so, it still has too many unfilled gaps. So I believe that today’s gap may likely be filled within a very short time.


T2103 Zweig Breadth Thrust from Telechart, overbought plus negative divergence. The overbought signal is quite reliable from this chart.


0.0.3 SPX Intermediate-term Trading Signals, too many negative divergences. Especially NYADV and NYUPV, not only a “vacuum” divergence exists between them but also each have negative divergence on its own.


1.1.4 Nasdaq 100 Index Intermediate-term Trading Signals, black bar looks bearish to me.


7.6.0 SPX Cycle Watch (Daily), could be a turning day today. (The chart has drawing problem, so the cycle is actually due today.)


To summarize, possibly we’re very close to a short-term top or even have already passed the short-term top, therefore I expect a little bit bigger pullback ahead. As for target, well, I’ll discuss after the pullback being confirmed in case the market slaps me on the face AGAIN tomorrow... LOL.

07/30/2009 After Bell Quick Summary

If, pay attention to “IF”, the CPC from the reads correctly which sits at 0.66, then good chances a red close tomorrow. The reason, I said “IF” is because from the official CBOE site, the CPC is now at 0.72 which not only means 77% chances a green close tomorrow but also a firework trading setup was triggered. As usual, I’ll use only as the standard, so I will for now maintain a down day prediction unless I see something else in tonight’s report.


Oh, SPY now has 8 unfilled gaps with lots of negative divergences on chart below, so very hard to image we’ll have yet another gap up tomorrow and that gap remains unfilled…


Wednesday, July 29, 2009

07/29/2009 Market Recap: Bear’s Straws


Could be an up day tomorrow, not sure though.

Bear's hope relies on US$ and Yield.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought  
Short-term Up Neutral  

According to 2.8.3 CBOE Options Index Put/Call Ratio, I made a “green close” guess in After Bell Quick Summary. Now I’ve got the final readings from, which is 1.55, well, maybe not high enough, but it still has a little edge for a green close tomorrow, not sure though.


The market looks very resilient in the recent 2 days pullback. According to 7.1.0 Use n vs n Rule to Identify a Trend Change,  2 vs 2, bulls won. So this is a buyable dip, well, theoretically.


What about the next then? Lots of Elliot Wave analysts think there still could be one final push up before a bigger pullback kicks in and after that the market would go to a new high much much higher. From chart pattern, however, there’re still 2 possibilities, so let’s wait and see.

1.0.3 S&P 500 SPDRs (SPY 30 min), this is a Bearish View, could be a Roof pattern in the forming.


1.0.4 S&P 500 SPDRs (SPY 15 min), this is a Bullish View, could be an Ascending Triangle in the forming.


Anyway, I think most would agree that the rally is near its final stage. Bears now have 2 straws: The US$ which could rise and the yield which could drop. These 2 factors could result in a bigger pullback of the stock market.

3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), this might be the most important straw for bears. It had a breakout today, rejected by MA20 though. So whether it could finally stand above the MA20 would determine the bears’ destiny. Pay attention to Euro (FXE) and Yen (FXY), they’re all at an important point now. The drop of the FXE and the rise of FXY are not good for the stock market.


3.0.0 10Y T-Bill Yield, Bearish Tri Star should be confirmed today so yield could drop further (means a flight to safety) which is not good for the stock market.


07/29/2009 After Bell Quick Summary

My GUESS is that the market may close in green tomorrow. Two reasons:

CPCI reads around 1.57, this is too high and often results in an up day the next day. I cannot show you the chart now because only after 7:30pm ET, can the has the correct readings. I calculated this reading directly from Well, may have different readings tonight. I think as long as it reads above 1.55, the chances of a green close should be good tomorrow.

As mentioned in last night report, today is the end of 7 trading day cycle which could be a turning day. As we closed lower so probably the market will turn up tomorrow.


Oh, we had 4 days in a row a gap down open, so what the chances are that we have another gap down open tomorrow?

Tuesday, July 28, 2009

07/28/2009 Market Recap: Back Test or Ascending Triangle?


Could be a back test of a broken Bearish Rising Wedge or an Ascending Tirangle is forming.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought  
Short-term Up Neutral*  

Not much to say today. Not sure if the market still has one push up or will continue to pullback. Let’s see how market unfolds tomorrow.

1.0.3 S&P 500 SPDRs (SPY 30 min), this is a bearish view. A bigger Bearish Rising Wedge was broken and then back tested. A smaller Bearish Rising Wedge was broken and then could be back tested again. If so, tomorrow the market may continue to pullback.


1.0.4 S&P 500 SPDRs (SPY 15 min), this is a bullish view, an Ascending Triangle could be in the forming.


1.0.2 S&P 500 SPDRs (SPY 60 min), tomorrow will be the end of 7 trading day cycle which is a potential turning day. So if the market rise, then tomorrow could be a short-term top, while if the market drops, then tomorrow could be a short-term bottom. About the reliability of this 7 trading day cycle, please refer to 7.6.1 SPX Cycle Watch (60 min). At least it looks pretty reliable to me.


07/28/2009 After Bell Quick Summary

I don’t see anything special today so have no idea about tomorrow. A wild guess though, since we had 3 days in a row opened with a gap down, so how good the chances are that we have yet another gap down open tomorrow? Meanwhile, just a reminder, if we have a gap up open tomorrow, it’ll be the 8th gap on the SPY chart, I’m not sure if it could hold or not.


In case someone wondering, bad or good when ISEE Equities Only Index closes above 220? As it looks too bullish, the call:put ratio is 2.2:1. Well, here’s the chart, we had only 4 cases recently, the ISEE Equities Only Index read above 220. It says nothing to me…



Monday, July 27, 2009

07/27/2009 Market Recap: CPCE too low


Could be a down day tomorrow.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought  
Short-term Up Overbought  

Because the final correct CPCE chart from is only available after 7:40pm ET, so today’s After Bell Quick Summary missed an important readings: CPCE < 0.56. This reading should have cancelled the 2 bullish effects caused by CPC < 0.8, which are 77% chances a green close next day and a firework thereafter. So CPCE < 0.56 plus “both SPX and VIX are green on the same day”, now it looks like higher chances a red close tomorrow.

2.8.0 SPX:CPCE, from this chart we can see that whenever CPCE < 0.56, the next day wasn’t very pleasant. Also about CPCE here are some statistics: Equity Put/Call Ratio Suggests Down Day.


7.0.4 Extreme CPC Readings Watch, from this chart we can see that CPCE has higher priority, even CPC is bullish.


7.3.2 Firework Trading Setup, likewise, CPCE has higher priority.


Nothing else to say. Lots of Elliott Wave analysts have predicted a final push up then a bigger pullback and then a new high. 1.0.3 S&P 500 SPDRs (SPY 30 min), a smaller Bearish Rising Wedge could be formed, plus lots of negative divergences, so it supports what Elliott Wave says: a pullback is very close.


T2103 Zweig Breadth Thrust from Telechart, still overbought.


T2122 4 week New High/Low Ratio from Telechart, the overbought worked even in the most bullish period. But from this chart, the market may still have a little up room though.


07/27/2009 After Bell Quick Summary

I’ve got conflicting signals again. With CPC < 0.8, not only a “firework” trading setup triggered but also it means we have 77% chances a green close tomorrow.



But we also have both SPX and VIX closed in green today which means 8 out of 11 times on the chart a red close tomorrow.


Personally, I’d give CPC signal more credit as VIX was wrong twice already recently.

Some comments for your info only:

Anonymous said...

Thanks a lot. But, it seems that $CPCE closed around 0.53 based on the data here:
Can you kill your "firework"?

Cobra said...

Hi, Anony, yes, I saw that. But this time I'll be very careful waiting until 7:30pm ET as doesn't report exactly what I calculated from CBOE. should include the last 15min AH changes.

Saturday, July 25, 2009

07/24/2009 Market Recap: A mail from a veteran trader


Still suspect the current rally but I'll sure not trade against it.

Still expect a short-term pullback.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought  
Short-term Up Overbought  

1.0.0 S&P 500 Large Cap Index (Weekly), the most common believe I saw is that this is still a bear market rally, the target could go as far as Fib 61.8 at 1250. The rally could last until Oct or next year.


And after the rally, there'd be a long last bear market similar to 1929. Borrowed a chart form Tim Knight’s Legends of the Fall, in which most believes that we are now within the green zone of the chart.


Well, is it true? Or is it possible a bull market has already started? Frankly, I have no idea about the market direction now because my signals are arguing for a top but the bullishness of the market makes me afraid of believing those signals. In today’s report, I’ll simply put all those signals together and let you make your own decisions. The bottom line is that I don’t believe this rally, but since almost all my intermediate-term signals are yelling for buy now therefore I won’t trade against them (This probably means I’ll trade lightly on the long side at the very beginning or simply stand on the sideline). Also via the Long Term Liquidity Flows from, we can see that the liquidity has reached the previous bull market level. So unless something really really catastrophic happens which makes the Fed stop its money printing business, the market would find itself very hard to drop. And right now, via my human brain (which is already badly damaged by the recent bullishness) I really couldn’t think of anything that catastrophic.


Indicator Explanation: Long Term Liquidity is a measurement of Liquidity Injections flowing into the market from M3 and Foreign sources. Liquidity Expansion means that money inflows are at an expansionary rate which drives the market up. Decelerating Expansion is when the rate of inflows are decreasing while still net positive. Liquidity Contraction means that money inflows are being withdrawn from the markets at a level which is "net negative", and when this happens, the contraction results in a correction or pull back.

0.0.3 SPX Intermediate-term Trading Signals, NYADV and NYUPV negative divergence plus VIX:VXV sell signal plus various negative divergences. This chart is the main reason that I’m skeptical.


Compare the above chart with the 2003 bottom. It didn’t have above problems with the same indicator set. (VXV wasn’t introduced in year 2003, so there’s not VIX:VXV indicator.)


A longer history about NYADV and NYUPV negative divergence listed below.


2.3.3 NYSE Total Volume, I cannot explain why volume keeps decreasing since media paints so bullish about the market. 8.0.6 Use NYTV to catch the market top/bottom, here’s a longer history. Normalized NYTV as an indicator is pretty reliable.


2.3.4 Nasdaq Total Volume/NYSE Total Volume, this still looks like a top. 8.0.1 Use NATV/NYTV to catch the market top/bottom, here’s a longer history. Again, normalized NATV:NYTV is reliable too.


1.2.1 Dow Theory: Averages Must Confirm, $TRAN hasn’t confirmed the $INDU’s new high yet. Personally, I don’t consider this chart as very important because $TRAN may catch up later.


Short-term, I still expect a pullback.

1.0.3 S&P 500 SPDRs (SPY 30 min), Bearish Rising Wedge plus lots of negative divergences.


Zweig Breadth Thrust from Telechart, very overbought.


Before I finish this report, I’d like to show you a mail from uempel who has been a trader for more than 2 decades. I believe he’s trying to tell me, in a very diplomatic way, that I shouldn’t be too bearish. I think the mail is suitable for all the bears who visit my blog often. Sometimes, stop and take a rest could be the best strategy. Well, I’m not saying that he’s right about the current market. Just I respect whatever he says.

I lost some money yesterday, because I was fooling around with the SPX at 960 – I was expecting a small drop. The up-move caught me by surprise and I had to jump out in a hurry.

But it was entirely my mistake – I had not studied the charts without a bias, I was not neutral.

I’m not sure if you are familiar with P&F charts, but this chart shows two things quite clearly, 1.) the trend is to the upside and 2.) the next resistance levels are at 993...

And something else: a great EW analyst, an Australian by the name of Zoran Gayer, got completely messed up in 2003. He just did not notice the change of trend in March, failed to understand that the market was heading north again. For 3 years he kept on making bearish calls. There is also a tragic aspect to the story: he died in 2006. You can read all his posts in the archives at Safehaven com, search for Zoran Gayer. It’s worthwhile taking a look at them, because they are really good charts and what he writes makes sense. But Zoran was wearing blinders.

Why am I writing this: the lack of enthusiasm for this rally will propel it to the upside. The SPX could easily be 150 points higher in a few months time.

I shall be going to my mountain house for a few days. No internet connection there, I shall do the lawn (no high-tech), plant some trees (I intend to plant many birches around the house) and last but not least: I want to forget my work and the market for a little while...

Friday, July 24, 2009

07/24/2009 After Bell Quick Summary

I don’t know what next Monday will bring us. Some idea about Monday gap up open though:

If we have a gap up open next Monday, then it’d be the 8th gap on the SPY chart.


Also, since Monday gap is also a weekly gap which is very rare. We’ve already got a weekly gap this week, so what the chances might be, we have another weekly gap and it remains unfilled?


So the conclusion is that maybe the Monday gap up open, if any, will be filled in a short time therefore bears who sneaked in before the close might have chance to escape unharmed.

Cumulative TICK from, if someone still is interested, still shows negative divergence.


07/24/2009 Institutional Buying and Selling Trending

Institutional Buying and Selling Trending from

The first chart is the most recent one including yesterday’s no so impressive accumulation.


The 2nd chart shows a longer history, someone on my Chinese forum stitched the past charts all together.


The purpose of showing these 2 charts is that I want you to pay attention to the near “chart wise” record low distribution at around 5,000. Don’t know what will happen if the distribution hits the record low.


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