Live Update

Tuesday, May 31, 2011

05/31/2011 Market Outlook (Exhaustion Bar?)

SHORT-TERM: MAY SEE A PULLBACK OF SOME KIND AHEAD

One chart says all today, take a look yourself. See volume pattern illustrated in the chart below, today’s bar could be an exhaustion bar, so either 71% chances a red day tomorrow or 93% chances SPX will close below today’s close soon, and see red cycles, with no exception recently, the pullback may last for a few days. Also don’t forget all the recent statistics below:

I would be speechless if all those statistics fail eventually. That said, since nowadays the most impossible thing is actually the most possible thing, so frankly, I have no confidence at all for bears. Anyway, put emotion aside, I’ll, for now, accordingly, maintain what I blah blah in 05/27 Market Outlook – bullish, yes, but not without a fight. Let’s see…

ExhaustionBar

INTERMEDIATE-TERM: MAY SEE NEW HIGH, TARGETING SPX 1352 to 1381 AREA, BIG CORRECTION MAY FOLLOW AFTER THAT

See 05/27 Market Outlook for more details.

SEASONALITY: BULLISH TUESDAY, WEDNESDAY AND THE ENTIRE WEEK

According to Stock Trader’s Almanac:

  1. Day after Memorial Day, Dow up 8 of last 11.
  2. First trading day in June, Dow up 10 of last 12, 2002 –2.2%, 2008 –1.1%.
  3. Memorial Day week Dow down 7 of last 14, up 12 straight 1984-1995.

Also see 05/20 Market Outlook, Memorial Day week, positive 64% of the time.

For May seasonality day by day please refer 04/29 Market Outlook.

ACTIVE BULLISH SIGNALS:

ACTIVE BEARISH SIGNALS:

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

  TREND COMMENT
SPY & Weekly UP  
QQQ & Weekly DOWN  
IWM & Weekly UP
SSEC & Weekly DOWN  
EEM & Weekly DOWN  
XIU & Weekly UP *TOADV MA(10) too high plus bearish reversal bar, so pullback?
TLT & Weekly UP 3.0.1 20 Year Treasury Bond Fund iShares (TLT 60 min): Could be an Ascending Triangle in the forming.
UUP & Weekly UP  
GLD & Weekly UP  
GDX & Weekly DOWN  
USO & Weekly DOWN
XLE & Weekly UP  
XLF & Weekly DOWN  
IYR & Weekly UP  
XLB & Weekly UP  
  • * = New update; Blue Text = Link to a chart in my public chart list.
  • UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  • DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.

05/31/2011 Trading Signals

THE SHORT-TERM TREND IS UP, I HOLD BOTH LONG AND SHORT (TRAPPED) OVERNIGHT

I think pretty much everyone on Earth knows that the very 1st trading day of each month is very very (insert 100 very here) bullish, so guess the market is ready for another bull banquet tomorrow. I, however, has a little doubt, not necessarily tomorrow would be red, but chances are whatever upside we see tomorrow will be eliminated very soon. As usual, I’ll present my witness in tonight’s report which basically maintains my call in the weekend report – up but not without a fight.

1

For Cobra Impulse System, tomorrow is the key day – breaks above today’s high and closes in green, it’s long, while breaks down below today’s low and closes in red, it’s short.

2

MECHANICAL TRADING SIGNALS: 

  TREND MOMENTUM COMMENT
Long-term 2 of 2 BUY    
Intermediate 5 of 5 SELL 5 of 5 NEUTRAL Cobra Impulse in SELL mode; Non-Stop in SELL mode.
Short-term   6 of 6 NEUTRAL  
SPY SYSTEM ENTRY STOP LOSS INSTRUCTION: back test is HERE, signals are HERE.
Non-Stop 05/10 S N/A Short is for aggressive traders only.
CI Buy & Hold 05/17 S N/A  
CI Swing *Short if breakdown below 05/31 low and closes in red tomorrow. The stop loss will be 2*ATR(10).
*Long if breakout above 05/31 high and closes in green tomorrow. The stop loss will be 1.7*ATR(10).

DEMO ACCOUNT FOR SHORT-TERM MODEL:

TICKER Entry Date Entry Share Stop Loss Exit Date Exit Profit Comment
SSO 05/27/2011 $53.70 100 $52.13 Mistakenly closed the 05/26 long, bought back.
SSO 05/26/2011 $53.24 200 $52.13 05/26/2011 $53.41 34.00  
SDS 05/25/2011 $20.92 200 $20.05 Not fully positioned, may add on the way up.
SDS 05/23/2011 $20.93 200 $20.05 05/25/2011 $21.15 44.00  
SSO 05/20/2011 $54.61 100 $52.74 05/23/2011 $52.41 -221.00 Gap down, manual stop loss used.
SSO 05/18/2011 $54.27 100 $52.74 05/18/2011 $54.65 38.00  
SDS 05/16/2011 $20.51 400 $19.97 05/23/2011 $20.88  148.00  
SDS 05/13/2011 $20.38 300 $19.97 05/13/2011 $20.43 15.00 Half positioned.
SSO 05/12/2011 $54.70 50 $53.49 05/12/2011 $55.26 28.00  
SSO 05/10/2011 $55.50 50 $55.12 05/10/2011 $55.99  24.50  
SDS 05/09/2011 $20.40 300 $19.47 05/12/2011 $20.44 12.00  
SSO 05/06/2011 $55.49 50 $53.49 05/12/2011 $55.18 -15.50 Half positioned.
SDS 05/06/2011 $20.17 200 $19.47 05/06/2011 $20.40 46.00 Half positioned.
SDS 05/04/2011 $20.12 200 $19.47 05/09/2011 $20.25 26.00 Half positioned.
SDS 05/03/2011 $19.94 300 $19.47 05/03/2011 $19.98 12.00 Half positioned.
SSO 04/20/2011 $53.62 100 $54.73 05/04/2011 $54.73 111.00  
LAST   1387.00  
SUM   1692.00  
  • $200 max loss allowed per trade. For fun only.
  • LAST = Year to the last month balance.

05/31/2011 Intraday Comment Thread

http://bbs.cobrasmarketview.com/viewtopic.php?f=2&t=199

Saturday, May 28, 2011

05/27/2011 Market Outlook (Could be green next week but not without a fight)

SHORT-TERM: 63% CHANCES A GREEN NEXT WEEK BUT THERE’LL BE A DIP FIRST TO EVEN REVISIT THE 05/25 LOWS

63% chances we’ll see a green week the next week, however, chances are even higher that there’ll be a dip (before eventually close in weekly green) below the Friday’s close even to revisit the 05/25 lows.

The chart below is my final evil plan for the part of the next week which I’ve mostly mentioned in 05/27 Trading Signals. I made a little modification though as now statistics seems to argue that the chances for a dip are pretty high.

SPY60min

The statistics below argues for a 63% chances a green close the next week but also 93% chances there’ll be a dip of some kind (before eventually closes in green). Besides, see seasonality session below, also argues that there’re 64% chances a green close the next week. By the way, be careful about “the 3rd time is the charm”, because since the March 2009 bull market, this has been the 3rd 4 consecutive red weeks. The previous 2 turned out to be a great chance to retire earlier, just now the question is: Will the 3rd time be different? That said, this so called the 3rd time is merely a speculation for fun, not even a warning as in the intermediate-term session below, you’ll see my forecast is a new high but chances are good that the rally for the 3rd time will be far less than the previous 2 times.

SPX4ConsecutiveRedWeeks

There’re 3 additional reasons why I’m looking forward to a dip of some kind the next week:

  • As mentioned in 05/24 Market Outlook, 70% chances SPX will close below 05/24 close.
  • As mentioned in 05/26 Market Outlook, 69% chances SPX will close below 05/26 close.
  • The 3rd argument is actually the most important one: 0.2.4 Nasdaq Total Volume/NYSE Total Volume spikes again. If you’ve been following me recently, then should have little doubt about this signal now. Actually, the most that makes me feel uneasy is 8.1.1 Normalized NATV/NYTV. The chart below shows all the past cases when the normalized value was higher than that of now, looks obvious that the chances for a dip are pretty high.

NATVtoNYTVRatioNormalizedNATVtoNYTVRatio

INTERMEDIATE-TERM: MAY SEE NEW HIGH, TARGETING SPX 1352 to 1381 AREA, BIG CORRECTION MAY FOLLOW AFTER THAT

For the intermediate-term, I believe we’ll see a new high but even higher chances, the wave count in the chart below could be right that SPX 1381 (Refer to 04/01 Market Recap for how I get the SPX 1381 target) is indeed the wave 5 final target.

Wave5TargetArea

Why do I expect a new high?

  • 3 push up pattern looks still missing the final push up.

3PushUp

  • The most recent II Correction % spikes too high which according to the red lines below almost guarantees that there’ll be a new high ahead, then followed by a real correction (attention, this chart also is the reason I believe there’ll be a real correction ahead, just it could be a new high first then followed by a correction).

IICorrection20110526_ii_correction_zoom

The chart below is another reason (besides the II Correction % above) I believe there’d be a bigger correction ahead: OEX Open Interest Ratio looks a lot like that of year 2007. OEX option traders are famous for being mostly correct about the market, now with this huge open interest ratio, chances are pretty high that something is in the cooking.

OEXOpenInterestRatio

SEASONALITY: BULLISH TUESDAY, WEDNESDAY AND THE ENTIRE WEEK

According to Stock Trader’s Almanac:

  1. Day after Memorial Day, Dow up 8 of last 11.
  2. First trading day in June, Dow up 10 of last 12, 2002 –2.2%, 2008 –1.1%.
  3. Memorial Day week Dow down 7 of last 14, up 12 straight 1984-1995.

Also see 05/20 Market Outlook, Memorial Day week, positive 64% of the time.

For May seasonality day by day please refer 04/29 Market Outlook.

ACTIVE BULLISH SIGNALS:

ACTIVE BEARISH SIGNALS:

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

  TREND COMMENT
SPY & Weekly UP  
QQQ & Weekly *DOWN  
IWM & Weekly UP
SSEC & Weekly DOWN  
EEM & Weekly DOWN  
XIU & Weekly *UP  
TLT & Weekly UP *3.0.1 20 Year Treasury Bond Fund iShares (TLT 60 min): Could be an Ascending Triangle in the forming.
UUP & Weekly UP  
GLD & Weekly UP  
GDX & Weekly DOWN  
USO & Weekly DOWN
XLE & Weekly *UP  
XLF & Weekly DOWN  
IYR & Weekly UP  
XLB & Weekly *UP  
  • * = New update; Blue Text = Link to a chart in my public chart list.
  • UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  • DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.

Friday, May 27, 2011

05/27/2011 Trading Signals

THE SHORT-TERM TREND IS UP, I HOLD BOTH LONG AND SHORT (TRAPPED) OVER THE WEEKEND

Mixed seasonality for the next Tuesday. On one hand, according to Stock Trader’s Almanac, day after Memorial Day, Dow up 8 of last 11. On the other hand, recently the Monday and Tuesday were mostly not so pleasant (see dashed red lines).

23

My guess, purely from the chart pattern, we should have at least one more push up the next Tuesday. This push up is critical because if it cannot make a decisive higher high, then there’re some chances that the rebound is over, the 05/25 lows will be revisited.

1

Those who plan to follow Cobra Impulse System, the short setup is no longer valid today.

4

Enjoy your long weekend!

MECHANICAL TRADING SIGNALS: 

  TREND MOMENTUM COMMENT
Long-term 2 of 2 BUY    
Intermediate 5 of 5 SELL 5 of 5 NEUTRAL Cobra Impulse in SELL mode; Non-Stop in SELL mode.
Short-term   6 of 6 NEUTRAL  
SPY SYSTEM ENTRY STOP LOSS INSTRUCTION: back test is HERE, signals are HERE.
Non-Stop 05/10 S N/A Short is for aggressive traders only.
CI Buy & Hold 05/17 S N/A  
CI Swing

DEMO ACCOUNT FOR SHORT-TERM MODEL:

TICKER Entry Date Entry Share Stop Loss Exit Date Exit Profit Comment
SSO 05/27/2011 $53.70 100 $52.13 Mistakenly closed the 05/26 long, bought back.
SSO 05/26/2011 $53.24 200 $52.13 05/26/2011 $53.41 34.00  
SDS 05/25/2011 $20.92 200 *$20.05 Not fully positioned, may add on the way up.
SDS 05/23/2011 $20.93 200 $20.05 05/25/2011 $21.15 44.00  
SSO 05/20/2011 $54.61 100 $52.74 05/23/2011 $52.41 -221.00 Gap down, manual stop loss used.
SSO 05/18/2011 $54.27 100 $52.74 05/18/2011 $54.65 38.00  
SDS 05/16/2011 $20.51 400 $19.97 05/23/2011 $20.88  148.00  
SDS 05/13/2011 $20.38 300 $19.97 05/13/2011 $20.43 15.00 Half positioned.
SSO 05/12/2011 $54.70 50 $53.49 05/12/2011 $55.26 28.00  
SSO 05/10/2011 $55.50 50 $55.12 05/10/2011 $55.99  24.50  
SDS 05/09/2011 $20.40 300 $19.47 05/12/2011 $20.44 12.00  
SSO 05/06/2011 $55.49 50 $53.49 05/12/2011 $55.18 -15.50 Half positioned.
SDS 05/06/2011 $20.17 200 $19.47 05/06/2011 $20.40 46.00 Half positioned.
SDS 05/04/2011 $20.12 200 $19.47 05/09/2011 $20.25 26.00 Half positioned.
SDS 05/03/2011 $19.94 300 $19.47 05/03/2011 $19.98 12.00 Half positioned.
SSO 04/20/2011 $53.62 100 $54.73 05/04/2011 $54.73 111.00  
LAST   1387.00  
SUM   1692.00  
  • $200 max loss allowed per trade. For fun only.
  • LAST = Year to the last month balance.

05/27/2011 Intraday Comment Thread

http://bbs.cobrasmarketview.com/viewtopic.php?f=2&t=196

Thursday, May 26, 2011

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05/26/2011 Market Outlook (Could see back and forth ahead )

SHORT-TERM: COULD SEE BACK AND FORTH AHEAD

The scenario I mentioned in 05/23 Market Outlook is in the playing as planned – 3 push down, initial rebound then back test the previous low and since it failed again the 2nd time so now the market is trying the opposite direction which is up. Now the problem is the rebound so far is not strong enough (strong but not enough I mean), considering 2 small statistics I’m about to mention below, so my guess is that we could see some back and forth ahead which essentially means it is still too early to say whether the low was in. That said, however, if gap up huge and rise huge tomorrow, then no argue, the mew high will be just a matter of time.

SPY60min

Here is the 2 small statistics I mentioned above:

  • 70% chances SPX will close below 05/24 close. I’ve mentioned this in 05/24 Market Outlook.
  • 69% chances SPX will close below today’s close. This is because today’s ISEE Equities Only Index is 282 which means we retailers are 2.8 times bullish than bearish. This is way too bullish of course, which according to the chart below, when ISEE Equities Only Index > 270, short at today’s close and cover at very first down day since 2006 (the inception of the ISEE Equities Only Index), you’d have 69% chances.

ISEEEquitiesOnlyIndexTooHigh

INTERMEDIATE-TERM: SPX NOW IN 1352 TO 1381 WAVE 5 PRICE TARGET AREA, WATCH FOR POTENTIAL REVERSAL

Maintain what I said in 05/06 Market Outlook. Need pay attention to the possibility that wave 5 ends while primary wave 3 sharply down has started. Still just an attention, not even a warning though.

SEASONALITY: NO UPDATE

For May seasonality day by day please refer 04/29 Market Outlook.

ACTIVE BULLISH SIGNALS:

ACTIVE BEARISH SIGNALS:

ACTIVE BULLISH OUTLOOKS:

ACTIVE BEARISH OUTLOOKS:

HIGHLIGHTS OF THE OTHER ETFS IN MY PUBLIC CHART LIST: 

  TREND COMMENT
SPY & Weekly UP  
QQQ & Weekly UP  
IWM & Weekly UP
SSEC & Weekly DOWN  
EEM & Weekly DOWN  
XIU & Weekly DOWN  
TLT & Weekly UP  
UUP & Weekly UP  
GLD & Weekly UP  
GDX & Weekly DOWN  
USO & Weekly DOWN
XLE & Weekly DOWN  
XLF & Weekly DOWN  
IYR & Weekly UP  
XLB & Weekly DOWN  
  • * = New update; Blue Text = Link to a chart in my public chart list.
  • UP = Intermediate-term uptrend. Set when weekly buy signal is triggered.
  • DOWN = Intermediate-term downtrend. Set when weekly sell signal is triggered.

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