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Sunday, February 1, 2009

01/30/2009 Market Recap: No Title

Although market fell on Friday, but 2.8.0 CBOE Options Equity Put/Call Ratio and 2.8.2 SPX:CPCE failed to confirmed that Wednesday was a top, so bears and bulls still can argue with each other. My view is still as illustrated in chart 0.0.2 SPY Short-term Trading Signals, most indicators are near a top instead of a bottom. Monday, market could rise at least in the morning.


1.0.4 S&P 500 SPDRs (SPY 15 min), main reasons for the possible Monday rise (although Monday traditionally the weakest week day, usually Tuesday is a turnaround day), lots of positive divergence.


1.3.7 Russell 3000 Dominant Price-Volume Relationships, 1424 stocks price down volume up which means an oversold tension.

2.8.0 CBOE Options Equity Put/Call Ratio, trend line remains intact, this means that the Wednesday top has not been confirmed yet.



Some interesting charts:

1.0.2 S&P 500 Large Cap Index (Monthly), I guess everybody is talking Jan Barometer, in order to make sure you know that I know this as well, so here comes this chart.

3.0.0 10Y T-Bill Yield, possible top signal. However I'm not sure now as bond market and stock market seem not closely related recently. (Yes, they're related, just I haven't found any rule to apply them yet.)

3.0.3 20 Year Treasury Bond Fund iShares (TLT Daily), TIP outperforms which means inflation, so my GUESS is that bond will keep dropping while the spring of commodities is coming.



  1. Dear Cobra,

    Thank you for your great analysis of the stock markets. I really appreciate you taking the time to prepare such impressive analyses each day.

  2. Cobra,

    I'm not sure I understand the 10-year T-bill chart. Are you saying that when the 30-day ROC is greater than 9, then the equity markets have most likely topped?

  3. Yes, correct. ROC30 > 9, market topped (sometimes a month ahead though). Check 8.0.4 and 8.0.5 in my chart book for the visual back test of this indicator.

  4. In general, I'm having difficulty interpreting today's report.

    Although U.S. market futures are down almost 2% at the moment, it appears that you believe that charts point to a bounce on Monday morning. Outside of that short-term (perhaps done by midday Monday) bounce, however, I'm not clear on whether your analysis is suggesting renewed weakness or a broad resurgence in the markets this week.

    Are the signals too mixed to render an opinion?

  5. Yes, singals are mixed, no solid conclusion, although I believe the trend is down.

    I have my own guess about how the market goes next week, but the format of my report is based on the facts, so if no facts, I won't say anthing additional.

  6. What is the Volume confirmation on a Head and Shoulders?

  7. Volume confirmation? I don't understand the question. General rule, breakout/breakdown requires bigger volume.

  8. This comment has been removed by the author.

  9. Don't get me wrong, your TA kicks ass.

    I've just heard "Head and Shoulders" every bounce for 4 months now. On every bounce...

    And as a sentiment indicator, I bet Head and Shoulders will be valid as soon as everybody is sick of hearing it. There is a "Volume Confirmation." Which doesn't fit the pattern. Not saying it is or isn't valid, but it weighs against it.

    As with life, The questions are more interesting than the answers.

  10. No worries...Only anonymous because I'm not interested in spending the few valuable hours of my life having arguments on the Internet.

    Rather be an anonymous asshat.

  11. Cobra:

    Your "Russell 3000 Dominant Price-Volume Relationships" chart appears to show the latest bar as being bullish.

    Also, the guide to the right of the chart states that Price Down, Volume Up candles are Bearish at the beginning of a selloff and Bullish if the selloff has lasted for awhile.

    So, are you assessing Friday's candle to be Bullish because you are analyzing it against the selloff that began around Jan 6 (as opposed to the selloff that began on Thursday)?

    One last thing. I think you may have touched on this at one point or another, so I apologize in advance for not recalling: out of all of your many indicators, which ones are the most accurate?

    Thank you in advance for your help.

  12. You're right, I think I interpreted wrong about Russell 3000 Dominant Price-Volume relationships. Friday's price down volume up was a bearish sign.

    As for indicators, there're no perfect one. I personally like NYSI for intermediate-term and NYADV for short-term.

  13. what is a firework?



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