Live Update

Wednesday, February 4, 2009

02/04/2009 Market Recap: Follow-through Wanted

Bearish Reversal Day today, not good, but in order to confirm the so called "Bearish Dark Cloud Cover" pattern, a follow-through tomorrow is needed. From the daily chart, no lower low yet and CPCE (the brother of CPC which I've been talking recently) has not yet confirmed the top, so bulls still have hopes - at least a rebound tomorrow morning.


0.0.2 SPY Short-term Trading Signals, bearish Dark Cloud Cover, not good, but no lower low yet and the STO above is on the buy side so unless there's a follow-through tomorrow, the drop today may not mean anything.


1.0.4 S&P 500 SPDRs (SPY 15 min), extremely low ChiOsc readings may mean a rebound. My GUESS is because of the Pennant Pattern (plus AH CSCO bad ER), tomorrow may open low but go high. Reason for go high: As I've been saying, the 3rd time is different.  Feb 2, the market opened low went high, so if tomorrow we get a lower open, because it's only the 2nd time, so very likely the market repeats the Feb 2 intra-day pattern - opened low went high.


2.8.0 CBOE Options Equity Put/Call Ratio, trend line still not broken, so top not confirmed today.


3.4.1 United States Oil Fund, LP (USO Daily), I still think the oil is building a base which could bounce at any time. This is good for the overall market.



  1. I can't understand the wording in your comment on USO. Could you clarify?

  2. USO could bounce so the overall market may not so easily fall.

  3. Hi Cobra,

    Is is true that the market typically bounces the first time it tests the prior low ? (S&P740) Do you believe that the market can fall heavily from these levels ? I do not because : 1) The market has not even gone below 800 despite all the bearish news in the last 10weeks. 2) The selling has to happen from higher levels or else there will be a selling exhaustion like we have been seeing in the last few weeks.

  4. Thank you for the clarification, Cobra

    By the way, if we look solely at the charts, I just don't see any basis for having a strong conviction about market direction either way over the next few months.

    Is somebody seeing something I am not?

  5. Good call Bob and Anonymmous. :-)

  6. Cobra,
    You are doing a great job and your comments are so close to the market reactions. As you mentioned in 1.0.4, the market did open lower and bounce back higher.

    Keep up the good work.



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