Live Update

Tuesday, February 10, 2009

02/10/2009 Market Recap: Overdone

Today's sell off seemed a little overdone to me, so very likely market will rebound at least tomorrow morning. From technical point of view, market still is range bounded, no higher high, no lower low yet, so the top hasn't confirmed and therefor I'm not absolutely sure about intermediate-term direction. One thing is certain though, it is that even the market starts to rally tomorrow, there's not much up room left.



1.0.3 S&P 500 SPDRs (SPY 30 min), TICK way too oversold, ChiOsc way too low, not only this chart but lots of 30 min charts in my chart book have the same problem, that's why I think that today's sell off was overdone, a bounce is very likely at least tomorrow morning.


1.2.0 INDU Leads Market, if the rule still applies, soon or later SPX will have lower low.


2.8.0 CBOE Options Equity Put/Call Ratio, as I said in the commentary area, now we need turn attention to this chart. So far the top is not confirmed, but soon or later the trend line will be broken, this seems inevitable.


2.8.1 CBOE Options Total Put/Call Ratio, normalized CPC at bottom means a top as long as we're still in a bear market. (Refer to chart 8.1.2 Does extremely low CPC lead a market top? for the exceptions in the bull market.)



  1. Cobra,

    May I suggest you use CCI(20) instead of MACD in your $CPCE and $CPC charts for they are more telling....


  2. Hello Cobra,,

    Well my charts were giving me fair signals, then they killed the 4% home mortgages, car credit and the 15000 home purchase credit, this completely dampened my spirits and now i feel there are black clouds on the horizon even with the package... get ready for those spx numbers you thought may unfold in the near term..

    i am prepared to return to the net short positions quickly as i feel it is coming..


  3. Thanks 2cents. I've tried CCI(20), but I didn't see any edge. Would you mind telling me how you use CCI on CPC and CPCE to detect the market top and bottom?

    The MACD I use on CPC and CPCE are not for buy/sell signals. It's called normalizing. Because CPC and CPCE tend to have different extreme values at different time so better use the distance between MA10 and MA200 to detect the market top/bottom. The standard way is to place MA10 and MA200 on the chart, but since MACD(10,200,1) provides better view, so I decided to use MACD(10,200,1).

  4. Mac, thanks for sharing the insights!

  5. Don't know how to post a chart in your comment area, but CCI should identify all tops and bottoms identifiable by CPCE


  6. Cobra,

    Did you find a way to add the CCI 2cents is discussing?

  7. You have a great site sir, I'll tell friends.



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