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Monday, March 2, 2009

03/02/2009 Market Recap: Turnaround Tuesday?

According to the weekend market recap, today is counted as day 2, so tomorrow we may see an intraday reversal but it's hard to guess if the market will close in green.  NYADV formed a lower low today, so theoretically SPX should at least have a lower close then today's close ahead.  Furthermore, today is the first Major Distribution Day after the last Tuesday's rebound, because Major Distribution Day seldom appears alone, so there should be one or more Major Distribution Days ahead.  Therefore, if an intraday reversal happens and the market even closes in green tomorrow, it may just be a rebound.


7.0.3 Extreme TICK Readings Watch.  Today TICK closed bellow -1000, so the intraday reversal may appear on the next day based on the past observation.  This in turn agrees with the wild guess in the weekend report.


1.3.7 Russell 3000 Dominant Price-Volume Relationships. 1443 stocks price down volume up, so the market is even more oversold than last Friday when it had 1155 stocks price down volume up.  This is a good news.


0.0.2 SPY Short-term Trading Signals.  Lots of oversold signals.


1.0.3 S&P 500 SPDRs (SPY 30 min).  The accuracy of RSI oversold on the 30-min chart is pretty high.


In summary, it looks like a rebound is due.  However, it might actually be a bad news for bulls, should the market rebounds tomorrow or the day after tomorrow, as it's too easy for bulls, therefore most likely the selling is not over yet.  On the other hand, if sell off continues in the next two days, it could be a climax sell and the bottom may be close.


2.4.2 NYSE - Issues Advancing.  This chart explains why the NYADV lower low today means SPX will have a lower low ahead.


1.0.5 Major Accumulation/Distribution Days.  Major Distribution Day always come in cluster so it's really not a good news to see a Major Distribution Day today.



  1. Cobra,

    Thanks for all the work you do.


  2. Cobra, you are such a subtle observer, it's great to read your blog. Thank you.

  3. I like your analysis, Cobra, but over the past couple of months, I simply haven't seen the predictive value. It seems like it would be helpful if you made for explicit statements about the long-term, intermediate-term and short-term trends. For readers, it comes down to this:

    1. Should I be in the market?

    2. If yes, then in what direction should I be positioned?

    3. What should be the timeframe of my positions (i.e., when should I be looking to close my positions)?

    If your blog would address these items more clearly and explicitly on a daily basis, then your blog would be much more useful.

    Just a humble suggestion.

  4. Hi,
    First of all thanks for the very good technical observation and request as what Anonymous said,
    Could you make it more explicit as to be in the market or to be out please?

    Many thanks
    M Hegde

  5. Anonymous, Papu: you have to make a clear distinction between technical analysis and the art of investing. Cobra is offering great technical analysis. As to the art of investing: read all books you can get hold of. And don't forget to have a look at the long-term chart of the Nikkei: there are easier ways to make money than in a treacherous bear market. This market is only for aficionados.

  6. I think Anon..and Papu are asking too much for this is not a paid site, Cobra is not managing your money for you and I agree with Uempel that TA and investing are two different things, and no offence Cobra you have good ananlyses but they are so whisy-whasy that I would not based on your blog to make any trades....


  7. Hi, guys, thanks for the advises. I'll think about if there's any improvents I can make, I know currently it has no trading value.

    Basically, it's a report not an investment guide (they have different format) and in this bear market you want to short on any overbought. The question is simple, in bull market everyone knows "buying dip", nobody shorts, so why in bear market we don't do the opposite: "selling bounce" and try best not to long?

  8. This is the best discussion I've seen on this blog in a long time.

    uempel: I am very familiar with TA, investing, speculating/trading, etc. There is money to be made in *any* market, provided one is truly directionally agnostic. There is nothing "treacherous" about a bear market. In fact, bear markets can be especially profitable, because fear tends to produces sharper, more rapid movements in equity prices. I believe Cobra is capable of starting to make the leap to providing concise, actionable forecasts that are not tainted by a directional bias.

    2cents: I don't think we are asking too much at all. Cobra is a talented analyst, and he has evolved quite a bit since he launched this blog. Moving to a format that is more geared toward providing concise, *actionable* information is his next logical step. As for money, I started encouraging Cobra late last year to turn his blog into a paid site. However, since the turn of the year, his analyses have become significantly more wishy-washy, which is inconsistent with a for-pay model. I don't know if it is the failure of the rally or what...perhaps Cobra is not well-suited to bear markets. Whatever the situation, Cobra needs to distill his analysis down to explicit expectations over the different time frames. Yes, it will be hit-and-miss for awhile, but it is a necessary step for Cobra's advancement.

    Again, these are all just my humble opinions.

  9. Anonymous: as you very well know, we need a special mindset to make money in a bear market. To stay cool and not panic during rallies, to be confident, even though the media, the blogs and whoever has a different opinion – it isn’t easy. To go short is not the game of someone who is not a seasoned trader and does not yet trust his own abilities. Bear markets are treacherous for someone who picks up ideas, which he does not fully comprehend, and that is why I used the expression 'treacherous'.

    Cobra: I’m happy with your charts and your comments. Your work offers a superb short-term picture of the spx/spy. It is top priority for me to have a clear-cut picture of what the spx is doing, as the spx influences so many other indices and markets (early this morning I went long on a European index).

  10. OK, I've got you guys.

    The format today is a result of a long-term evolution (far long ago before this blog, you should have seen what the earliest report like, could far hardly match that of today's) because of different appetites (believe me, I still get lots of suggestions nowadays). I thought you guys were happy about me trying to predict evey single movement of the market and I did precisely predict evey single movement (except the last "firework" prediction which went wrong, but still the market did attempt a firework). Apparently I was wrong. Now I've got you, thanks. However, I still cannot give trading adivce for now (yes, I do have a plan as my current model is way too complicated, so not now), but perhaps every time when I try to predict a tiny counter-trend movement I should be more precise about my intermediate-term view, this way, I won't confuse anyone.

  11. Cobra: Yes, I think you are correctly interpreting that it would be useful for tiny counter-trend movements to be presented as being in context of a continuing prevailing trend. Sometimes, it can appear that you are calling for a trend reversal.

    All of that said, make no mistake: we are very pleased with your analysis. The only reason I took the time to outline my thoughts and comment on your strengths and weaknesses is because I see a very promising talent evolving and advancing over time. You have enormous potential, and I want you to realize every bit of it. If I come across as prodding you along, that is only because I think you have the ability to develop even faster...and the sooner you advance, the sooner you are able to convert to a paid website model and then devote all of your time to analysis.

    In other words, my motives are part pride in your progress (since I've followed you closely and submitted a lot of comments anonymously over time to encourage your development) and part selfishness (I want you making so much money from this that you can focus on it all the time...which would mean that I could be benefiting from even more of your insight).

  12. Yes, thank you. I knew the problem now. Thanks again!



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