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Thursday, April 16, 2009

04/16/2009 Market Recap: No Title

  Trend Momentum Comments - Sample for using the trend table. Warning: This is NOT a trading recommendation!
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought Beware of $NYA50R which usually means a top
Short-term Up Neutral to overbought* May need take profit if further up tomorrow
Report Focused On Buyable dip or the market topped?
Today’s Summary CPC < 0.8, 64% chances the market will close in green tomorrow.
Too many negative divergences, at least don’t chase high here.

Nothing new today, just too many negative divergences, so I still expect to see a decent pullback soon.  Because CPC is below 0.8, according to 7.0.4 Extreme CPC Readings Watch, 64% chances the market will close in green tomorrow.  However, the market is a little bit overbought in the short term, so it’s prudent to take profit if the market does go up tomorrow.


7.3.2 Firework Trading Setup.  The firework has been going on for two days.  For your reminder, two conditions can terminate this setup: 1% or greater gap down open, or CPC < 0.7.  The criteria for taking profit is the overbought of NYADV.  Now the profit taking criteria is met, although in the past NYADV could stay at overbought for several days, but I don’t think it could still do so now, so again, take profit if the market goes up tomorrow.


1.0.2 S&P 500 SPDRs (SPY 60 min).  This is my major concern, bearish rising wedge plus lots of negative divergences.  The way to correct this is either big rally or big sell off.  Since the market is extremely overbought over the intermediate term, a big rally for correcting all those technical bearish signs is rather unlikely in my opinion.


1.0.4 S&P 500 SPDRs (SPY 15 min).  Here is one more bearish rising wedge in a very short-term.  I don’t mean the market should drop right away though, just for your references.



Intermediate term there are lots of negative signs, although they cannot tell us exactly when the market will be topped, but from TA terminology, risk vs reward now favors the risk side.  Therefore the suggestion is not to chase high here before a pullback.

0.0.3 SPX Intermediate-term Trading Signals, 1.1.4 Nasdaq 100 Index Intermediate-term Trading Signals, overbought plus lots of negative divergences.


SPX Breadth from  Note the negative divergences. The number of stocks close above MA50 at the very bottom is equivalent to NYA50R, which I’ve been mentioning, usually is a sign of a market top.


Indicators at extremes from  I mentioned this chart in the weekend report, for all the indicators provided by, bearish signals are way more than bullish signals and the spread between them has reached an extreme which in the past always was a market top.



  1. Cobra,

    A couple of days ago, some folks at Stocktock suggested to use some ratios with in order to have a better idea about the market, like:
    $NYA50R:$CPC or $BPSPX:$VIX:

    Do you have any suggestion?



  2. I can't believe that we have not broken down from the rising wedge as shown on the S&P 60min chart. There really is not much room to move from here without the index either breaking down or breaking out to the upside.

  3. There are too many young bears playing around:

    An intriguing aspect of today's market is that half the world is shorting the spx at 875, with a stop at 880. Isn't that an attractive setup for an aggressive bull raid? A good bounce today or Monday is quite realistic. Shorting the market from either 910 or 930 down to 870 might be a more appropriate strategy.

  4. I agree
    The market has sold off quite a lot in a short period of time
    Divergences which were quite important happened at the 666 low.
    Stock Prices.

  5. explain to me where the bears got positions at 875? These "young bears" managed to get in at a Top, and didn't get out at a bottom?

    I predict cobra will say "May need take profit if further up tomorrow"

    for the 10th time tomorrow.

  6. Oops, I just found that I've been saying to take profits almost everyday. :-(

    I have no idea why $NYA50R:$CPC and $BPSPX:$VIX.

    Relative strength does work amazingly. Just I don't understand the logic behind, say, $NYA50:$CPC. If you say XLY:XLP or XLE:SPY then they make sense to me. I'll try these ratio anyway, will see if I could find anything, thanks.

  7. Anonymous 6:49 AM:

    All these blogs, both the good ones (like Cobra's) and the bad ones (many of them), tend to have a dangerous side-effect: groupthink. The (young) bloggers read eachother's blogs and forget that the (old) big players have an entirely different agenda. The big players do not necessarily follow the common technical indicators.

    The wake-up call for every careful trader was a roundtable discussion reported in Barron's end of February: some very big players revealed that they had covered their shorts and were going long.

    Victor Niederhoffer verbalizes it like this: be patient and wait until your oppenent (the market) makes a mistake. And then you pounce and execute your plan. In other words: be proactive and not reactive.

    The market made a big mistake down at 666 and it will make many small mistakes along its way to its next big mistake. Your call.

  8. Got meself some shorts on SDS and FAZ...

  9. Nice work.

    SPX - Relax. See the big picture

    This week I will begin by leaving some notes on the monthly chart and then move to the shorter time frame.
    This moving average has been a reference in the last 10 years.
    Who do you think we are in bull market, there is one more example that this movement is part of a movement still in bear market.
    It will be much the examples that I will leave that much on this subject has been questioned by most traders.
    815.28 is an important value, make the low closing in 2002. A value to watch for the end of the month. The next move should expect a corrective option 1 or 2.
    Better than the words the graphs speak for themselves.
    Big trades. Leave your comments it is important to this blog.



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