Live Update

Tuesday, May 12, 2009

05/12/2009 Market Recap: No Selling Pressure

  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 According to $NYA50R, market might be topped.
Short-term Up Neutral  
Report Focused On Buyable dip or the market topped?
Today’s Summary

Another day of orderly retreat, expect a rebound tomorrow.

7.1.2 NYSE - TICK (30 min), still no –1,000 TICK readings today, this tells me that there’s no urgency of selling, therefore it’s a pullback not the start of a down leg. But because in chart 1.0.2 S&P 500 SPDRs (SPY 60 min), there’re still 6 unfilled gaps, so be careful buying dip especially if tomorrow we have another gap up open as I still doubt whether this 7th gap could be held or not.

TICK30min SPY60min

Tomorrow, I have 2 reasons to expect a green close:

7.0.7 SPX and VIX Divergence Watch, both SPX and VIX dropped today, this happened 5 times recently, the next day all closed in green.

SPXvsVIX has a short-term trading model which is extremely oversold today. The oversold of this model, by the way, not work well on a downtrend, so pay attention to how strong the rebound is tomorrow, this will give us a very good clue on whether there’re any signs that the trend is changing.



1.0.3 S&P 500 SPDRs (SPY 30 min), I treat this as a low priority. It might be a “Kiss Channel Goodbye” or a “Complex Head and Shoulders Top” in the forming. I’m not sure if bear could bet on them as officially the market is still on an uptrend.


3.4.2 United States Oil Fund, LP (USO 30 min), too many negative divergences, I think oil will pullback.



  1. Cobra,

    NYMO almost crossed the ZERO level today. Anyway it was the first time in this rally that it reached this lower level. How significant is this? Don't you think that it is weakness signal?

    Tks for the nice post, as always!!!!


  2. The first NYMO crossover is more likely a whipsaw.

  3. Can you give your outlook on gold ? Thanks.

  4. Here is an article for your reference:

  5. Cobra,
    I just looked at Rydex small cap, retailing, internet, technology, and banking charts from sentimentrader, and looks like we are getting over the huge tops (they look more like bubbles to me).
    BTW, Rydex precius metals also show we are close to a top.
    When this brakes (a matter of time) there will be quite a sell off before we will get the higher low.
    I guess all the currency printing by Fed went to stock speculation thanks to our taxpayer owned banks and the golden GS traders with inside information. Just like the oil bubble we had a year ago. This will not end well.
    One more thing, I see H&S on yen. Not good for stocks.
    Happy trading to you all!

  6. I meant a reverse H&S,

  7. Jack, from lots of charts from, the market should eventually sell off big, but it seems that even Jason himself doesn't belive all those charts. I think Jason looks this as a major bottom.

  8. Also since fed rate is close to zero, I doubt if the carry trade still applies so the rise of YEN may mean nothing.

  9. Last week felt like euphoria buying in financials. I don't see how it could have gotten anymore bullish, therefore, I don't see how the market can top 930 any time soon. That's obviously not a trade-able idea, but it's my opinion.

  10. Cobra,
    I agree and some of my charts are showing the the feds ignited inflation again and SP 666 was possibly the bottom. However, I will refuse to buy back what I recently sold without a sizable correction. Too much optimism like the above poster noted.

    BTW, there is a lot of new shares selling now from banks, Ford and others to get public funding. I don't see how that cannot supress prices. The small traders are as bullish as possible and bears are all but practicaly wiped out.
    The only enigma is institutional investors, but according to the charts you posted from stocktiming, there is little wiggle room left.

  11. VIX divergence call is a nice pick up. How you come up with this stuff and keep up with all of it is amazing. Lots are calling for oil to pull back and I agree. Supply is just too great and IMO it is being artificially held up. I was thinking channel Kiss as well, but Dan and Kenny are both counting us higher. I'm being patient and keeping powder dry while waiting to exit some longs. Thanks for your great work.

  12. I think the StemMR model idea is ingenious. It looks like it bottomed but Europe and US futures are selling hard this AM. Unless this AM action is a headfake, this may be the turn of sentiment we are looking for!

    Cobra, did I say thank you for your hard work and keeping this forum going?

  13. Wow, this market has my head spinning.

    Is this a buyable dip or has this rally finally petered out? Strong cases can be made either direction--including oil breaking and Santelli saying, "Don't be surprised to see traders move back to Treasuries over the next month". Anecdotal, yes, but there is likely some nugget of truth there.

    Thank you,

  14. is this histogram giving the "finger" or is this a new TA pattern? lol$NYA200R&p=W&yr=3&mn=0&dy=0&id=p68227059561

  15. finally a Tick below a 1000.
    ya gotta love volley ball...

  16. Cobra - my pea brain is going into overdrive - had a thought to expand my EUREKA post given market action today - from my post earlier

    Not willing to call a TOTAL breakdown from this point given my EUREKA post yesterday. Unless the banks need a slightly lower price to get their additional shares out the door they will support it here (or at whatever agreed upon price they want the shares at). $DJUSFN is breaking down, no doubt about that IMO. GS and bank movement may signal some discourse in among the ranks! Is someone going to get left out to dry? In the EUREKA post the first article was about the FDIC planning for a big failure. So maybe we need to figure out who the last one to the share dilution window was and that is our great short opportunity. Why not eliminate the competition? They are a bunch of greedy back stabbers.

    Still working on who's finished and who isn't.

  17. Cobra, Great blog! Thanks for the charts and information. My opinion is that we will revisit the March lows within 30 days and posted several charts. Now is the best time to go 3x inverse.

  18. Thank you guys, just want you to know that I do read your comments and very enjoy them.

    Michael, nice blog you have, I just added your feed, will keep eyes on you.

    Shanky, please please keep me informed about your findings, thanks again!

  19. Michael,

    Doesn't that seem aggressive? The big picture is to get these banks capitalized and executing this will be impossible to do if the markets aren't supported here. All the work to build this uptrend channel won't be going away in 30 days.

    If the markets crash now, all confidence is out the window and it will blow up in the face of this administration.

  20. ADD,
    some think everything the government does, makes matters worse...a CNBC fast trader just said "you can't borrow yourself out of debt, and you can't drink yourself sober.
    Maj Easy



The information contained on this website and from any communication related to the author’s blog and chartbook is for information purposes only. The chart analysis and the market recap do not hold out as providing any financial, legal, investment, or other advice. In addition, no suggestion or advice is offered regarding the nature, profitability, suitability, sustainability of any particular trading practice or investment strategy. The materials on this website do not constitute offer or advice and you should not rely on the information here to make or refrain from making any decision or take or refrain from taking any action. It is up to the visitors to make their own decisions, or to consult with a registered professional financial advisor.

This websites provides third-party websites for your convenience but the author does not endorse, approve, or certify the information on other websites, nor does the author take responsibility for a part or all materials on the third-party websites which are not maintained by the author.