Live Update

Thursday, May 28, 2009

05/28/2009 Market Recap: Firework


62% chances the SPX will close in green tomorrow.

Firework trading setup was triggered.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Down Neutral Wait breakdown bellow SPX 878 to confirm sell signals.
Short-term Up Neutral  

Not much to say today. Ever after May the 1st, there’s no record for SPY being up 2 days in a row, so tomorrow will be the SPY’s last chance to break this curse. Will SPY be able to do so? Because CPC closed bellow 0.8 today, so according to 7.0.4 Extreme CPC Readings Watch, there’re 62% chances that SPY may close in green tomorrow.


 7.3.2 Firework Trading Setup, CPC < 0.8 also triggered a “Firework” today. This setup worked pretty good so far.



  1. Based on Cobra's analysis (or lack there of), I would guess he's becoming more bullish as well. lol.

    No offense, Cobra. Your effort is greatly appreciated as you know.

    Best to all,

  2. Actually, the SPY goes nowhere in May. It's still a range bounded market, so doesn't matter bullish or bearish, so far buy dip and sell bounce worked very well. Actually I'm really wondering, since SPY goes nowhere, why people feel so bullish while bears feel so frustrated?

  3. I agree with Cobra. When the market hasn't made a new high in almost a month, that doesn't seem very bullish. It seems like a lot of people clinging to hope -- what that hope is based on, I don't know. The market still has not lost its "buy dips" mentality and it will take something to modify behavior. They need a catalyst to strike fear, and although there are plenty of problems and data points that SHOULD strike fear, people love equities for some reason, which I think has little to do with the quality of the asset class and more to do with other factors.

    I think tomorrow will close green, but it won't be a blow out +200 day. More like a +50 kind of day. The XLF:SPY is goint to hit resistance at 200 day MA, so upside is very limited.

  4. I see a rounding top... bulls have lost steam and bears are slowly gaining control.

    If SPY can not go above 92 tomorrow I will go short.... I have been in the sidelines except for commodities.

  5. I think govt is helping equities tread water, so there is a lot of bad news, but the govt keeps throwing in buckets to balance things. No where to go but sideways.

  6. I posted this on another blog but thought Cobra would like to hear this:

    I googled for "mortgage rate spike" and the search returned various stories dated 10/18/2008, 6/14/2007, 2/20/2008, 1/17/2007, 7/24/2008, and 5/28/2009 (just from the first page, too tired to look for more). While the timing was not perfect, those were not bad times to walk away from risky investments. We don't know about 5/28/09 yet, of course.


  7. Jack, thanks, that's really very interesting findings.

  8. the FED has two options...1. Allow the dollar to continue its slide. The will decrease the real value of debt (good for debt holders), however this will have foreign bond holders looking for higher yields increasing mortgage rates (bad for housing market). Net result increase in stock market bad for treasury holders. 2. Allow the dollar to increase. Increase the real value of assets and debt causing deflationary pressures on the economy. (very bad) Tank the stock market however, increase bond prices (lower yields) and lower mortgage rates. Net result..lots of short term pain but I think better of the economy int he long run.

    I believe that the latter will happen since its better for the economy on a global scale.

    my two cents.

  9. Cobra, can you please post the institutional chart daily? It would be much appreciated. I am curious on what really happened the last few minutes there today.

  10. Lots of mortgage traders hang out on and Their comments about mbs spreads can be enlightening at times.

    This week looked like it was just end of month window dressing. Any thoughts on the first week of June?

  11. PrincePersia, I'll try to post the chart a little bit frequently, but I cannot post it everyday as might not be happy about that. Also you can only see the most updated chart before the market opens.

    In Debt We Trust, the first week of June is statistically bullish.

  12. COBRA:
    When measuring Market Breadth with $NYADV:$NYDEC, do you have a HL range for it? What do you suggest the HL range for $VIX:$VXV on a 60-minute SPY? 30-minute SPY? and 10-minute SPY? For daily, you have posted HL(1.1, 0.9). Is their a Financial VIX?


  13. Hi, Blowtorch Billy,

    I don't have HL range for NYADV:NYDEC.

    And I also don't have HL range for VIX:VXV on 60/30/10 chart. The HL(1.1,0.9) was a blogger called VIX and More's idea.

    There's no Finanical VIX but some paid service provide info for the stocks/ETF's IV. You can also find these kind of info from VIX and More (

    Best regards!



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