Live Update

Thursday, May 14, 2009


OK, Dan Black posted an interesting comment for my report today about similarities. The link is here: For your convenience, I’ve attached the 2 charts bellow:

1 2

Interestingly, I have another similarity analysis today from John Murphy’s Market Message (written by Arthur Hill), because of the copyright law, I cannot post the entire report here, but I think the following 3 charts are enough.

20090514005-sc 20090514006-sc 20090514007-sc


  1. scary close almost....the comparision charts...

  2. As for similarities look here as well :

  3. That StockTock Schweizer guy (S135) is obviously brilliant and may have discovered something highly significant!

    I need to go make love to myself now.

  4. I can't see how Murphy thinks this is the bottom given the Monthly MACD is still very negative. Sad.

    As for my charts, in 2001 the May high was the top of wave 2. This time many are calling the March-May move as a "P2." I am not a big fan of waves as they are far less clear to me than traditional TA and indicators, but given the continued economic deterioration, the market still is being drawn to find equilibrium between price, earnings, and dividend yield, and that is not north of here! To simplify the thought, Bear market bottoms occur when the PE x Dividend yield is under 60 or so. Right now it is 62 x 3 = 186 or so, so 3 times overpriced.

    Intervention and money printing may smooth out the panic, but the market and the economy will find this equilibrium point eventually.

  5. Schweizer, it's always tricky if you mix TA with fundamentals. The market can neglect fundamentals for many, many years. As Keynes said, the market can stay irrational longer than you can stay solvent. And not only John Murphy believes that the market might have bottomed out for the next months/years, so do other eminent technicians whose work has proven to be quite reliable these last 12 years... One of them is also a "Schweizer": Rolf Bertschi.

  6. Hello Uempel,

    Appreciated your post on Gann and Time cycle:

    Question: Do you have a site or a blog,..any board (other than Cobra's) that you post at regularly? Thanks in advance, Regards, Jim P.

  7. Schweizer, I like your Monthly MACD chart, I believe it's true: A positive divergence must be formed first before the market turns.

  8. The reson the current market action is similar to spring 2001 is very simple: market psychology of bear rallies. There is some positive signal that trigers short covering and that snowballs as early hopefull bulls and momentum traders jump on board. Then as all possible buyers are on boad, net selling creeps up from smart money leaving dumb money holding the bags.
    Now, the macroeconomic situation is different from 2001 and more akin to 2002-2003 or 1974-1975. Meaning that inflationary forces started to overwelm asset deflation and inflation will be floating all the boats (some more than others). This is why I vote for the John Murphy's chart anology to 2003. Heck, I don't have a blog but came to the exactly same conclusions many weeks ago just by studing charts and market sentiments.
    May 2008 was a good analogy to spring 2001. Now, were are close to a temporary recovery caused by money reflation within a seculat bear market 2000-2012? (at least). The march low needs to retested though, just like in 2003. Long term, US stock markets will not do well and we will have SP ~1000 glass ceiling for many years to come (just like Dow 1000 throughout all 1970's). Good traders will make heaps of money though. The thing is, 85% of traders loose money and 15% make money.

  9. One more thing.
    Schweizer, the nominal earnings will go up even in a secular depression, if inflation rate is kept high enough. Remember what happened in Zimbabwe lately, stock market exploded up just trying to keep up with infaltion. Weimer episode is aslo good one to study.
    Cobra, thanks for posting this AM,

  10. Cobra, I am beginning to question your sanity. That fact that anyone would entertain an idea from S135 is just plain nuts. That guy is a nut case. LOL Just kidding.

    How bout S135 getting a shout out from Cobra! (and compared with the great Arthur hill no less) That's Huge! We'll never hear the end of it. He's probably still getting it on with himself. I guess I should have "promoted" your link to this I posted yesterday from the comments section to the blog post.

    I tried the Arthur Hill free membership trial a few months back. He does pretty good stuff. A little basic, but when you cover 30+ charts I guess you have to simplify things. I would recommend it to people new to TA or that want a solid opinion on the market with lots of good ideas. Here is a link to Arthur's site.

    Thanks Cobra. Nice work as always.

    Disclaimer: S135 is a very sick individual almost a deranged as I am. LOL.

  11. I was going to do a big long post,but I'll simplify it. (Ha - this is simplified)

    Cobra/S135, to further the argument (and sorry if you have noted this already), look at the 100/200ma crossings in the last two huge moves on the monthly chart. Each time they mark about the halfway point of the cycle. Esp look at the bubble burst and compare it to the chart you had with the 1-5 waves labeled. The 100/200 is crossing RIGHT NOW in this cycle. Halfway point? also notice the 20/50ma crossings in the past they are a lagging indicator but a confirming one as well. They are not even close. All that said, nothing is the same, but they are good signals to watch.

    NOW, also the MACD cross and the RSI +/- 50 on the monthly have been good indicators as well, so I'll be watching the MA's in conjunction with the indicators mentioned on my $$ M SPX - Monthly chart in my chartbook.

    Now for another view - the WEEKLY RSI and MACD did NOT cross their trendlines the whole way down in the bubble burst. Not once. They have blown out the trendlines on this run up. This can be seen on my $$ J SPX - THE BIG PICTURE chart.

    Now the kicker - this is a financial crash and not a bloated P/E tech crash. This crash is much more grounded in the roots of everyone's pocket book. This is some serious shit and not just a bubble burst. This is continuing to take the excess out of the market that was not removed last time.

    So, what the heck is going on? Is it similar or is it different? History can repeat its self, but not likely. Comparisons are good but not guaranteed. Trust the charts and what they are saying. I'm on board for a bigger turn here, but how deep is yet to be determined.


  12. Schweizer,

    I'm LMAO now thinking about how you could make love to yourself! Pictures please... I need more funny things to look at in my life.

    Anyway, back on the current debate going on... "Up or Down in August", I do have to give some creedence to Arthur Hill's prediction. With all the new trillions of dollar being put into the marketplace, it could cause a huge rally up?

    Remember, Obama has put more money, (or will put soon), into circulation in his first 90 days then all the presidents before him, from George Washington to George Bush. That will eventually cause massive inflation. But, when is the question?

    So, in real terms, the market could go up, but each dollar would be worth less, which would mean that the market actually went down. Confusing... yes! So, even though I believe it will go down, I won't under estimate the effect that much money on the sidelines could have.

    Dan Black

  13. Hi Jim,

    thanks for your interest. I’m a chart aficionado, but I don’t have the time to write a blog. I spend 3 hours a day reading and checking charts, in addition I have a job that is not directly related to the financial markets.

    My only message: Trade only when your favourite indicators show that price is about to change direction.

    Most of the time I’m out of the market. I only buy or sell an index or an equity when I’m absolutely convinced that the market is making a mistake and the charts support my opinion. Then I go long or short on an index future, or when a whole sector is out of favour, I buy the best pieces. Remember where the prices of banks such as GS and UBS were two months ago?

    And of course I exit immediately if the market suggests that my trade might be wrong. But my ratio of good calls versus bad calls is quite good, because I only do few trades.

    Last but not least: It’s hard work. I guess Cobra spends more than 30 hours a week doing his charts and his reading, I do a bit less, because I don't have to write a blog...

    Good luck Jim.



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