Live Update

Monday, August 3, 2009

08/03/2009 After Bell Quick Summary

OK, I cannot show my face anymore as it got slapped again that it became too ugly to show. I have a feeling that I’d get another slap tomorrow. But, as I said before, I’ll never challenge any rate above 70% again, so because CPC < 0.8, 77% chances a green close tomorrow. Also since CPC < 0.8, a firework trading setup was triggered today.

CPCWatch Firework

Again tonight I’ll talk about overbought, negative divergences, too many gaps etc etc, which I think nobody believes anymore,  which unfortunately I have to write every day. I still believe we’ll see a little bigger pullback, just it’s not a reason to short. We all know “not to catch a falling knife”, well, picking a top isn’t easy either.


  1. I value your analysis, Cobra, and agree with you that the pull back will happen. However, with the market going up so strong and so crazy, I don't know when it will happen. Perhaps waiting for a moment to drop the knife.:-)


  2. Cobra - You are doing great. No one can predit this market. Guess what? the fix is in till 6th August and then we go down from 1010-1030. How'z that sound for the prediction - don't ask what is the fix and where did I get that info.... LOL... As long as Government Sucks (GS) is pumping the market with 40% quant trading, the market will go up....

  3. no one will slap a great person's face like u. keep going. we all appreciate your work.

  4. crash tomorrow on the 4th ?

    mahendraprophecy dot com/LatestFlash.asp?Pyear=&page=1#year

  5. You've got a baby face so no one dare slapping you my friend.

  6. Cobra,

    I think I have a plausible answer to why we are continuing to defy gravity...

    We know about the evil Goldman Sucks by now. (If you don't?... then you haven't been doing your homework). I'm not to rehash the stories on them again. However, this all relates to them, so let me explain what I'm thinking...

    First: This rally up from 666 has really puzzled a lot of Elliottwave chartists. Yes, they now come up with wave counts, but to me they seem to constantly read incorrectly as to what is expected in the next wave. Have you noticed how many chartists predict that we should have a correction here or there, then a continued move back up to complete some wave? ---> Only for it to FAIL... time and time again?

    Why? Are they are just amateurs? I don't think so. Notice that this rally has been practically straight up, without any real correction? This leads me to believe that the down wave will be hard to predict as well, as it too should have very little retracements back up. (Once it starts, you'll be saying "We are oversold and should bounce up tomorrow"... only to get slapped in the face again. (LOL... I'd never do that to you. I'm getting slapped silly too!).

    Next: All the programmed trading has taken the emotions of the people out of the game. And, since Elliottwave principle is setup on people doing the trading, with 60% of it done with computers, the emotions will be less important... therefore the typical patterns will be flawed.

    Now I'm not saying that those patterns will cease to continue on a longer scale. But, on a short time frame, like the next 2-3 months, I think that they'll be little chance to catch a retracement wave back up.

    Lastly: I think that Goldman Sachs, and all the other "insiders" are already short this market. I think that every retracement back up will be shorted by Goldman Sachs, just like every correction down, (while going up in this rally), was bought up by Goldman.

    I compare this rally to Goldman pushing a snowball up a hill. They know that if they take a rest, and let the snowball fall back down the hill a little, they'll never have enough energy to get it back up to where it was... let alone push it farther up the hill. So, they keep on pushing it up the hill, (while taking crack to stay awake!).

    So, where is the top of the mountain? That's what I want to know? Once it reaches the top, and starts down the other side... well----YOU get picture!

    Dan Black

  7. Dan, thanks for the comments. Why GS push it uphill without any rest? Don't you know that so many people are waiting to buy dips? Just a little bit pullback then the other people will help GS pushing the market uphill. So why don't they do that? Now the sentiment is very bullish, so I don't think a little pullback means it'd never go up again. I think the reason we're going up and up simply because there's too much liquidity around, which companies, institutions dare not put to produce real products because they know people cannot afford them so instead they put them all in the stock market which gets them money real faster! This kind of thing will be broken one day, just bears have to live longer enough for that day.

  8. Friends,

    S&P 1030 is still way too soon to expect anything significant. We may get a couple tiny pullbacks but we won't have a sizable retreat (way more than 50pts) until we reach 1200:

    1. Close above 1000 should trigger program buying by under-invested money managers.
    2. The Newsweek cover is the signal main street needed to start buying and fearing they will miss the rally.
    3. Every other day, the bears continue to try and short and getting caught because they just can't believe this rally.

    Honestly, I almost sold my BGU last Friday in anticipation of a dollar bounce. Glad I remained long for at least another couple days; just keep tightening my stops as more info rolls in.

    If I were smarter, I would've jumped all over TYH. I don't dare short, but the next slight breather between 20-50pts I might jump to cash and switch over to Tech. Maybe at 1200, we'll finally roll over and BGZ will be my baby since Tech should still outperform (drop less) on the way back down.

    Best to all,

    P.S. As a joke, you should just post a big green up arrow with no analysis. :-)

  9. Cobra,

    We did have small pullbacks of 50 points, but no meaningful correction. And the fact that there is some much liquidity around explains why the market won't correct properly. Those retail investors are now buying, but during the rally up it was all that liquidity that Goldman and others had to propping up the market.

    Remember, during the entire rally up, everyone was Bearish. If the market corrected down too far, with that much Bearish sentiment, it would continue down and not rally back up. They were afraid too let it correct because the bears would pound it down further. All the news for the last 5-6 months has really been negative. They would of course spin it in the media and say things like "It's less bad, or the contraction is slowing", etc...

    But, it was still bad! They have too get people positive again, so they will buy into this fake rally. By not letting it correct, people will start to think the worst is really over. Of course it's not, but they have to get retail investor to believe that. I think it's working as I believe the retail buyers are now driving this market up.

    Look at this way... when the rally began everyone was bearish, and no one wanted to buy dips. Instead they were shorting rips. So, Goldman bought the dips. Now, everyone is bullish and wants to buy the dips, while Goldman is selling the rips. The pullbacks will remain small... I do believe.

    Dan Black

  10. This market is really resilient. But I think it's near the top, cos all the news that come out lately is all good. Mr.Greenspan recent comments add to my suspicion. Another thing is Dump money is now 67% confident while smart money is 37%. The higher it goes, the greater will be the fall.
    And Oh , Why are there so many gaps up in this rally ? In my opinion these are cause by professional money like GS. Retail money are not big enough to cause sudden gap up.

  11. What does the "institutional buying/selling" chart look like?

  12. Institutional buying > institutional selling. The last time I posted here:
    Just now the buying increased and the selling decreased a little bit.

  13. This comment has been removed by the author.

  14. Folks,
    When we have a (temporary) bull market, overbought does not really matter. Economy does not really matter. Less-Job Recovery also does not matter. The matter is simply credit and liquidity. With 3 month LIBOR rate at 0.2%-05%....., it worth speculating with leverage, especially there are many ultra long (short) fund or super-ultra fund. I believe the market will rock like hell, many big ups and downs. But for now, it is up.

  15. BTW,

    US$ index pearced the 78 strong support and it is going to 71. Stock market will be up regardless overbought conditions if any.

  16. Cobra,

    The institutional buy didn't seem to be changed from 08/03 to 08/04 and stayed around 7600, though the sell reading was got lowered. Do you know why the reading of 'buy' was the same but the chart didn't reflect that - I assume we should see a flat line...





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