10/04/2014 Weekend Update

[DellGriffith]

[daytradingES]

Hi Cobra,

1. I appreciate you posting the charts. I understand what you are saying.
(The people who understand and appreciate are quiet.)

2. Most people really don't listen - they prefer to argue and forgetting gives them a "straw man" to argue against.
That is since there is nothing incorrect in what you actually said they pretend you said something else and then run with their argument. (Their goal is not to understand and make money but to argue.)

3. There is value in posting something consistently that is each week.

My suggestion is continue to post.
Make a link "How I use this chart" and put the text of your two replies in a FAQ -like you have for other stuff.
That way if someone new comes on they will see your link.
Also if you get someone who forgets you can just reply -- read the link!

Let me explain to you one last time how I use that chart.
I found it works in the following two cases:

the two cases

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or down sharply.


I won't argue with you anymore. I'll from now on post how I use this chart every time I post it. Or I'd consider never ever post this chart anymore.

[daytradingES]

Hi Cobra,

I trade short term. The reason I am here is your post on short-term
I am a day trader and 5 points takes me out - my stop loss.

Many people here are not trading futures. They are stock traders for the long term.
Thet post a lot of stuff that is irrelevant to me for my perspective.
i skip over their posts.

is would be great to have more people understand the
Trading time frame sets the stage
All analysis is only relevant to TIME FRAME.

I trade for 6 point swings.

(This is for the board in general)
Here are the questions I look at:
1. Which is the first point of the day - price and time
2. Will the first leg be up or down?
3. Will the day be:

• trending in one direction,
  flat and range bound,
  or inflection (have a change in direction from up to down or vice versa)

4. Where are the stops?
5. Will the HOD or LOD be first?
6. About what price level are the HOD and LOD and when?

[DellGriffith]

Cobra: I hope everything is ok. Love the site and wish you would continue posting as usual

Bachnut: I enjoy your posts as well. Please continue

[daytradingES]

So from the stuff below you can see how irrelevant a long time frame with last week up etc is.
As a day trader I only care about today and really just
where will it be in 15 minutes

Where is it on multiweek time frames is not interesting.
So as you mention a 2% change = 39 points at 1960 isn't the key

0.003% or 6 points is what I am looking at and the chart shows how quickly this happens.

So anyways Cobra keep up the good work stay with ST and know there are many "quiet" people watching with interest.!

[daytradingES]

By the way, the above is only as an example.
Usually I edit the auto high and low but I only had 4 hours sleep and didn't change them in the example

I'm still struggling to get to bed early enough.! LOL
It's really just a post to let Cobra know we short term traders appreciate you keeping it short term and getting out there and making the calls.

[DellGriffith]

So from the stuff below you can see how irrelevant a long time frame with last week up etc is.
As a day trader I only care about today and really just
where will it be in 15 minutes

I do some trading on an hourly time frame but but the signals arrive and last for a few minutes and by the time I decide if I want to make a move and then get an order in, the information would be useless to post here because its too late.

[daytradingES]

So from the stuff below you can see how irrelevant a long time frame with last week up etc is.
As a day trader I only care about today and really just
where will it be in 15 minutes

I do some trading on an hourly time frame but but the signals arrive and last for a few minutes and by the time I decide if I want to make a move and then get an order in, the information would be useless to post here because its too late.

Sounds good.
I know exactly what you mean,
(who knows maybe when I get my sleep under control we can work a deal (real-time )

though the signals I posted were done before the opening - I would usually update things as the day progresses - but as you say its a scramble just to get the analysis done and the trade in...!

I was really posting not to show I have it under control = which I don't - but to grind in that not all of us are looking out two weeks or two months and to support Cobra's valid point about time frame and that this is a day trading thread.

[Cobra]

Thanks. I'll keep posting what I think is right. Of course I'm not always right, otherwise I'd be the richest man in the world already.

For the Smart Money chart, I think the argument here does help actually as I use the chart in an unique way, so I do need explain every time how I use the chart, therefore I'll explain every time I post it, the problem is solved.

Via reply to your comment, I also thanks for other comments supporting me too. Nothing will be changed, I'll post whatever I think is right. Everyone feel free to disagree with me and I'm really glad to hear the reasoning, just please don't use the tone that may make newcomers think that I'm always wrong and has been wrong for long long time which I really am not. I really find very hard to tolerate such a tone.

Hi Cobra,

1. I appreciate you posting the charts. I understand what you are saying.
(The people who understand and appreciate are quiet.)

2. Most people really don't listen - they prefer to argue and forgetting gives them a "straw man" to argue against.
That is since there is nothing incorrect in what you actually said they pretend you said something else and then run with their argument. (Their goal is not to understand and make money but to argue.)

3. There is value in posting something consistently that is each week.

My suggestion is continue to post.
Make a link "How I use this chart" and put the text of your two replies in a FAQ -like you have for other stuff.
That way if someone new comes on they will see your link.
Also if you get someone who forgets you can just reply -- read the link!

Let me explain to you one last time how I use that chart.
I found it works in the following two cases:

the two cases

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or down sharply.


I won't argue with you anymore. I'll from now on post how I use this chart every time I post it. Or I'd consider never ever post this chart anymore.

[Cobra]

Thanks for everyone supporting me here. Nothing will be changed, I'll post whatever I think is right. Everyone feel free to disagree with me and I'm really glad to hear the reasoning, just please don't use the tone that may make newcomers think that I'm always wrong and has been wrong for long long time which I really am not. I really find very hard to tolerate such a tone.

[louie]

Thanks for everyone supporting me here. Nothing will be changed, I'll post whatever I think is right. Everyone feel free to disagree with me and I'm really glad to hear the reasoning, just please don't use the tone that may make newcomers think that I'm always wrong and has been wrong for long long time which I really am not. I really find very hard to tolerate such a tone.

Cobra, I normally just "lurk" without even logging in. I read most post, charts, etc. Many are beneficial to my method of day /swing trading. But above all else, I pay VERY close attention to your posts. Friday at the open you posted s/p chart and said: "they are targeting blue line?" To me, that question mark meant: not sure, but it's likely. I immediately went long and watched in amazement as price went straight to that blue line then started pulling back a little before continuing to work its way higher. All the time I was looking at my charts trying to figure out where you got that blue line. I distinctly remember thinking: how does Cobra do this? I have no idea. WHAT I DO KNOW IS THAT YOU ARE VERY SELDOM WRONG!

Please don't change a thing!

[pezhead9000]

Economic Summary :
Among the long leading indicators, corporate bond yields improved, and money supply, bank lending rates, and real estate loans remain quite positive. Mortgage applications returned to being "less bad" this week, although they remain near post-recession lows. Home sales were also less negative.

The short leading indicators were generally positive, with one big exception. Jobless claims fell and the 4 week average is near its post-recession low. Credit spreads have recently widened, but are still near their post-recession low. Temporary jobs are strongly positive. The Oil choke collar has seasonally disengaged, and may be pointing to a new 3 year low. Housing prices are still mildly positive. The exception is commodity prices, indicating a falloff in global demand.

The coincident indicators were mixed. Consumer spending was positive, but Gallup was once again weak. Rail traffic was only slightly positive YoY. If we had a good seasonal adjustment for rail traffic, it would almost certainly have turned negative. Steel production also turned negative. Shipping was mixed. On the other hand, tax withholding for September was positive.

In the last 3 weeks, the high frequency indicators, while still positive, have decelerated sharply from the summer months. Outside of the jobs report, most of the monthly data was also in retreat. The bright spot is the continuing decline in Oil prices. As I said last week, I suspect the weakness in the long leading indicators at the end of last year (housing!) is feeding through into some deceleration in the economy now, although I still see growth, and a GDP print of over 3% for the 3rd quarter would not be a surprise.

http://community.xe.com/blog/xe-market- ... on-edition

[fehro]

Surging dollar may be triple whammy for U.S. earnings

...For companies in the benchmark S&P 500, that's a big headwind because so many are multinationals, and as a group they derive almost half of their revenue from international markets….
...And while investors and analysts have begun to figure in the negative effects of a fast-strengthening dollar with regard to the approaching third-quarter reporting period, the risk to the fourth quarter and 2015 remains largely unaccounted for.

For instance, third-quarter profit-growth expectations for S&P 500 companies have fallen back to 6.4 percent from about 11 percent two months ago, Thomson Reuters data showed….
http://finance.yahoo.com/news/surging-d ... 0.html?l=1

[fehro]

The bright spot is the continuing decline in Oil prices.

As long as you have USD.

[fehro]

Sorry have to post this image… it made me laugh! http://money.cnn.com/2014/10/05/investi ... Markets%29

[Al_Dente]

The international art/antiques market has been signaling weakness
It’s one measure of contraction when rich folks stop using their discretionary funds for buying art at nosebleed levels
Weekly, long-term macro view, currently testing trendline support

[taggard]

Hi Cobra,

I trade short term. The reason I am here is your post on short-term
I am a day trader and 5 points takes me out - my stop loss.

(This is for the board in general)
Here are the questions I look at:
1. Which is the first point of the day - price and time
2. Will the first leg be up or down?
3. Will the day be: trend or range--or inflection (so major direction change)
4. Where are the stops?
5. Will the HOD or LOD be first?
6. About what price level are the HOD and LOD and when?

this is much much closer to how i trade short term--notice no indicators. Also "where are the stops" is a very good thing to think about. this means when do they have to take action. buying forced moves is the best way to get a solid move.

a really key idea here is this--often you will get periods of action where "stuff makes no sense" on ad information in whatever form people use it. understanding "where are the stops" so what is going on in the futures and options markets esp--as well as etf stock--will "explain" this action. focusing on breadth when you have a slow market with stops getting hit day after day is an exercise in agony. same idea with slow selling.

many traders try to find "solid moves" using confluences of indicators and Ad and volume--but while these do work--they also don't work a lot. knowing where the stops are and when people will change their minds is a worthwhile skill. and you can in part--use posts here and other places to slowly learn this. For example--on a sharp up or down move you will find posts saying (for example on down move) "yo dude this all has to retest the bottom or whatever" if the move continues you will usually get another post saying something to the general effect of "yo dude 50-62% of the last move down we get faded i am going short". then if the move continues you will get the inevitable "yo dudes we blow through the last high". clearly their stops got hit after the second post. remember most people tend to talk their own book.

This skill of watching stops and flow--comes more naturally after a while. i personally don't think you need to be too anal retentive about exact points--you will see them when they are hit. it's always hard to explain what this idea of sung (or relaxed yet alert) means because the whole idea seems to be to watch exact numbers. failing to relax often means tunnel vision esp for newbies--but also for pros. so yes you are watching various action--but please don't grip the handlebars too tight. it's hard to be flexible and fluid and react quickly if you are too tense (and it's not healthy see my last post last week)

if you are interested in developing this skill you can do it cheaply and gradually.

1. step one continue to tread using your usual indicators ad and volume.
2. paper trade the logical stops
3. watch for opening (frequently) or mid day (happens) moves over (a) what cobra calls measured moves. if the move fails to hit the measured move that is a really key sign of lack of trend strength--and very easy for anyone to see. if the move exceeds measured moves--again easy to see and clearly tells you more trend strength.
(b) you can use fibs and the same logic--if it exceeds the fib line that "makes sense" that is a clue stops are getting hit to one degree or another.
(c) trend lines also fit this

if you are looking for the meta pattern to this learning it's simple--don't take offense--but look to fade the typical trading of the anal technical trader.

try to appreciate that we are not back in the good old days--but now everyone and his mother uses technical trading. that means you want to both use it and be meta (so the next level of logic over it which includes all lower levels of logic or technical trading). this is how you evolve beyond simple chart reading--you start to see intentions--the charts sort of come alive. a hand reaches out of your screen and grabs you by the neck--and shakes you. rather than a sort of quite boring grind.

Never diss the idea of fading yourself. i am 60 and have managed to make mistakes my whole life--forgive my pride but i like to think in larger size and number than many. (size matters) to evolve you must do something different. to do something different often means to do the inverse of what you are doing. hint? ok making tiny changes is harder to learn from as the results are so muted. making larger changes is easier to learn from. do it first on paper means you get a sense of it for free--you can then add stress. . er position size and verify in stages the idea is correct.

but a good starting point to many of daytradingES points above is to start asking "where do they have to do something". at first for beginners this is tough--but use other posts (if you are reading them) and look at logical points. and then slowly start thinking "what do they have to do" in reference to these. again boring as it seems--keeping crystal clear records of both your normal and "inverse" trades will teach you lots. and keep your ego in check. you are letting something else "tell you what to do" which is in fact the major difference between great trading and good trading.

finally i tout the idea of sticking or being into the action in and of itself. this often sounds impossible or not clear to other traders. this idea of "where they have to move" or "where are the stops" is a really nice semi finite place to start.

other minor point--on sleeping you must realize this is very important and there are tons of studies proving it. usually the first thing i ask is what was my hard physical training like (so weights running etc) almost always sleep comes fairly easily if there is enough of this. the second is what is my overall stress level--if it's high--i either resolve the problem (rarely) or think beyond it (i am going to die someday and rot in relation to that is this issue of any real importance (rarely is). finally if it is another person or group (so family is sick or something) i bail that using the old airplane rap of "if the oxygen masks drop--parents put yours on first as you need to be there for your kids and a few seconds is no problem for them--if you pass out and they fail to get the mask on then major problem". so go lift weights and sleep because i need to be there for whoever. needless to say watch caffeine/blood sugar/and car chase movies late at night.

a really easy place to start on sleep and stress--is watch what part of the month day hour etc you do the best trading--and limit your time. i don't like to trade more than 3 days in a row--it took years to accept this. and the rule can get broken to some degree if i am in a multiple day trade. But honest--i make more money trading less. i am not saying you are like this--but it wouldn't hurt to examine your records and see (1) are winning trades generally at a certain time or shape? (2) are losing trades at a certain time or shape? (3) beyond this are your posts or your thinking at home--patterned. so are you more fluid at this or that time--happier or more relaxed? if so should you take advantage of this or somehow change it so that the optimal situation shifts?

bottom line? respect your body and mind--listen to them--and then listen to everything else.

good luck with your trading and have a good week

[taggard]

slightly more clear--example says "on down move" really i am talking about start and then move up--after down move. so they are assuming it will continue whatever direction it is going--then are proven wrong in degrees--sorry about that

[nghemua77]

Hi Cobra,

I've rarely posted but I definitely read your posts each day and I vote for you each day. I was in the Philippines recently and saw these sodas in a store in Manila and I just knew I had to take this picture and post it for you! You are probably one of the smartest stock market people in the world and I totally respect you and appreciate all that you do for us.

I really like your blog. You've been a big help for me and many of your posters have been a big help for me as well. Thank you for all that you've done and I hope you like the picture.

[Mr. BachNut]

OK... I couldn't exactly go cold turkey on Cobra...

Not exactly a trading chart, but something to keep in back of mind.
SOme time ago uempel posted a study of coppock curve channels to discern major market turns (bull to bear market).
I really liked that study and have been following this indicator since.
This study is similar but looks at double top patterns in the coppock curve.

The coppock is a slow moving monthly momentum indicator.
It's design use is actually to find bottoms (bear to bull market turn), but it seems like it can have some use for gauging tops.

To me, the message of the current chart is that the bull market still has some go.
However, folks should be prepping for a notable correction (bigger than this latest move) or two in the months ahead before the final highs are in.
One can also come to a view that a bear market may be in the cards to start next year barring a central banker stick save.
We'll see what happens.