Cobra's Market View

Smart money not extremely short yet so should still be some up rooms.


How I use the chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

1.) When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
2.) When market down, if I see smart money suddenly rises sharply from very negative value, then I know the pullback was over.

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 drops sharply.

don't forget our weekly sentiment poll here: viewtopic.php?f=9&t=2318

Summary of the week's stock picks (used the same list as the last last week so no new post).
viewtopic.php?f=10&t=2306&p=235275#p235275

Update on the January Barometer:
“… As the S&P 500 goes in January, so goes the year.”
86.4% accuracy since 1950
“ …no other month comes close to January in forecasting prowess over the longer term.”
http://jeffhirsch.tumblr.com/post/15536 ... tant-month

Extremes:

The next week's stock picks are here:
viewtopic.php?f=10&t=2320

It is what it is department:
day trading paradise.

Black Gold- What a week. Hard to tell what the press is trying to set the investing public up for. They did mention annual inventory tax in the discussion of the crazy weekly inventory data. What wasn't crystal clear was the 7 million barrel draw was a lack of imports, about a days worth. So a half dozen tankers or so didn't unload. You would expect the opposite after Jan 1 so if it happens will the new bulls get nervous?

Tidbits from around the net that I saw-
Iran sold off it's floating storage last month, 13 super tankers worth of extra oil headed I am guessing for China as that is their major market.
Nigeria cut production but not because they wanted to. The negotiations with the rebels have obviously not gone well so they remain a wild card. Nigerian light sweet oil used to be the only thing you could use to meet EPA's Southern California summer blend requirements.
Did the Saudi's cut production to meet their goal or was it, as the old timers say, because their customers order less in the winter. Saudi production cut story hit the news wire twice in one day three hours apart. According to Zerohedge interpretation of the Bloomberg price chart the algo's couldn't figure out the Wall Street Journal Headline but they did figure out Reuters and instantly bought. If you are trading this stuff please keep that kind of action in mind when you set stops.
All news stories for the upcoming ARAMCO IPO are citing unnamed middle eastern sources so that has to be accurate information, no ?

Finally my favorite piece of conflicted cheerleading reporting was from the Wall Street Journal. After reporting that it is becoming clear the agreed to cuts will not balance supply they went on to quote experts who said the opposite. I did a quick google on the expert. His 13 K for his hedge fund showed the $350,000,000 or so that his firm manages was mostly in shale oil, oil services, mining and a couple of railroads. Hardly an unbiased opinion.

My biased opinion remains that OPEC is continuing to control the narrative. They set it up to guarantee early results, it is later on that it will become hard slogging. So first by eating pastries in Vienna with reporters they succeed in raising prices while increasing production into an oversupplied market. Now, when they just about always drop production they drop production but the entire narrative has changed because of the way they framed it. Instead it is that they are following through on the agreement. So those 28 year old history majors running highly leveraged funds we were talking about yesterday should still be feeling positive that they are part of the largest long position (most lopsided) in the history of CL. What could possibly go wrong.

Book Review
Santa left Michael Lewis new book "The Undoing Project". It is a much deeper dive into the source of the ideas that played out in "Money Ball". It is the story of how an Israeli Psychologist received a nobel prize for economics. Lewis shows how two pretty much self educated geniuses found each other and then profoundly changed society without ever meaning to by exploring how people make decisions. Spoiler alert, it isn't by using logic. Anybody who hangs out on this forum should have an understanding of this book because we also struggle to use statistics to control the errors are minds naturally make. I will say considering how hard it was to make "The Big Short" into a movie I do not see this one ever showing up at the local cineplex.

From Amos and Denny's research discussed in the book. "Which is more likely, that a thousand people are killed by floods next year in the USA or that an earthquake in California causes a flood that drowns 1,000 people."

Yes the majority said the second, which is logically wrong, because the statement added context and that is what the brain needs to make decisions.

Anyway this book added insight for me when thinking about the well known fact in trading that your own head is the biggest problem.

Al_Dente wrote:Extremes:

16contrarian.png.png

May I ask where you got this Info from AD?

Thanks...

Other info I see does not agree with this stance.

Weekly and Daily Candles. Both looking bullish.

Industry % Weekly

T2 http://www.worden.com/TeleChartHelp/Con ... rs_T2s.htm

Swing buy/sell pushing up to buy.

T2 Channels % Stocks 1+2 Channels ><200d Weekly ><40d Daily
some divergence.

Yields

Yields v2.0

with bonds crashing, and high odds of EURO's demise.. makes US equities/$USD the cleanest dirtiest shirt.

http://www.zerohedge.com/news/2017-01-0 ... s-warning?

SPX M/W long long term fwiw.

flrtrader wrote:

Al_Dente wrote:Extremes:

16contrarian.png.png

May I ask where you got this Info from AD?

Thanks...

Other info I see does not agree with this stance.

source: zerohedge, friday

It doesn't get any better than TrimTabs as a source for flow info:
"U.S. equity exchange-traded funds issued a record $59.9 billion in December, easily surpassing the previous record of $50.7 billion in November.
“Investor appetite for U.S. equities is seemingly insatiable ... buying volume has been by far the strongest we’ve ever seen.
http://www.zerohedge.com/news/2017-01-0 ... es-warning