12/15/2012 Weekend Update

[Cobra]

Begin with Algo from stocktiming.

Last weekend update, I said a negative divergence is needed before a drop is possible. Now we got the divergence, it's still overbought, so guess we'll see more down ahead.

[Cobra]

both AAII and II become more bullish.

[Cobra]

Only NYAD shows bullishness all the other stuff are bearish. I don't understand this.

[Cobra]

China may have more up ahead.

[oldpigwang]

But the institution selling down, support trend up.
This is good.

[Royal Flush]

Only NYAD shows bullishness all the other stuff are bearish. I don't understand this.

Thanks for posting the great charts Cobra. Below, note the fractal similarity of the recent VIX to that of spring & summer 2011. The long down trend of the VIX has been beneficial for the XIV. Now that the bear trend line has been broken and back tested the bear market in the VIX is probably over. There is a possibility it could make a lower low however remote it is.

[Royal Flush]

I know of very few traders who can use EW to trade with profitably. I do know that markets exhibit a tendency to retrace a percentage which is reflective of the strength of the trend. for example; a weak trend >=76.4% Ret., normal trend 61.8% Ret., strong trend 50% Ret. and very strong trend <=38.2% Ret.

Yesterday exhibited the Spring in the Globex session and Coil in the RTH session. The 5" chart below exhibits the increasing and diminshing stair step short entry price action. This retracement behaviour is frequently exhibited in trends.

In the chart below retracements in chronological order were; 61.85, 76.4%, 76.4%, 87.5%, 100% & 61.8%. Rather than trying to predict the percentage retracement shorts entries were better predicted by the stair step action.

[Royal Flush]

However, the last 4 swing retracements on the ES were all between 50% and 67%. Unlike Friday's day trading the swing stair steps are not regular and give no reliable prediction of an impending inflection point.

[Cobra]

Guys, more vote please, I'm fell into number 2 now, thanks. https://stockcharts.com/public/1684859

[Al_Dente]

“There Go Apple's Margins: iPhone 5 To Sell At Wal-Mart For A Third Off Original Price”
http://www.zerohedge.com/news/2012-12-1 ... inal-price

[Al_Dente]

PAGING KEIZAI
“total dislocation”
http://www.zerohedge.com/news/2012-12-1 ... l-outflows

[Al_Dente]

NYSE Short Interest Report
http://online.wsj.com/mdc/public/page/2 ... tml#shortD

a few notes:
the shorts loaded up on TWM instead of TZA
the 270% increase in VEU shorts (all world ex-US) hasn’t been kind yet to bears; they were squeezed
JNK junk bonds were heavily shorted, last period the shorts covered 6.2 million shares, as JNK squeezed to new highs
there are 6.8 million fewer shares short in SPY this period; those 6.8 million shares covered
etc

[Al_Dente]

http://www.youtube.com/watch?v=fYi9Vr8b ... ure=fvwrel

[Cobra]

I think the divergence between VIX and SPX is enough to mean something: https://stockcharts.com/public/1684859/ ... /258792096;

[rusrod]

Guys, more vote please, I'm fell into number 2 now, thanks. https://stockcharts.com/public/1684859

Cobra, I was surprised to see this yesterday.

I just want to say that my subscription to your services was THE best investment decision that I've ever made and I religiously read everything that you post.

Thanks for all of the hard work and looking forward to you gaining back that top spot!

[Cobra]

Guys, more vote please, I'm fell into number 2 now, thanks. https://stockcharts.com/public/1684859

Cobra, I was surprised to see this yesterday.

I just want to say that my subscription to your services was THE best investment decision that I've ever made and I religiously read everything that you post.

Thanks for all of the hard work and looking forward to you gaining back that top spot!

Thanks. When the main troop of this board coming back the next Monday, we'll counter-strike.

[Cobra]

The summary of this week's stock picks.
viewtopic.php?f=10&t=758&p=109500#p109500

[Cobra]

The next week's stock picks.
viewtopic.php?f=10&t=765&p=109502#p109502

[Xian]

“There Go Apple's Margins: iPhone 5 To Sell At Wal-Mart For A Third Off Original Price”
http://www.zerohedge.com/news/2012-12-1 ... inal-price

Al,

I know I am going to end up sounding like a perma-bull here, and I am not. And I know you know to beware of a perma-ANYTHING, and ZH is definitely perma-bear. Their interest is shaping EVERY story to make it seem the End Is Neigh!

That said, here I go stepping out of my depth:

1. I have no idea what Apple's trade promotion budget is (I've gotten very lazy about this stock), but it's probably small. Very small. I'd be surprised if they were footing the cost of this promotion. It'd eat up all their trade promotion budget AND have the added benefit of pissing off all their other retail partners.

2. Our family has experience dealing with Wal-Mart (PM me if you want deets) and it's highly likely that they, Wal-Mart, are eating most of the cost of this promotion. I wouldn't go so far as to say "all of it" because that is unusual; but the majority of the cost of the promotion is probably being absorbed by WM.

3. The price of the iPhone is not $199. It is not $189. And it sure as heck ain't $130. It's about $650. I have no idea what the ASP is on iPhone 5— nobody does, yet— but if history is any guide is about $650.

So, in the unlikely event that the companies are splitting the cost of the promotion it'd be about $30 each (again, this is highly unlikely— WM is likely absorbing the lion's share), and $30 off a $650 phone is NOT 30%, it's less than 5%.

I don't think this is as dire for margins as ZH would have us believe.

Also, I'd take issue with the idea that mobile computing is a fad. (Not saying AAPL will always rule this space. They won't. Saying mobile computing is not a fad. Just ask Dell or HP if it's a "fad")

Hope you're having a great weekend and I look forward to cheating off you next week!

(EDIT)

[KeiZai]

PAGING KEIZAI
“total dislocation”
http://www.zerohedge.com/news/2012-12-1 ... l-outflows

Nice article by zerohedge, yes europe is bullish but for how long? I still see it as corrective

posted this chart in october and nothing changed my mind...so far

This index same with DAX and others EU indexes are clearly in 5th wave aka some kind of weakness/retrace is due soon so It´s hard and not very smart to chase it at this stage I will rather have fun with the bears and buy retrace then

the question is only how far can 5th wave go...sentiment is telling me -> not too far