03/31/2012 Weekend Update

[Cobra]

Institutional accumulation keeps decreasing while distribution trending up (courtesy of StockTiming.com). This usually is a sign of top.

[Cobra]

The chart below is what I don't understand. Lots of divergences here. The defensive sectors are still fund managers favor. TED is not much better. BDI saying the economy is no better. Only high risk debt market is strong, 4:1, the market simply keeps charging up. Interesting.

[Cobra]

Dow theory, average must confirm, clearly it's non confirm. Well, guess all those don't matter, nowadays imagination is the only thing needed to invest.

[lazytrader]

Good Morning Cobra,

This market has been very difficult to trade last couple of months. Imagination is the key to be a successful trader in this market. .

You were saying it will be choppy...i almost lost hopes of trading this market.

[johnnywa]

Cobra just wanted to say thanks for all your hard work

[KeiZai]

Weekend readings

consequence of money printing: http://www.businessinsider.com/10-reaso ... end-2012-3
http://www.youtube.com/watch?v=REqrkeonbWc

attachment: about how they manipulate gold&silver market

Lumber & housing stocks : http://www.mcoscillator.com/learning_ce ... ng_stocks/

relax and enjoy your weekend everyone!

hint 4 next week: shorts are my mega millions lottery ticket, and its 100% guaranteed to win cold shower is coming

[KENA]

The info from KeiZai on the $ could start the ball rolling and next who will but our debt.If that happens look out.

[ocassional observer]

Cobra, the way i read this is that the market is like a spring. if everything goes up together it's like all the part's of the spring move together and therefore there's no tension inside. when divergences appear it means the parts are moving in different speeds and tension builds. the tension is released when the different parts converge. the bigger and longer the divergence, the bigger and more violent the convergence will be. this can be seen also by looking at the csfb index:

this index moved above 30 on the 22/2 and stayed above. it paid to short the market each and every time this index moved to such extremes and i don't expect this one to be different. so my prediction from here is that the market will move below it's close of 22/2 (1360) sometime in the not too distant future.
another measure of tension is by looking at the vix:vxv ratio in the weekly chart by cobra here:
http://stockcharts.com/public/1684859/c ... 133851241;
that new low sends the same message of market tension, and the rise might suggest that the market is getting ready to top.

[Buckethead]

This is a liquidity market. Old rules don't apply

[Al_Dente]

PAGING MR. BACHNUT

I “borrowed” your 5 moving average TRIN top signal. I hope that’s ok with u.
I found it quite on target, on the daily, when it crosses over (up above) the 0.8 line.
I was wondering if you had an official-number-line for bottoms?
I just made up the green/bottom lines here. When I open the chart up to longer term it is really tough to find an
appropriate “number-line” that works at bottoms. Or is this particular TRIN indicator only good for tops???
Thanks for your thoughts.
http://stockcharts.com/h-sc/ui?s=$TRIN& ... =261667767

[Al_Dente]

The earthquake in the bond market continues, but it doesn’t look as violent on the weeklies.
Here are two “Risk to Safety Ratios,” or the ratios of corporate and junk bonds (risk) compared to government bonds (safety) over the longer term.

A few things jump out:

1) The ratios have predictive power, especially evidenced by the fact that both bottomed a full 4-5 months before the SPX March 2009 bottom
(meaning that investors started buying risk bonds 4-5 months before they bought back into stocks).
2) Risk is still on. Today, investors still prefer risk bonds over safe gov bonds, as they have since late 2008.
3) Corporates to Governments Ratio (top panel) is starting to look like a wedge pattern.
4) Folks are backing off from Junk bonds (considered the riskiest; middle panel) in favor of corporates (“less” risk; top panel). Typically folks dump their riskier bonds first, when they start getting nervous; note the selloff last year in junk was deeper than the selloff in corporates.
So, you could say that the Junk to Gov Ratio (middle panel) is calling for a SPX top because of its non-confirmation of highs,
and we can add that to our long list of bear SPX indicators.
4) Note in the bottom panel: IF (and that is a big important IF) investors continue selling off their government bonds,
that should be bullish for stocks (and also bullish for risk bonds).

[Caveat: These are Al Dente kool-aid charts that I just made up, so any opposing/correcting views are appreciated.
I still favor my “industry standard” Stock to Bond Ratio (it’s still risk-on) but I just wanted a pure bond market view of things.
Also, the moves in the bond market often give us “leading” signals, but as you can see, the MA moving average crossover is a lagging signal, not leading.]

[mozart]

Hi to all, posting Silver as usual, weekly chart- descending triangle formation, school example, if it proves to be that, than .... no further comment.
Have a great weekend guys!

[Mr. BachNut]

PAGING MR. BACHNUT

I “borrowed” your 5 moving average TRIN top signal. I hope that’s ok with u.
I found it quite on target, on the daily, when it crosses over (up above) the 0.8 line.
I was wondering if you had an official-number-line for bottoms?
I just made up the green/bottom lines here. When I open the chart up to longer term it is really tough to find an
appropriate “number-line” that works at bottoms. Or is this particular TRIN indicator only good for tops???
Thanks for your thoughts.
http://stockcharts.com/h-sc/ui?s=$TRIN& ... =261667767

Cool. One pointer. The win loss ratio is different and less favorable in uptrending markets (as one might expect) than downtrending or choppy markets. So, I adjust how I manage the trade in context with trend. When the signal appears during a bull trend, I like to have other evidence or at least an arguement that the market has selloff potential to enter the trade in size. In the most recent case, the trend had run statistically long and a few indicators had softened up.

I have not traded a TRIN bottom setup yet. Still studying. It looks like it may be less reliable than top (lower win/loss ratio) but that it may still pay (winning payoffs bigger than loser drawdowns). I am focused on the 5 day average crossing under (down below) the 2.2 line after peaking above. Let me know what you think.

[BullBear52x]

Paging Dr. Al.
I went back to read Friday watering. here are my use of MA, I use triangular simple moving average, my favorite time frame are 1, 5, 10 and 60

above 5min I will focus on 5 sdma. see red high lighted number are equiv of 5 sdma.

1 min. 195 and 200
5 min 21 144 390 and 377 smooth to fib sequence nunber
10 min 195 and 233 smooth
15 min 130
30 min 65
60 min 35 and 34 smooth

[BullBear52x]

Here is what I got this weekend. no buy until it trades over 141ish. I am net short 20% and long TVIX O-yay

[Mr. BachNut]

Hi to all, posting Silver as usual, weekly chart- descending triangle formation, school example, if it proves to be that, than .... no further comment.
Have a great weekend guys!

Also worth noting an inverse head and shoulders forming from mid-September to present.

[swayne99]

Good Morning Cobra,

This market has been very difficult to trade last couple of months. Imagination is the key to be a successful trader in this market. .

You were saying it will be choppy...i almost lost hopes of trading this market.

Difficult to trade? Are you serious? This has been the easiest market to trade as its gone no where but up. if you think this market was difficult to trade you need to find another profession

[Al_Dente]

Paging Mr. Bachnut
SWEET.
2.2 green line for bottoms appears to fit the bill, with a few fails. Very nice.
I agree: I also use only with other indicators, etc.
Thanks. I’m counting on you to update us periodically on the win/loss ratios which you are so good at.
Bcuz as you know, I don’t like 2 do toooooo much…… aaaaaaaaaa….math stuff.
GL2U

Paging Baron von Maestro
Cool, thanks very much.
U know I love u, but for some reason I also love to kid you, I think it’s because you’re such a tough old buzzard and I know you can take it.
I post outrageous nonsense just to keep u alert so u don’t go soft on us here.
For example, here is a kidding song just 4 u http://www.youtube.com/watch?v=mQZmCJUSC6g
You r a very important part of this board IMHO. U have taught me a lot.

[lazytrader]

Good Morning Cobra,

This market has been very difficult to trade last couple of months. Imagination is the key to be a successful trader in this market. .

You were saying it will be choppy...i almost lost hopes of trading this market.

Difficult to trade? Are you serious? This has been the easiest market to trade as its gone no where but up. if you think this market was difficult to trade you need to find another profession

Thanks for your suggestion. I have a full time job. I know i am not good at this.

I am talking about trading options.

[xfradnex]

Some USO -SCO charts. Some USO breakdown on last chart.