04/28/2012 Weekend Discussion

[Cobra]

Institutions are slightly in distribution.

[Cobra]

Smart money are net short.

[Cobra]

AAII close to bearish.

II close bullish.

[Cobra]

hedging activities are increasing, so those are bullish signs.

[MrMiyagi]

From pezhead's last post on Friday, put/call ratio ended the week at 3.59, does that indicate institutional bearish bets?
Seems to me the market wants to run some more, 1440ish.

[pezhead9000]

Just to be clear - the 3.46 P/C ratio was for Friday's activity based on yahoo finance options charts. I'll have to get the change in OI to see the net effect.

[giggleeyes]

Smart money are net short.

Smart money is net short --- is that a bearish signal?

[Cobra]

Smart money are net short.

Smart money is net short --- is that a bearish signal?

Yes, it's bearish sign.

[Mr. BachNut]

Some fun with trend-mapping today.
Last week was interesting because instead of advancing a correction with a good second push down, Mr. Market balked at setting a lower low and took off upwards.
The long magenta trend from the October low (connecting 3 bottoms) was broken, got a kiss goodbye and was set to get a declining tops line going (light green) but did not follow through.
When I draw a weaker magenta trend from the October low (connecting only 2 bottoms), it was pierced but not broken. The Bulls are fighting to hold this big trend in some form.
When a long or steep trend of significance rolls over, I expect to see at least two pushes down or a consolidation pattern (like a symetrical triangle or a rectangle). I can't see either yet. So, no rollover yet.
Yet, trend is also in doubt given the break/piercing. We also have double top potential coming up.

A rising bottoms line (red) with a bit of head and shoulders to it seems to be taking on some significance. Thar be big stops below...
A small rising bottoms line from the April 10 low also looks relevant nearer term perhaps for a test/pullback sort of thing.
If we are entering some kind of topping phase here, but the market is not ready to correct yet, position traders are in for a few challenging weeks.

[KeiZai]

A few things to watch in the week ahead

XHB chart looks very bullish -stoch, macd etc but she pierced the top bollinger band and it deserves a closer look, breakout or a triple top...thats the question

Google - hanging man on daily

Interesting that DAX made fifth wave down but SP500 failed to do so, thats why I missed the bull move but not matter, Im on commodity train cuz aussie$ made a breakout

Eurostoxx chart have a little space (europe benchmark)

Euro at critical point, rising wedge + strong downtrend line

Last one BMW, I think we are close to the top again

P.S: Spains GDP on monday, my guess is we will go down on monday, maybe + tuesday and then up but I see upside extremely limited

[TraderGirl]

Well, I think Keizai got it right. We started to top out on Friday, couldn't get above that trend line at 1402/1403, so seeing more down on Monday makes sense from a technical point of view. Also, we have two turn dates this week Tuesday and Friday. Monday has negative aspects, on top of that there is a chart that shows negative energy on Monday, maybe into Tuesday, but then the aspects get more positive as the week progresses until Thursday. But Friday into next Monday are more negative.

The 13th has a Jupiter aspect that is bullish, so it should start to pull the market up sharply 8th -13th...

The 14th/15th could also have a sharp drop.

From looking at the astro aspects, and charts I have seen, it should not start to get really choppy until after the 18-20th.

Last week on Wednesday, when there was a turn, all charts and astro's suggested a down move, but Uranus was involved, so we got an unexpected rally. Uranus is an exaggerator and the planet of surprises, so it can take you by surprise, and also exaggerate whatever directional move it makes...FWIW...

[knock]

Nasdaq weekly has bullish engulfing. Opinion?

[Cobra]

Nasdaq weekly has bullish engulfing. Opinion?

It's very very bullish statistically. The following back test was made on 04/21/2011.

[slopete]

Thanks for posting your study, Cobra. It's very informative but could be even more so if the entry and exit rules were to accompany it. If you get some time, would it be possible to add them to the post?

TIA

slopete

[xfradnex]

For those of you who like patterns, here are my Elder Impulse Charts, listed side by side. Note that first color column is close to close Elder, second High to High, third Low to Low (red = down day, Green = up day, Blue=neutral). Any patterns/signals? Any feedback would be appreciated. Thanks

[Mr. BachNut]

I have seen some previous posts concerning Lindsey's three peaks and a domed house pattern.
I was just looking at Bulkowski's piece on this pattern (http://thepatternsite.com/3peaksdome.html) and he says the move from point 14 to 23 (the highest high of the pattern) lasts 7 months and 8-10 days.
That timing seems overly precise to me but...
if you place point 14 at the October low, it appears point 23 would land somewhere between May 12-15.
So, this could be interesting to watch.
I don't know where Bulkowski came up with that timing. Are there any Lindsey experts out there who have experience with the pattern or who would have a view on this?

[taggard]

I have seen some previous posts concerning Lindsey's three peaks and a domed house pattern.
I was just looking at Bulkowski's piece on this pattern (http://thepatternsite.com/3peaksdome.html) and he says the move from point 14 to 23 (the highest high of the pattern) lasts 7 months and 8-10 days. That timing seems overly precise to me but... if you place point 14 at the October low, it appears point 23 would land somewhere between May 12-15. So, this could be interesting to watch. I don't know where Bulkowski came up with that timing. Are there any Lindsey experts out there who have experience with the pattern or who would have a view on this?

Mr. Bachnut

below is a post i made 3/27 in response to Kena's note. he argued at the time we were between 22 and 23. The lady i got this from is Helene Meisler over on real money. the short version is depending on where you assume point 14 is--point 23 happens between may and july. I am open minded but often old highs act as attractors--i would love to see the 2007 high (stops) get blown out first--esp with qqq and aapl stalling out early--and am wondering if we can get this near the end of the 2nd quarter. stuff like nyse mcclellan oscillator (nymo on stockcharts) and nyse summation index (nysi on stockcharts) don't look right for a major decline but in 20-40 trading days could set up flawlessly (ideally with lower highs on nysi).

A ta person i have followed for 12 years actually has george lindsays notes (given to her by the guy she learned from) it seems there are over 100 pages of text this guy made on this pattern--including 27 pages of notes (single space typed) on "counts from the middle section". I think this overall makes the pattern less trustworthy. anything too complex is hard to use trading. never the less--a key idea is there is a set time for the move up from either 10 or 14 depending on which count you use. (yeah he had alternate counts) the period of time is 7 months 10 days (all days are counted not just trading days) which puts the key top in may (best case) to july worst case. given the complex nature of the pattern (along with the absurd detail in the notes) most likely the best way to use the pattern is more of a general idea and with the widest timing.

(a general idea means look at each move and consider the psych at that time--as opposed to be being 100% focused on the exact visual image of the pattern. all patterns are actually made up of market trading and psych--and as al brooks notes--"if it looks like a pattern (even if it is not exact) it will likely act like a pattern".)

what i don't see is on spx why we have to be between your 22-23 as we have only a shallow pull back to the daily 20 ema. you could be right of course--i would just consider the timed move from 10 to 14 which of course were the lows in 2011.

finally the most useful part of the pattern to people on this site might be the shape of the top (so 21 to 25) if you pull up a monthly and look at the last two tops this is a very different idea. the psych behind the proposed domed top is clearly an explosive move (after a failed pullback). the most logical place for such a move would be close to the old high of 2007. Any breach to the upside would force epic short covering (as many traders will lean short at such a major event) and this would create a short term move of say 50-150 spx points. That in turn could force a move over the last high (and ideally 1600) pulling in everyone with the idea a clear new bull market was in place.

and that of course would finally be the last move of this advance (about 6-12 months after many thought the move would happen). the timing is interesting in terms of the election (eg election could be factored 6 months prior to event and start having effect) and the ECRI recession call (for ball park may-aug of this year) since they have a very good record in general.

only my opinion but (1) would not fixate too much on the exact shape other than the major psych behind the pattern. (2) am not convinced that we are 22-23 but certainly cannot prove we are not. (3) if we get a forced move up around (just at just under or just over) the 2007 high--that is going to be interesting--esp if we get a fast breakdown rather than the typical 6-12 month top formation.

Bonus--readers may want to pull up an dow chart of 1964 to 1984ish and consider the pattern in that light just for "fun".

[pezhead9000]

When I look at the commitment of traders report - I see net long on the Nasdaq. This differs from sentimentrader - thoughts?
Nasdaq Institutional
Long: 33,430
Short: 7,958

Hedge funds
Long: 35,000
Short: 11,592

http://www.cftc.gov/dea/options/financial_lof.htm

This is published on Tuesday's so it's about a week old

[pezhead9000]

Another site that breaks down COT data into charts
http://www.dailymarkets.com/commitment-of-traders/

[BullBear52x]

Happy weekend everyone. I am ready to get back to work tomorrow.

Here's my little say on SPY, final gap resistance (intraday), daily candle reversal (small one), weekly big fat bullish candle.

intraday support floor now sit at 139ish. if there will be a pull back it will be bought there hopefully

XLF, you got to play a little evil on this one. resistance level and MACD weakening, Have a good one.