Cobra's Market View

Cobra wrote:The chart I'd like your attention this week is here: https://stockcharts.com/public/1684859/ ... /271279804

You da man, Cobra! Vote when you click on this link biatches!

Bear food:

The equity market continues to track the 1967 analog remarkably well.
There was a significant top made January 11, 1968.
We have a new moon occurring next week on....January 11.

Short-term pullback is likely but will be bought again in my opinion

SPX:VIX reaching extremes (OB territory) VIX new triangle forming?
Weekly MACD is telling me pullback will be likely bought ES update : my short-term guess
viewtopic.php?f=2&t=778&p=111493#p111493
ES in the bigger picture, uptrend is clear looks like we are heading to 1550 area...max 1610 where a(march peak) = c where b is bottom in june
P.S: Ignore the rest/mess I was lazy to redraw the chart

Playing devil's advocate, some are saying that a megaphone pattern is forming which I understand is bearish?

http://stockcharts.com/h-sc/ui?s=$SPX&p ... 7368779579

http://stockcharts.com/h-sc/ui?s=$SPX:$ ... 0610322519

Risk is ON until proven otherwise

AUDJPY

If you can read simplified Chinese, you'd find how many people are shoring now. I'm worried about bears now.

http://www.hutong9.net/forum.php?mod=vi ... tid=197775

Bond bolingers are almost calling another top zone That often marks a SPX pullback within a few days.
(Junk bonds HYG made another new high on the WEEK. HYG Dividend yield is about 6.6%, so folks are still chasing yield and risk.
Investment-grade corporate bonds LQD, yielding only 3.53% are selling off) Likewise, the breadth bolingers are near a short-term-top signal (they also need to come back down inside the upper band to signal a spy top...which means they could go HIGHER before they pull back down inside the bb...must wait...) Also, I see bearish divergence on $NAMO (bottom panel)
And i’m calling this bearish divergence on $NYMO too (top panel), although you may disagree.
[credit: middle panels borrowstolen from cobra] http://www.youtube.com/watch?v=7RhWkK0lODE

but note the very clear, very bullish, very long-term breakout on one of my favorite “risk on/risk off” ratios for “trend followers”
(negative divergence) same chart zoomed in, detail
(double top with negative divergence on the RSI) http://www.youtube.com/watch?v=XJuEuRCKq1s

ClarkW wrote:

BullBear52x wrote:Fear spike look

Thank you Sir! As always, great stuff!

Sir? wow!

Cobra wrote:If you can read simplified Chinese, you'd find how many people are shoring now. I'm worried about bears now.

http://www.hutong9.net/forum.php?mod=vi ... tid=197775

I exit all my LONG positions on last Friday, but I believe there is still an up leg on Monday to create a bull-trap scenario before market pulling back, no longer than late Monday afternoon before market close?

ClarkW wrote:Inverse H&S on $BKX weekly? But daily looks a little extended (RSI and MFI)

Yes, long term is no dispute bullish and about to break out and move higher, but weekly over bought has to be worked out first. here is what I got on BKX or XLF long termDaily counter trend hope to see the MACD turn down if not, major squeeze is in the work.and here is my FAS short term swing like there's no tomorrow

wayne0708 wrote:

Cobra wrote:The chart I'd like your attention this week is here: https://stockcharts.com/public/1684859/ ... /271279804

Just one comment regarding this chart. this indicator didn't work that well in the past, e.g. between 2003-2007. I did not check other time frames.
Cobra: your thought?

Paging Wayne0708,
I saw yours MO mentioned in subscribe member, agreed that we are not quite there yet, NYMO is over 50 that's what I am looking for, for over bought. I'd like to see both NYMO and NAMO on the same scale (50 on both) but because of AAPL I let the NAMO slide this time, and look and Keltner Channels on SPY I think a risk to counter trend here wouldn't be so high, besides, my short term swing giving a go evil signal on SPY/SSO

And here is my secret weapon on TNA, I should have wait for the AMAD line to turn down at end of day for entry, it did during the day but turn back up at the end of day Friday. well, Monday I will have to keep my finger cross for the turn down. Good luck all in the week to come and thank you all for your wonderful charts and keep the snake culture alive. Peace!

SPX: review of three potential long term counts:

The main theme, which I have discussed, in my last long-term count update (October 28) remains unchanged: “From the 2000 Top price is unfolding a Double Zig Zag, therefore now price is involved in completing the wave (X). Once the wave (X) is in place price will begin to unfold the second Zig Zag down towards the 2009 lows.”

Therefore I dismiss any bullish scenario that implies a major break out above the 2000 top; instead I maintain the assumption that considers a move back down towards the 2009 lows once the wave (X) is complete.

The wave (X) is by definition a corrective countertrends move hence it has to unfold either a Zig Zag (3-wave) or a Double Zig Zag (7-wave), I am not considering a Triple Zig Zag as a coherent option.

Since so far we can make the case that price has unfolded a 5 –wave overlapping structure it seems reasonable to consider a Double Zig Zag as the most likely count.

Lets review the potential options beginning with a new one which was not discussed in my last long-term count update:

1. From the monthly chart above we can see that from the October 2011 low price could be unfolding a wedge. In this case then price with an Ending Diagonal would be on the verge of finishing the wave (A) of the second Zig Zag by unfolding from the November low the wave (V) of the Ending Diagonal.

2. From the June lows price is unfolding with an Ending Diagonal the last wave (Y). If this is the correct count price is now involved is tracing the wave (III) of the assumed Ending Diagonal. This pattern will complete the wave (X) countertrend rally from the 2009 lows.

3. From the October 2011 low Price with another DZZ is unfolding the wave (A) of the second Zig Zag. Since the internal structure of the up leg off the November low is corrective then this option can only pan out if price from the September high is involved in unfolding a Flat correction. If this is the correct count then price cannot substantially breach the September high.

Since we already have KBE, XLF, NYSE and RUT above their September peaks this option is now less likely.

SPX: Short-term EWP analysis (From the September 14 high)

As I mentioned last Friday in my opinion from the November 16 low price is unfolding a Double Zig Zag which is not complete yet as I believe that price is now involved in the final stages of the wave (A) of the second Zig Zag. Once the assumed wave (A) is in place I expect a shallow pullback wave (B) with a target in the range 1444 – 1430 (20 dma), which will be followed by the last wave (Y) up. If the pending wave (Y) substantially breaches the September high and above all the following pullback is corrective then we will know that the Flat option is no longer valid, instead price should be involved in one of the two Ending Diagonal options discussed above, in such a case price is not expected to breach the 50 d ma = 1412 until one of the two Ending Diagonal options is done (Assuming that the ending patterns are confirmed by the price)

During last Friday´s session I have been wrongly looking for an ending pattern of the current up leg (From the Dec 31 low), instead price had a final hour intraday range break out but since the internal structure is once again clearly corrective in my opinion we have two short-term options:

1. Ending Diagonal: From 1439.37 price is unfolding an ED hence a shallow wave (IV) pullback will be followed by the last wave (V)

2. Triple Zig Zag: From the January 3 reaction low price is unfolding the third Zig Zag, hence now price has began the wave (B) pullback


Both options have the same outcome although the latter should allow a temporary break out above the September 14 high.

If the Double Zig Zag count off the November 16 low is correct then a meaningful pullback will have to be postponed for a while.

In case I am wrong and the second wave (A) from the November 16 low is already in place, then bears have to breach the short-term pivot support located at 1455.53

I hope that this explanation of the short-term EWP is not too confusing.

VIX: last week had the biggest weekly drop ever since its inception in 1990.

In the weekly chart below we can make the case that the “fear index” has two potential patterns in play:

• During May 2010 – August 2011, VIX established a huge Double Top at 48. Obviously the theoretical target would not be fulfilled but if VIX breaks down the declining trend line support, in the area of 13, in force since the April 2010 low then a move back towards the all time low at 9.38 should not be ruled out

• A wedge is forming from the March 2012 low, in which case VIX is approaching a major reversal area as the mentioned trend line could be the springboard from where volatility should increase rapidly, although the wedge may not be complete yet.

If we compare the other three times that VIX reversed from the declining trend line support the weekly Stochastic was extremely oversold, this time it different, hence we could make the case that we will have a positive divergence (We will have to check it with the RSI as it is a better indicator) if this is the case then the odds of the wedge scenario would increase.

The following chart has two envelopes the (10,10) = Blue Bands and the (20,20) = Black Bands. It is unusual to see VIX below the lower Blue Band and it is extremely rear to see volatility dropping below the lower Black Band hence it is reasonable to expect a reversal in the range of 13.51 – 13, therefore the risk that SPX is approaching some type of a top should be raising.

Also keep in mind that the Stochastic is now extremely oversold, although VIX will most likely need a multi-week pattern in order to establish the foundation for a major reversal.

GOLD:

Last Friday I posted on Twitter / Stocktwits a potential complete wedge from the October 2011 peak. Within the likely Double Zig Zag from the September 2011 top, a wedge in this case would be equal to a Leading Diagonal wave (I) since price should have bagan the impulsive wave (Y) from the October peak.

In the GLD daily chart below we can see that the wave (V) of the assumed Leading Diagonal has truncated last Friday (Not in the case of the future contract which established a lower low).

Bulls have to act decisively since they have a huge obstacle to overcome at the 200 dma which coincides with Thursday´s gap down at 161.20

If they are able to reclaim the 200 dma then the odds that the Leading Diagonal is over despite having truncated the fifth wave, will increase substantially opening the door to a Fibonacci retracement. Probably the 0.5 retracement which coincides with the upper Bollinger Band could be a likely candidate for a wave (2) rebound.

The positive divergence of the daily RSI strengthens the short term bullish scenario although if price is involved in the initial stages of a wave (2) rebound the RSI has to confirm it by breaking the trend line resistance in force since the September 2012 peak

BullBear52x wrote:

wayne0708 wrote:

Cobra wrote:The chart I'd like your attention this week is here: https://stockcharts.com/public/1684859/ ... /271279804

Just one comment regarding this chart. this indicator didn't work that well in the past, e.g. between 2003-2007. I did not check other time frames.
Cobra: your thought?

Paging Wayne0708,
I saw yours MO mentioned in subscribe member, agreed that we are not quite there yet, NYMO is over 50 that's what I am looking for, for over bought. I'd like to see both NYMO and NAMO on the same scale (50 on both) but because of AAPL I let the NAMO slide this time, and look and Keltner Channels on SPY I think a risk to counter trend here wouldn't be so high, besides, my short term swing giving a go evil signal on SPY/SSO

BullBear52x:
I like your NYMO/NAMO chart very much. Yes it would be very comforting short when both are above 50s. For me, had I front run, I would at least wait for stoch to curl down first. JMHO.

hmm, just noticed, the risk appetite surges high again.