Cobra's Market View

johnnywa wrote:Italian elections should be over basically Monday morning Central time say 9-11 with most returns in by then

Mr. BachNut wrote:Update on weekly SKEW chart:

A correction warning issued on Friday suggesting good odds for a lower weekly SPX close in the next three weeks.
However, given how last week unfolded there are two interpretations.

One is that a correction started last week and isn't finished. There is more down to come, and we should see lows that at least hit SPX 1496.33.

The other is that the market is still setting up for the corrective move, and there is some more up ahead before the correction hits.
The reason for this interpretation is Friday's rally, not only in the SPX but also the SKEW.
While the Friday close did meet the technical criteria for the warning, it was actually a close call as SKEW was rising quite dramatically on the daily chart.
We want the warning to flash when SKEW starts trending down, and it may still be trending up.
We'll know next week if the SKEW keeps climbing.
The IMPORTANT TAKEAWAY, however, is that while a lot of timid bears were scurrying for their caves on Friday, the folks in the options market that drive SKEW were actually reloading for a downmove. They were sellers of the rally if you will. If Friday's rally continues into next week, I would expect SKEW to keep rising as the corrective moment gets closer.

The attachment SKEW 022413.jpg is no longer available

Royal Flush wrote:

Mr. BachNut wrote:Update on weekly SKEW chart:

A correction warning issued on Friday suggesting good odds for a lower weekly SPX close in the next three weeks.
However, given how last week unfolded there are two interpretations.

One is that a correction started last week and isn't finished. There is more down to come, and we should see lows that at least hit SPX 1496.33.

The other is that the market is still setting up for the corrective move, and there is some more up ahead before the correction hits.
The reason for this interpretation is Friday's rally, not only in the SPX but also the SKEW.
While the Friday close did meet the technical criteria for the warning, it was actually a close call as SKEW was rising quite dramatically on the daily chart.
We want the warning to flash when SKEW starts trending down, and it may still be trending up.
We'll know next week if the SKEW keeps climbing.
The IMPORTANT TAKEAWAY, however, is that while a lot of timid bears were scurrying for their caves on Friday, the folks in the options market that drive SKEW were actually reloading for a downmove. They were sellers of the rally if you will. If Friday's rally continues into next week, I would expect SKEW to keep rising as the corrective moment gets closer.

SKEW 022413.jpg

Thanks for the update Mr. BachNut.The last time the daily SKEW exceeded 130 was last fall during the distribution phase. It then fell and recouvered as it appears to have begun Friday. It topped at 128 and fell again but the SPY continued to rise forming a double top. The 3rd peak both the SPY & SKEW made a LH. I wonder if this pattern will repeat

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nightlyhawk wrote:This very short-term setup worked again last Friday. I only used it for swing trading.

ClarkW wrote:Entering distribution phase? Chart is from New Trading Systems http://stockcharts.com/public/3421479/tenpp

nightlyhawk wrote:This very short-term setup worked again last Friday. I only used it for swing trading.

Royal Flush wrote:

shaca wrote:USD/CAD is going to do what USD/JPY has done

shaca, your statement is a shock to me as I am sure it would be to any Canadian. Under what premise do you perceive the Bank of Canada is going to devalue our currency as Japan has done?