10/18/2014 Weekend Update

[Cobra]

The institutional buying and selling chart (courtesy of stocktiming) shows institutions are slowly accumulating while the market goes down, I read it as a good sign. Institutions are buying the dip. However the selling was too strong, so generally I'd expect to see the distribution curve to form a positive divergence (NYA new low but distribution curve doesn't make new high) before a bottom is possible. So not yet.

Smart money covered a little but not huge, so so probably not bottomed yet. I need see a sudden huge cover to signal the bottom, the cover this week was just not enough.

Since there're some arguments about how to read the chart, so it's necessary for me to explain here how I use this chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
When market down, if I see smart money suddenly rises from very negative to very positive value, then I know the pullback was over.

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or drops sharply.

[Cobra]

summary of the week's stock picks. No pain no gain, everyone is happy.
viewtopic.php?f=10&t=1452&p=173946#p173946

[Cobra]

Preview of the next week's stock picks:
viewtopic.php?f=10&t=1460&p=173948#p173948

[fehro]

SPX weekly

[fehro]

INDU daily

[fehro]

$BTK weekly

[jademann]

next week we will know:

http://stockcharts.com/h-sc/ui?s=$SPX&p ... 6386995523

[Al_Dente]

Bulls were quite encouraged by Friday’s +259 point rally
So why were folks buying so many index puts?
Can’t blame it on OPEX. The options-expiration dates are roughly marked in faded-blue-vertical lines and they don’t provide a good rationale here.
Red lines and arrows show what happened this year when folks bought so much protection. That suggests caution.

[uempel]

I happend to see that John J. Murphy's classic book (TA of the Financial Markets) is on goog books. But I suggest that everybody buys his/her own copy

I copied page 141 out of the book (the text png is above the chart) and I'm adding my view of the Broadening Formation in 2014

[grandeG]

I happend to see that John J. Murphy's classic book (TA of the Financial Markets) is on goog books. But I suggest that everybody buys his/her own copy

I copied page 141 out of the book (the text png is above the chart) and I'm adding my view of the Broadening Formation in 2014

2nd.png

googJJM.png

Totally agree with the pattern..... Although I believe we will make one more low before wave 6 starts. From a EW count it seems one more wave down is needed in the coming days.

[FlowerGirl]

...with ST implication.

A dip to 180 (~1800 SPX) will be within the norm of this setup.

[jademann]

And chief clown cramer says safe to buy again lol

http://finance.yahoo.com/news/cramer-ca ... 00635.html


spx
http://stockcharts.com/h-sc/ui?s=$SPX&p ... 4093609025

oil
http://stockcharts.com/h-sc/ui?s=USO&p= ... 8785107521

transports
http://stockcharts.com/h-sc/ui?s=$TRAN& ... 5757844475

jnk
http://stockcharts.com/h-sc/ui?s=JNK&p= ... 5428074157

iwm
http://stockcharts.com/h-sc/ui?s=IWM&p= ... 3229988016

vix:vxv
http://stockcharts.com/h-sc/ui?s=$VIX:$ ... 9478280428

xiv
http://stockcharts.com/h-sc/ui?s=XIV&p= ... 9582396052

vix term structure:
http://www.cboe.com/data/volatilityinde ... dexes.aspx

[quientuves]

[Al_Dente]

Expectations for the remainder of this earnings season are positive.
The P/E Ratio (in black) on the S&P peaked last December and is now at a porous double bottom.

AAPL may be the decider on Monday night.
A Thomson Reuters poll of analysts expect: earnings $1.30 a share (up 10% from the year-earlier quarter), on revenue of $39.8 billion (up 6%).
AAPL is roughly 3% of SPY and 13% of QQQ, so an earnings “beat” is of the utmost importance for bulls.

"We had an amazing reception to the iPhone 6 and iPhone 6 Plus launch… these iPhones have become the fastest-selling iPhones in history. And in the first 30 days, we have set a new high-water mark for the most orders taken. And I don't mean by a little — by a lot, a whole lot…. [and in China]…pre-orders have set a new record."
[Tim Cook]

“Please vote today and tomorrow”
[Snake]
https://stockcharts.com/public/1684859

[jademann]

quinteves I took that head and shoulders bet last week and it killed me. all those who bought that falling knife are sweating here.

[quientuves]

quinteves I took that head and shoulders bet last week and it killed me. all those who bought that falling knife are sweating here.

I'm probably the biggest and more stubborn perma-bear you can find.

My idea is not to buy, but wait until we make that red-dot top and then short it.

That chart fits quite well too with Murphy's broadening top proposed by Uempel. And with Cobra's model of 2nd top.

[jademann]

Thanks quientuves, for your thoughts, I would go short there also.

[fehro]

Expectations for the remainder of this earnings season are positive.
The P/E Ratio (in black) on the S&P peaked last December and is now at a porous double bottom.

The attachment 1018pe_png.png is no longer available

AAPL may be the decider on Monday night.
A Thomson Reuters poll of analysts expect: earnings $1.30 a share (up 10% from the year-earlier quarter), on revenue of $39.8 billion (up 6%).
AAPL is roughly 3% of SPY and 13% of QQQ, so an earnings “beat” is of the utmost importance for bulls.

"We had an amazing reception to the iPhone 6 and iPhone 6 Plus launch… these iPhones have become the fastest-selling iPhones in history. And in the first 30 days, we have set a new high-water mark for the most orders taken. And I don't mean by a little — by a lot, a whole lot…. [and in China]…pre-orders have set a new record."
[Tim Cook]

“Please vote today and tomorrow”
[Snake]
https://stockcharts.com/public/1684859

The attachment aapl_png.png is no longer available

The big question is.. .did sales drop as customers postponed purchases for the release of iPhone 6 as the several "leaked" images floated around the web. So QE is Sept 28/29th and from the Sept 9th event... The iPhone 6 won't be available everywhere from 19 September, however, with Apple set to launch the handset in 22 more countries on 26 September. How many phone sales made it in under the wire?.. next quarter maybe huge. fwiw. http://investor.apple.com/financials.cfm So either it blasts off above the trend/20/50d.. and then may put in a blow off top.. island candle.. taking in consideration long term charts and reverse in the months ahead? or.. just break down? I know more on the bearish side… just don't like the monthly at the moment. It would need some serious upward movement with volume imho to continue up.

[fehro]

The big question is.. .did sales drop as customers postponed purchases for the release of iPhone 6 as the several "leaked" images floated around the web. So QE is Sept 28/29th and from the Sept 9th event... The iPhone 6 won't be available everywhere from 19 September, however, with Apple set to launch the handset in 22 more countries on 26 September. How many phone sales made it in under the wire?.. next quarter maybe huge. fwiw. http://investor.apple.com/financials.cfm So either it blasts off above the trend/20/50d.. and then may put in a blow off top.. island candle.. taking in consideration long term charts and reverse in the months ahead? or.. just break down? I know more on the bearish side… just don't like the monthly at the moment. It would need some serious upward movement with volume imho to continue up.

And how does this play into it? USD daily

[daytradingES]

thinking this market is broken and going down.
So where to short from?
My guess if it doesn't fall Sunday night/Monday then 1913-1928 (ES)