Cobra's Market View

Gaining momentum
Nyadv still 2000
Sqz alert (?)
5MIN INTRADAY ONLY

Found this interesting. I don't know if/how it can be becktested or not?

From Caldero's web site, someone posted:

" CygnetNoir says:
March 20, 2013 at 9:35 am
Two points: First, my near term bullish count from Monday with a 1576 SPX target is still in play; however, point two is that the last time we had a B-wave rally where the Dow made a marginal new high and the SPX did not, the Dow dropped nearly two hundred points in the last two hours of trade and the SP sropped 26+ handles in the same period. Is there anything going on this afternoon that could be the catalyst for such a dramatic sell-off? Hmmmmm…."

Resistance is so strong here at 1560/63 that there will be more downside/sideways before any break to the upside can occur.

Wow, congratulations![/quote]

Like I said the other week, I'm looking for ways to optimize your scan/filter. It's an easy thing to set up on Sunday nights, which is what I do. Once the position has been triggered, I put an ATR-basd stop loss. I put 5k to each position, and see how it rolls. I look for target exit prices based on basic measured move calculations, but ultimately make a discretionary choice based on relative strength post breakout.

Thanks for the screens buddy - keep it up![/quote]


Well, you got the essence of trading those setups. one thing though, the base low is your stop loss (in theory), you don't need ATR based stop loss.

See big red comment for stop loss settings. also this will be part of members only services in the future because once people know how to trade those setups, I have to limit people who know, otherwise if everyone put the buy stop at the same place and it breaks out, it'd ruin everyone's entry.[/quote]

totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Just curious. Do you trade these setups in reverse?

Cobra wrote:

jarbo456 wrote:

Cobra wrote:

jarbo456 wrote:

L_T wrote:From Cobra's breakout list both GEO and ISIS have either triggered or about to.

EXP is strong too in the face of 3 red days from the broad markets.

i'm in:

DAL
GEO
ISIS
KBH
S

All those have triggered for me.

Wow, congratulations!

Like I said the other week, I'm looking for ways to optimize your scan/filter. It's an easy thing to set up on Sunday nights, which is what I do. Once the position has been triggered, I put an ATR-basd stop loss. I put 5k to each position, and see how it rolls. I look for target exit prices based on basic measured move calculations, but ultimately make a discretionary choice based on relative strength post breakout.

Thanks for the screens buddy - keep it up!

Well, you got the essence of trading those setups. one thing though, the base low is your stop loss (in theory), you don't need ATR based stop loss.

See big red comment for stop loss settings. also this will be part of members only services in the future because once people know how to trade those setups, I have to limit people who know, otherwise if everyone put the buy stop at the same place and it breaks out, it'd ruin everyone's entry.

Received this from CS some minutes ago. Note that the publication is for investors, not for short term traders.

quatzl wrote:Just curious. Do you trade these setups in reverse?

No. but you can try by put buy stop on base top and sell top on base bottom. All stocks picked are on uptrend, so sell the base breakdown in theory won't be good, but you can try and let us know if it's a good idea.

jarbo456 wrote:
totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Trade breakdown? Breakdown would be stop loss, not a reverse trade. Do you mean if I set stop loss at base low, it'd reduce the profit?

Don't know where the top will be, but if you look at the weekly chart of S, it's making higher highs with a negative MACD...

so once sentiment changes on this stock it gets very gappy...

the equal weighted brother below RSP, looks bullish as it could be an ascending triangle in the forming. so this should make SPY a little bullish biased too.

Cobra wrote:

jarbo456 wrote:
totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Trade breakdown? Breakdown would be stop loss, not a reverse trade. Do you mean if I set stop loss at base low, it'd reduce the profit?

If you put stop loss just below the base of the range it reduces the risk reward ratio of the setup.

It's the same stop loss problem we have with any trade - do we keep it wide and so we don't get shaken out as much, or do we keep it tight and avoid losing as much.

I don't have the data to backest this setup but from memory i can tell this is quite accurate. DJIA tricked me in the end of July 2011 when made a marginal higher high and SPY did not and then the rollercoaster followed (us debt limit). So this can be used as an early warning sign if, after a new high in DJIA, a pullback follows and SPY did not made a higher high.

rocket wrote:Found this interesting. I don't know if/how it can be becktested or not?

From Caldero's web site, someone posted:

" CygnetNoir says:
March 20, 2013 at 9:35 am
Two points: First, my near term bullish count from Monday with a 1576 SPX target is still in play; however, point two is that the last time we had a B-wave rally where the Dow made a marginal new high and the SPX did not, the Dow dropped nearly two hundred points in the last two hours of trade and the SP sropped 26+ handles in the same period. Is there anything going on this afternoon that could be the catalyst for such a dramatic sell-off? Hmmmmm…."

jarbo456 wrote:

Cobra wrote:

jarbo456 wrote:
totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Trade breakdown? Breakdown would be stop loss, not a reverse trade. Do you mean if I set stop loss at base low, it'd reduce the profit?

If you put stop loss just below the base of the range it reduces the risk reward ratio of the setup.

It's the same stop loss problem we have with any trade - do we keep it wide and so we don't get shaken out as much, or do we keep it tight and avoid losing as much.

I see. And this is why nowadays I only pick "base with narrow range". By the way, I actually hand picked every week's stocks. The program cannot do as good as what I hand picked. So it's not a easy work for me, although it's free!

Cobra wrote:

jarbo456 wrote:

Cobra wrote:

jarbo456 wrote:
totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Trade breakdown? Breakdown would be stop loss, not a reverse trade. Do you mean if I set stop loss at base low, it'd reduce the profit?

If you put stop loss just below the base of the range it reduces the risk reward ratio of the setup.

It's the same stop loss problem we have with any trade - do we keep it wide and so we don't get shaken out as much, or do we keep it tight and avoid losing as much.

I see. And this is why nowadays I only pick "base with narrow range". By the way, I actually hand picked every week's stocks. The program cannot do as good as what I hand picked. So it's not a easy work for me, although it's free!

I know you pick the narrow range breakout setups. I thank you for that. I do a more general filter, but your breakouts obviously have a nicer range than the automated filter results.

Thank you, thank you, thank you.

Please keep them free, and I hope some people use them - enough to keep you doing it, but not enough for you to make it a paid service.

Not trading related.
Till Fed annoucement, can we relax a bit? It's a saying, don't put wolves to guard sheeps. But seems nobody told this to french .
http://www.zerohedge.com/news/2013-03-1 ... ss-account

Cobra
Jarbo
Excellent talk
Thx 4 posting it on-board

well, guess we'll just hang around here wait for FOMC at 2pm. lunch time, will be back.

jarbo456 wrote:

Cobra wrote:

jarbo456 wrote:
totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Trade breakdown? Breakdown would be stop loss, not a reverse trade. Do you mean if I set stop loss at base low, it'd reduce the profit?

If you put stop loss just below the base of the range it reduces the risk reward ratio of the setup.

It's the same stop loss problem we have with any trade - do we keep it wide and so we don't get shaken out as much, or do we keep it tight and avoid losing as much.

I can give you some real time feedback on this.. I was triggered into FSL... Needless to say it came within pennies of a theoretical stop loss. I'm well trapped by this little bastadge. In hindsight, I think there probably is a better stop loss placement. A genuine break-out shouldn't come back to retest the break-out area (except in those volatile stocks that love to shake traders out)... in which case maybe you filter out the more volatile symbols (I know you look for solid trending stocks).

stlwater wrote:

jarbo456 wrote:

Cobra wrote:

jarbo456 wrote:
totally agree. but i'd rather use an ATR based stop which makes the stop tighter than most of those ranges. also, if you trade the range breakout then you are really going for something like a 1:2 or 1:3 risk reward ratio. if you trade with a breakdown of the low of the range, that ratio drops drastically. i'm not saying you're wrong, just saying that i'd rather get into a stock twice (maybe three times), then use the larger breakdown of the range stop price.

Trade breakdown? Breakdown would be stop loss, not a reverse trade. Do you mean if I set stop loss at base low, it'd reduce the profit?

If you put stop loss just below the base of the range it reduces the risk reward ratio of the setup.

It's the same stop loss problem we have with any trade - do we keep it wide and so we don't get shaken out as much, or do we keep it tight and avoid losing as much.

I can give you some real time feedback on this.. I was triggered into FSL... Needless to say it came within pennies of a theoretical stop loss. I'm well trapped by this little bastadge. In hindsight, I think there probably is a better stop loss placement. A genuine break-out shouldn't come back to retest the break-out area (except in those volatile stocks that love to shake traders out)... in which case maybe you filter out the more volatile symbols (I know you look for solid trending stocks).

thanks for the feedback. My way of trading breakout is partial out on the breakout day, only hold those close high of the day, this way, it eliminates some false breakout cases the next few days. I have plenty of picks every week, so I won't hesitate to discard those who have breakout but not up enough on the breakout day, just to be safe.

Cobra wrote: thanks for the feedback. My way of trading breakout is partial out on the breakout day, only hold those close high of the day, this way, it eliminates some false breakout cases the next few days. I have plenty of picks every week, so I won't hesitate to discard those who have breakout but not up enough on the breakout day, just to be safe.

Thanks for the tip.