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Thursday, January 29, 2015

Daily update 1/29 Mark Cook

Yet another retrace of a news event.  Here is the SPX chart.

The bulls fought back today with a nice bounce.  The breadth was 64% positive so it was fairly broad based buying.  There were 230 new highs and 151 new lows.  The lows picked up quite a bit.  New highs remain strong.  Yesterday the down volume was nearly 90% of total volume.  Today the up volume was only 59% of the total.  The bears came out a bit ahead over the last two days.  However, the possible inverse head and shoulders bottom is still in play.  Will the bulls capitalize on it?  Lets take a look at the futures chart.

The blue bar last night suggested we could get a bounce today.  That was aided by the high TRIN value mentioned yesterday.  So far all we did was bounce from oversold.  The sellers may come right back out again tomorrow.  The futures are below the 200 SMA which gives the bears the edge.  However, they might want higher prices before they start selling again.  So far they have not been aggressive selling into weakness.  They seem to much prefer strength.  If we keep going down that will change of course.  The 50 SMA could provide resistance.  The 200 SMA would likely to be much tougher to get through.

We got an oversold bounce today, but the bulls need to prove themselves.  If there is one reoccurring theme this year it is selling into strength. Should we gap up in the morning they might hit it again.  We are still in the chop zone and the news flow is affecting things day to day.  Pretty tough to predict that.

Mark Cook is a private trader featured in Jack Schwager's Stock Market Wizards series of books.  He only trades his own money so that should eliminate the usual Wall Street bias.  That is also why many people have never heard of him.  He is not exactly a glory seeker.  He uses his proprietary indicator based on NYSE ticks known as the CCT (Cook Cumulative Tick).  He has made numerous market calls over the years including turning bearish in 2007 and bullish in late 2008.  He tends to be a little early of actual market turns.  He also called for a 22% move down in SPX in 2011 which came in at -19.8%.  Not too far off.  Here is an interesting article on his recent comments.  Too late: We’re already in a bear market  He has a great track record over decades.  Something very few can say.  I don't know how many times he has been wrong on a major market call.  I don't know of any cases, but that does not mean he hasn't missed.  He has definitely been right so many times it is worth paying attention.   


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