3/19 Daily Commentary

Today was I1 bottom day and market declined into it.  Exited short positions at break-even prices.  Exited silver short at decent profit.  Repeating the 3:15 info with fuller comments.
The following is a key to my tactical use of I1. If I1 is on a buy or sell signal then I buy I1 bottoms or sell I1 tops.


I1 bottomed today at the close. This decline was not on a sell signal.  Likewise, this bottom does not constitute a buy signal (top at 4/2 does not exceed 5.5).  See Intro and Concepts for the complete rule set. 
I will never short on a buy signal nor will I go long on a sell signal.  Since we have no signal until 4/2
I will not short again until either 4/2 which is a sell signal top or DJI breaks 1.2% below its 5-minute, 380 unit M/A, which brings the flash point to 10,565 (I added a 10 point cushion).  I will recompute daily until it is violated.  The one thing that I do not want to do is miss the entry of the stock market into the 5-year period of sub-par I1 values.  See 2010 Forecast for more details on I1 long-term forecast.

The DJI came down to it's M/A and rallied from there.

At this time Nasdaq, S&P, small-caps, and financials are impulsively above their January highs.  The financial ETF IYF has recently broken out of congestion to the upside. The I1 is now in a minor, short-term uptrend.  The risk of staying short is too great without a break below key support.

Today was an outside day for XMI and DJI.  Monday will determine if this is significant.  For now my eyes are glued to 10,565.

Silver declined today to 17.00 even support.  I took profit over the weekend.  If silver breaks down from here I will go short again.  Otherwise I will wait for 17.50 top of range.