4/24 Weekly Commentary

Currently flat all markets.  In the stock market I am awaiting the 4/29 top.   Once the top is in then I will have the green light to begin shorting commodities and going long the dollar.  Patiently waiting is hard work!

We got the breakout mentioned in the 4/21 Daily.  We have 4 sessions left.  This is about the right amount of time to rally 150 points by close Thursday.
Now that the 4/29 sell date is approaching, an Elliott wave count is appropriate.  The following is Nasdaq Composite from the 2/5 low:

Here is the S&P 500 (SPX) on a closing basis:

Pretty clear we are in a 5th wave breakout from a 4th wave triangle in both cases.  The completion of this 5-wave will complete the triple-zigzag from the 3/9/2009 low.  So, I1 kept me from shorting early and now, with a clear wave count, I can count my way to the top. 

Initial downleg from the I1 4/29 top targets 5/11 bottom.  Since the bounce from 5/11 is less than .50 I will not liquidate the entire short position, but hold a small short through this minor I1 uptick all the way to the 6/8 bottom.

Got flat silver when May futures hit 18.13.  .7% beyond the 90-minute M/A:

The top date is 4/29 for initial decline into 5/11.  The longer-term trade is short into 6/8.  The raw I1 points the way into the turn dates in the 2010 Forecast.  The current I1 chart:

I slow the I1 with a 55-day simple moving average to isolate longer-term moves.  Because of the smoothing the turn dates are late, but the turn dates should be derived from the raw I1.  The smoothed I1 indicates that this final rally is accompanied by a flat smoothed I1 and is followed by a 3-month decline.  The bottom of this decline in the raw I1 is July 5th.  However, due to the July 4th holiday and the strong seasonal advance on the day prior, I will be liquidating shorts 7/1 for a rally into 8/13.  As can be seen on the smoothed I1 chart, the decline after this rally is steep and is not due to bottom until 11/15 in the raw I1.
The smoothed I1:

Any wave counts are my own. Elliott wave theory is an integral part of my trading. For information/training/books on Elliott wave see Elliott Wave International.

Notes on the chart labelling:
My labelling of the waves does not include the appropriate numbers and letters due to the restrictions on the blog editor (and my keyboard). Circled numbers and letters are not possible in this environment. Wave labelling is strictly for clarity in analyzing the short-term structure.  If interested, wave degrees are on page 27 of Bob Prechters's book "Elliott Wave Principle".