Tuesday, April 6, 2010

4/6 Daily Commentary

The DJI was marginally down for the day, while the S&P was marginally up.  This is a top within an I1 sell signal which indicates it will not last long.
Looking at the sentiment numbers for last week we had a bell-ringer event, the Investors Intelligence bullish % hit 70.  This is and has been the kiss of death for stock market rallies.  This alone convinces me to carry a portion of the short position past next Tuesday.
The S&P cash and futures indicate 1 more minor new high overnight.  I am currently 7.5% short at close to current prices.  Futures are in final wave and the target is less than 1190.  This should carry over into a positive opening for the cash session.  If, on the other hand, futures decline beneath 1177 then the top is in.  I1 is telling me that this is the final rally for the move from Feb. 5.  Here is the futures wave count:

Should the rally not develop then a decline beneath 1177 futures will indicate that the entire upmove is over.
Silver is also on the cusp of decline.  An hourly close < 17.83 will indicate that the silver rally is over and it will turn down with the stock market.


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