6/29 Daily Commentary

Minute iii down is complete.  Therefore, we are in Minuette iv of Minute 1 of Minor 3 of Intermediate 1 of Primary 3.
I sold my SDS at 36.70 and covered my SP futures short a point away from the bottom on a clear 5-wave completion to 9812.  Normally I would expect a timid bounce or a triangle for Minute iv.  However, the market indices are burrowing deep within a make-or-break support zone for the bulls.  I've talked about this before, but the entire psychology of the market will change on a clear break of lows that have been hit 4 times since February, especially when the lows form a clear head-and-shoulders neckline. The market has not had even a 1.5% rally since the decline started 6/21.  Sentiment has been absolutely smothering this market.  I'll be looking to put on short at 9,920 and 10,000 for the final move to Minute v.  
I1 is on a formal sell signal. There are 4 trading sessions through the I1 bottom 5/5.  Since 5/5 is a holiday I will be looking for the low mid-day on 5/6.   This cuts it down to 3.5 sessions. This is about the right amount of time for Miv to complete and Mv to go to a new low below the Feb and May lows, fooling the most people at the critical moment. 

I have had smaller short positions than I would prefer but have made good money through the decline.  My normal mode is to watch for counter-trend moves near logical stop prices and add to positions while maintaing a core position with the I1 trend.  This has served me well through my trading career, but this decline has seen consistently muted rallies.   Thus, another argument for a snap-back tomorrow, because the market lures people to expect the abnormal to continue, while it sets up to revert to the mean. The final argument for a snap-back is that Minute ii was a triangle, unusual for a 2nd wave.  Alternating points to a zig-zag for Minute iv.