Friday, July 30, 2010

7/30 Daily Commentary

Today was the first day off of an I1 low.  Bought 2% SSO at 36.12, 36.61, and 36.41.   Bought 2% SP futures at 1088. Sold futures at 1094.75 and bought again at 1093.25, sold at 1103.25, bought again at 1101 and 1098.75.  After the close I sold 2% SSO at 36.92.  Carrying 4% SSO and 4% SP futures over the weekend. 
Stocks ran into the 30-minute SP futures M/A and backed off. 

Then they ran into the 60-minute M/A and backed off.

Nasdaq cash has a clear count as wave 4 complete of 3 up.


The Nasdaq futures count is just as clear.

Sunday evening I'll use a decline in NQ futures below 1859 to indicate overlap of wave i and, ostensibly, the end of the 5-wave up.  Otherwise I'll hold the 4% SP futures position looking for a new high to complete wave 3 (or C). 
Shifting back to the SP futures, the confirmation of this rally will occur in 2 stages. Taking out the 30-minute M/A  +.5% on 30-minute close will also likely complete the 5th of 3. With a completed 3-wave up then the market will correct. The correction cannot decline beneath 1100 or it will blow the potential for 5-wave up. If it holds above 1100 then it needs to break the old high to 1121.50 to signal that the extended run is on it's way.
EWI says that the rally is kaput and 3rd of 3rd of 3rd is dead ahead.  I am personally bearish but trade with the I1, so I have to be long.  Putting in tight stops at strategic places is how I survive.  Right now the NQ futures below 1859 is really close and important.
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6 comments:

  1. AnonymousJuly 30, 2010 at 6:30 PM

    Hi Steve, any thoughts on the Fib correlations between 1576 and 666 on the S&P? Last night I read that 1220 April high was within 9 points of the .618 (at 1228.7), 1010 July low was within 5 points of the .382 (at 1014), and the .5 is at 1121 even (seen last Tuesday).

    Odds of seeing above 1130 by 8/13?

    Josh

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  2. CharlesJuly 30, 2010 at 6:55 PM

    Frustrating day as my boss decided we needed to have an unscheduled meeting just minutes after the market opened to implement my long strategy today so missed the shot. Time to restrategize

    ReplyDelete
  3. PeterJuly 30, 2010 at 7:44 PM

    How would the abc count play into your I1?

    Would that qualify as the rise up and then could sit flat or dwindle down for a week or do you expect the rise all throughout the I1 upward motion as that would disqualify EWI forecast.

    ReplyDelete
  4. Steve KotelesJuly 31, 2010 at 6:56 AM

    Charles, you've beaten the cover off of the ball so far this year!

    ReplyDelete
  5. Steve KotelesJuly 31, 2010 at 6:57 AM

    Eastern,
    I posted the Weekly to your question. I've got to handle both horns. Trade with I1 but don't assume the other smart guys are idiots.

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  6. Steve KotelesJuly 31, 2010 at 9:25 AM

    Josh,
    Good question. The SPX has followed Fibonacci fairely well. DJI not nearly as well. The DJI hit the April high well and not much since then. I'll post SPX and DJI Fib charts in a separate posting.
    Not trying to outsmart I1 would lead to a very high probability exceeding 1121 high by the peak, and a probable exceeding 1130. I hate to fade Arch Crawford. He's not a crackpot, but spent a career on the Street. So, the 1075 SP futures level in the Weekly will probably be a short signal for me. Of course 8/13 comes around we are free to short.

    ReplyDelete

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