9/14 Daily Commentary

Stocks rallied early on reflation speculation.  The rally triggered my futures stop and I also sold 5% SDS at a slight loss.  I traded back into futures and more than made up the difference in a couple of trades.  Looking at a DJI chart one can see the triangle forming yesterday and the breakout upward today. The rally did not get anywhere near where the breakout should have taken prices. 
Legging into a position on I1 turn dates can be done one of two ways, waiting for confirmation or taking position against trend.  The latter is more stressful but yields the better overall results.  It needs to be done with stops, however, and the Basel announcement meant that buying pressure was steady yesterday and most of today.  I1 is trending down but it is still stressful going against these reflation waves.
It was important for the DJI to close not far above the downsloping trendline from 4/26.  In fact it closed comfortably below it.  The DJ and SP 30-minute M/A has propelled the market higher over the past week each time it has been touched.  Prices closed at or near this M/A.

I currently hold 9% SDS.  I covered my short 1% DJ futures position at 10,460. The 30-minute M/A has moved up to the point that I will key off of a .5% break below this M/A on a 30-minute close to short futures and increase my ETF position.  Currently at 10,472, this implies a shorting threshold of 10,419 basis Dec DJ futures.  However, this will move up throughout the night.  Until this is broken I can't be sure that the reflation pressure is finished.