Thursday, September 23, 2010

9/23 Daily Commentary

I worked for 20 years to become a slave.  I have a simple job.  My job is to make I1 happy. To get out of it's way. To let it call the shots.  I1 is down on a formal sell signal.  Simple as that.   

I increased my SDS position at the best price of the day.  I went short SP futures last night at 1125.75.  This brings me up to a level that I normally would only carry after the 5-minute,   380-unit M/A were broken.  My current level is 32% SDS, 1% DJ futures, and 1% SP futures.
My trading discipline has 3 levels of positions:

a) I1 turn date. Put on 4%-8% double short ETFs and 1% futures shorts
b) Breaking the 30-minute M/A SP futures (which we did Wednesday). 15%-30% ETFs, 1% futures
c) Breaking the 5-minute, 380-unit M/A (the toughest nut to crack. 40% ETFs, 2% futures.
This support break has not occurred yet but will at DJI 10,560.  Consequently, on the road I concluded that I should reduce exposure until this critical support is broken.  I covered my SP futures at 1118.75.

The action today could be reflected in the SPX chart.

I count 5 down from Tuesday's high followed by today's upward correction, followed by an incomplete wave down.  Lower prices are ahead.  Signing off until the pre-open.  No futures orders overnight.

1 comment:

  1. Steve

    Durable goods orders are down but bigger then that congress has decided to wait until after the mid-term elections to discuss any possibility of extending Bush tax cut, to me that’s more uncertainty and there is nothing in the news that could change the direction of the markets and I1’s directional view. Looks like we just bounced back up to the top of the current trading range. Have a great day; the close will be the teller.

    Jack C