Today was a reaction day correcting 78% of yesterday's decline. Market is catching support on the 5-minute, 200-unit M/A.
Market appears to be falling in 5's and rallying in 3's. It can only keep it up so long before the impulses start coming together.
I am short 1% SP futures, holding 4% SDS, and 2% DZZ, the short gold.
When the market breaks the DJI M/A in the first chart it should have no trouble breaking that low. I am allowed to hold a small short position by the I1 rules governing longer holding periods. See Intro and Concepts.
The stop on my stock shorts is the 30-minute M/A +.5% on a 30-minute close.
We have 2 market days to the I1 sell signal. After 9/10 I1 will be in decline toward a temporary bottom 9/30 at 1.87. I will hold half short through to the next bottom 10/26 at -.612.
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Just a comment I posted on Daneric's site. Thanks for your posts.
ReplyDeletehttp://danericselliottwaves.blogspot.com/2010/09/elliott-wave-update-8-september.html#disqus_thread
So I1 goes negative in October for the first time this year! However, in looking at your charts showing past history of I1, there have been many years where I1 went to a much lower negative number than where it will go this year in October. Why do you think the decline this year will be much more serious than declines in prior years where I1 was at a much lower value?
ReplyDeleteAlso, can you list out the daily I1 values for September (after the 22nd), October, and November like you recently did for September up to the 22nd?
Hi pima
ReplyDeleteMy expectation for severe weather is based on the suppressed I1 over the next 5 years. The bear cycles during this period will be worse than average. The 5-wave from 2007-2009 must be fulfilled. Since we are going into 5 years of sub-par I1 the structure is consistent with long, violent 5-wave declines interspersed with short, violent 3-wave rallies. That means that the next wave is a 3, not a C.
Thanks, Steve. I appreciate your taking the time to answer questions!
ReplyDeleteI wish you great trading during these next few weeks and months!