Thursday, December 2, 2010

12/2 Daily Commentary

Price and time are approaching a short-term reversal.   11/5 was an I1 peak sell signal date.  SPX intraday high on 11/5 was 1127.08.  DJI intraday high on 11/5 was 11451.43.  So DJI is 90 points from it's high while SPX is only 5 points away.  Monday afternoon is the next I1 peak day and I expect strong resistance at these highs.  The following decline should take until 12/21 and bottom well above last week's lows. 
The technical composite ratcheted off of it's bearish level during last month's decline.  It hit -21 at the early November top. Currently it is at -11.  Before this rally is over in March I expect this composite to exceed the -22 signal level and perhaps hit the baby-and-batchwater -32 level. 
I am still waiting on silver to launch it's last rally to above $29.  Today it touched $29 but fell back into the trading range that I am counting as wave 4.  Gold more clearly suckered the bulls with a false breakout from it's 4th wave.  Gold should exceed $1420 before it's done.
Crude is rallying with stocks so I prefer to wait until Monday to short it.


  1. Copper

  2. DJX
    Keeping it simple.

  3. A funny, but not inaccurate way to look at the antics of Bernanke et al., is as "Cargo Cult Finance". If they just keep at it, growth will return.

  4. A $30 rally in gold would imply 50-80 cents in silver. That is huge. You expect that today and Monday?

    Subsequently do you think we could we get a significant correction in the precious metals to last December with only a mild correction in stocks akin to last December?

  5. One definition of insanity is continuing to repeat the same actions expecting different results.
    The only reason there is correlation between metals and stocks is fiat flood. As these markets peak that correlation will break down.
    Right now gold is clearly in a 4th up. The rally out of that might not make 1420, just a target. I am shorting gold at 1408 and I'll just carry it the last $12.

  6. Look at cotton. Double top coming?