Monday, December 20, 2010

12/20 Daily Commentary

In reaction to a question as to whether the stock market has ever declined in the face of an advancing I1 I dedicate this post. 
I1 has only been able to confine the market to sideways movement during this down cycle. I'm not heavily shorting the stock market until early March or critical support breaks with I1 going down. QE has distorted the stock market and put it on life support.  The inability of the stock market to break critical support since the July low (except for once in November) indicates that the green light has been given to risk. 
To answer the initial question, I1 has never declined or even gone sideways when it's peak value was +5 or higher.  The March peak value is above +8. The Fed has kept the market from relapsing these past 6 months when I1 was in a general declining period with a trough just below 0.  These conditions indicate that the market will advance from 1/6 through Early March.  I'll be buying a small position tomorrow.
The dollar index rallied today and completed it's 5 wave from Tuesday's bottom at 79.14.   I sold at 80.94 at the 4:15 close based on the action of the Euro, which formed an ascending triangle today. 
I currently have an order buying DX again at 80.47, although this number will creep up through the night (blue line). 


  1. Thanks, Steve. It will be interesting to see what this market does next year. It sure looks like a top is imminent, so even though I1 says up till March, I will be surprised (and impressed by I1!) if a major correction holds off until then.

  2. Hello,i am believe you cycle is true and strong bull from 6 january,but...
    First.21 december today is a point maybe top in dow jones.
    Second.21 december to 21 january is 30 days.40% time between 6 january to 21 january.
    Siderograph bradley date 17 january near to 21 january.
    Jupiter sun aspect is 19 january.Remember this was 16 november this year,and 17 may this year.Always near floor stockmarket.Remember 6 october 2002 days after a big floor.
    Hindenburg Omen is 14 december this is 38 days after in 21 january.85% floor is not more 40 days.
    I am believe that near 21 january dow jones would are in a low after a hard down.