Friday, December 3, 2010

12/3 Weekly Commentary

After 2 weeks of inactivity the markets have reached junctures.  I1 tops Monday afternoon.  I expect commodities to peak ahead of stocks.  I now hold 2% UUP from 22.95, long Dec DX futures from 79.65, and short March gold futures from 1408.  The Euro is my stop on the dollar position, with a wave 1 low in futures of 133.44 and cash of 133.4480.  Euro futures hit their high today at 133.437.  Anything above 133.50 will cause me to exit dollar long.
I just shorted Euro by buying 2% EUO at 20.19.
I expected gold to rally to around 1420, but was not entirely certain so I shorted at 1408.  The short-term count is that wave 3 is complete and wave 4 in progress.  This gives me the opportunity to cover Sunday evening at 1415 and await final top.  I shorted silver and exited with a slight profit when it became probable that another high was due.  I shorted crude via SCO ETF expecting the old high of 89 to hold.  When it did not I exited with a trivial loss.
My biggest hole is the dollar futures position, but with Euro so close to it's wave 1 and the count looking complete I am comfortable holding.  Sunday evening will tell the tale.
Stock index futures already double-tapped the November highs last night.  Monday should see the cash indices tapping them as I1 peaks.  I'll go short in the afternoon on a challenge of DJI 11450.  If the rally pierces this level in the morning I'll stand aside.  If I short stocks I'll also short crude or buy the double-short ETF.


  1. When you say you expect a bottom well above last weeks lows, is that for I1, the stock market or both?

  2. It seems that your forecast is very similar to a wave 4 down and wave 5 up into March / April, like the EWI forecast. I know you came at it independently though.

    Is that a correct interpretation? Higher low than early November in risk assets, then a rally into the spring making new highs?

  3. Copper
    Risk off?
    Have a great weekend.