Friday, December 31, 2010

12/31 Weekly Commentary

In the stock market there remains 1 small pop Sunday night to complete the late rally.  The old high is 1258.50 so I'll short there.

I1 peaked today and will decline through 1/10. 
I bought DX futures 1% at 79.235.  Cash dollar index exceeded it's 12/14 low by 6 cents.  However, Euro was well below it's 12/14 high.  Since the dollar index is an amalgam of currencies I have turned to using the Euro to understand the current environment.
In the Euro I have changed the count to a simple abc from the 12/23 low at 1.3050.   It peaked today well short of it's 12/14 high with what appears to be a completed count.  I expect initial strength in the Euro in the Sunday session corresponding to the pop in the stock market, giving way to weakness.
Gold and silver should decline with the stock market next week.  I am still short gold futures and hold 1% ZSL.


  1. I appreciate your comments and I find them very helpful. I too see the pattern developing for a short in Gold and Silver, but wonder about the expected drop in the general stock indexes may produce one last push upward for both of them. I expect the same thing with Bonds (TLT), but the pattern in TLT is already showing a ABC correction after the five wave move down from the Aug 2010 highs. So a rally in TLT while the stocks drop would make sense under the Elliot Wave Theory.


  2. My Resolution: Learn some Chinese.
    Happy New Year!

  3. Hi Dennis,
    I am more confident about short gold/silver now that I1 is in decline mode. They should follow, rather than buck, the stock market.