Monday, January 31, 2011

1/31 Daily Commentary

The fear factor was removed from the markets today.  I sold 2% SSO at 50.16 when SP futures hit their 30-minute M/A to bring me down to 2%. 
I count 3 down in SPX and DJI.  DJI has not broken critical support and I1 is up.  If DJI breaks 11,793 then we will have a new ballgame, but until then I have to play the bull side.

I bought 1% DX futures at 77.89 but the dollar is not behaving like it's ready to rally.  I sold this position at 77.87.  Instead I'll use M/A violation to enter long.  The green line +.48%.

I'm still holding 2% EUO short Euro.

1/31 11:10

The dollar lows have held.  I'll buy more EUO if Euro futures 136.90 is broken.

1/31 10:15

The key level is 11,793 but I'm giving it 5 points beyond until the politicians shut up about Egypt.
The Nasdaq did a fake-out to the downside, making a nominal new low. 
Dollar is stable and should not make new lows.

1/31 8:50am

Still holding the dollar.  The dollar rally on Friday was Egypt fears.  If there is no systemic basis then the dollar will fall to new lows and back to waiting for a real rally to emerge.  Dollar low at 77.705 should hold and 77.695 is the stop.
DJI taking out 11,788 will mean the dollar should be in a bull market.

1/31 8:30am

Bought 1% DX futures 77.89, stop 77.79.

1/31 pre-open

Spike and reversal occurred as the Egypt risk is being unwound.  My only positions are 2% EUO short Euro and 4% SSO.   The long stocks will be unwound if DJI declines beneath 11,788 and longs will not be initiated at any time once this level is breached until the I1 turn or DJI rises 1.35% above this M/A. 
My strategy is to trade in the direction of I1 and in a rising I1 to look upon a return of price to critical support M/A, this M/A -40 points, and near the limit of the envelope as buying opportunities.  I came into Friday flat stocks and did not buy at the M/A or at -40 points.  I waited until price came to within 25 points of the envelope extreme to buy because SPX and DJI have completed wave counts off of the July low.  The rising I1 suggests either an extension or a 2 month period of topping before the downturn. 
I'll take profits on SSO at the SP futures 30-minute M/A, currently 1284.47.  Having the 11,788 level so close means limited risk.

Sunday, January 30, 2011

1/30 3:00

The Saudi exchange closed last Wednesday for it's weekend.  It re-opened Saturday and closed with a 6.43% loss.  Sunday's close was up 2.46%.  The Saudis have larger interests in Egypt and so have wide swings with the Egypt story.  SPX was down 1.8% Friday while Saudi Arabia was closed.
No news in Egypt but the streets are calmer.  The stock market came down to the limits of critical support Friday with a low of 11,803 vs. a support break below 11,793.  SP futures came down to the limit of their range 1271 but held there.  Sunday trading is thin so there has to be some allowance for that.  SP futures hourly M/A envelope still extends to 1271.   YM futures has an hourly M/A that extends to 11,718.  Since the DJI has been stronger than SPX it makes sense that it should have a lower envelope.  This allows for thin trading spike and reversal.  However, since the Saudi market rebounded Sunday I am hoping that there will be a snap-back in the U.S.
Currently 4% SSO and 2% EUO, if YM futures exceed 11,718 I'll look to short them in order to offset the SSO.  On the bigger picture both SPX and DJI completed their wave counts allowing a completion of the rally from 3/2009 to be contemplated.


Saturday, January 29, 2011

1/29 Weekly Commentary

The Food Dominoes
The U.N.’s Food Price Index surged to 214.8 in December, exceeding the previous record in 2008 when rising costs and fears of shortages sparked riots from Haiti to Egypt. More than 100 people have died this month in protests in Tunisia against food inflation, unemployment and alleged corruption, according to the U.N., and at least three were killed in Algeria.
Since U.N. index was published food prices have continued to increase.  Tunisian riots emboldened the Muslim Brotherhood to spark the Egyptian riots, since Egyptians face the same impoverishment from food and energy price increases despite the food and energy subsidy programs.  The food program sells basic commodities at much lower than market prices but the subsidy prices has been rising with the market.  The result: the poor are being hit disproportionately in the third world and the developing economies as well.  Take it to the streets!
The linkage to Fed policy is direct.  QE and QE2 and FOMC policy, by creating a mountain of reserves, have kept short-term yields at zero and depressed the dollar.  This free money has been exported either directly by speculators or indirectly by sanctioning similar policies at other central banks.  Central banks and their governments have been taking action to sterilize the Fed policy by creating their own fiat expansions.  The Fed has directly exported inflation to all other nations because of the status of the dollar as the reserve currency.  Unbelievably, this is Ben's intent!  He believes that by forcing Asian countries to accept revaluation of their currencies that magically factories will be built in America.  News to Ben: those factories are gone, never to return, until American society is rebuilt on the other side of this debt crisis.
Obama now wants to cut Egypt's foreign aid unless they allow the rioters free reign.  Yet, food subsidy takes 4% of Egypt's total budget and they have in effect reduced the food subsidy by not increasing it in line with market prices.  Energy subsidy takes 15% of the total budget, so their budget is inadequate to the task of keeping pace with the flood of cheap dollars.  The food subsidy was decreased in the 2010 budget but the decrease was removed in the 2011 budget after the outbreak of the Tunisia riots.  However, these funds have not yet arrived in the streets. The Egyptian budget deficit will be 8.3% of GDP and is unsustainable over the long term.  Yet, our rates are still at zero and the Fed is creating new fiat reserves on a daily basis under QE2.
International prices for basic foods priced in local currencies:

This madness is ending with QE2.  Target June, with the markets peaking in April.
I believe that if Mubarak falls that the new government will immediately or in short order be controlled by the Muslim Brotherhood with a massive 46% of Egyptians below the poverty line (by Egyptian standards) and is higher than during Sadat's government. The M.B. assassinated Sadat but did not get their government in the last time it turned over.  This is not an environment for a sustained democracy.  So the market's fears are real.

Friday, January 28, 2011

1/28 Daily Commentary

I came into today flat stocks and holding EUO the short EURO ETF. 
Today was an event market with Egypt holding the stage.  Fears of Suez Canal closing, fall of government into radical hands, etc.  The DJI declined to within 10 points of critical support.  Gold rallied $20 and the dollar rallied as the fears penetrated these markets.  What happens if nothing happens over the weekend?  As in any news market when the news stops beating the drum then the markets revert to the mean.  Egypt followed Lebanon and Tunisia into the band of hungry, desperate third world countries hit hard by spiralling food prices.  Corn and Wheat have doubled in the past 6 months and governments with subsidy programs are hard pressed to keep the poor fed.  With high unemployment to begin with the flood of fiat dollars has decimated the third world.  It's hard for Americans to understand the impact of higher food prices on the third world.  Food there accounts for a much higher proportion of personal income, even of those lucky enough to find steady employment.  This is reflected in their national income as well.  Unintended consequences of Fed policy.  Not my fault.  Who could have known that I would radicalize 30 governments in the third world and alienate the U.S. from them on fundamental beliefs?  While the Muslim Brotherhood is not violent against the west it is no lover of them either.  No fence-mending would bridge the philosophical chasm starting with the firm belief that Allah is destined to rule the planet.

EWI is praising this as the first stroke of the mega-bear.  I1 says otherwise.  The DJI never hit 11,793 so I'm holding 4% SSO over the weekend.  Overnight session holds less predictive power than the day session.  However, If the YM futures (the mini-DJ) fall below 11,718 then I'll look to short them to offset the SSO.   They closed at 11,762.
If this happens and the DJI trades below 11,790 on Monday this will be the first period of the DJI trading within a bearish envelope since early July.  I think holding the SSO on the importance of this level is justified with a rising I1.

The dollar traded up on the Egyptian chaos.  I count 5 up from this morning's low and this 5 could be either a higher-degree 3 or C.  In the rally the dollar index crossed it's first hourly M/A which normally would have caused me to buy and hold.  In a news market I would prefer to see what happens on the expected pullback and see if Egypt calms down.  Mubarek will form a new government Saturday.  If he increases food subsidies these moves may be enough to appease the majority.  Bellies first, minds a distant second.  I hold 2% EUO.  A pullback of the dollar index to 78.06 will be a buying opportunity.

1/28 2:00

We got what appears to be the final low to complete the wave count.  Stop remains below 11,793 and SP 1271.

1/28 1:15

DJI 11,793 and SP March futures 1271 are the levels to watch.  I still expect a nominal new low to complete the count, but I'm in 4% SSO.   If the world turns to crap due to the pressures of high food and energy costs then it will spread beyond the middle east. 

1/28 12:35

Bought 3% SSO at 49.74 to bring me up to 4%.  Stop laid out in prior post.

1/28 12:30

11,793 is the critical point.  SP futures 1270 will confirm.  Both are very close.  If we get both I'll need to look for shorting opportunities.  However, until then this becomes an opportunity to go long with a short stop.

1/28 12:10

The dollar index looks to have completed it's 1st 5 up.  This should correspond with a bottom in the stock market.  I show possible 1 more low.  I pared SSO to 1% selling 1% at 49.65.  If we get a final low I'll buy back in.
Critical support break occurs at 11,793.

1/28 11:55

Bought 2% SSO 49.82.  Any new low DJI gets me out (11,845).

1/28 11:05

I bought and sold DX for 78.27.  It completed a 5 up.  So I'm looking to buy pullback to 78.05.  Confirmation will be when Euro breaks 136.02 on the downside.

1/28 10:23

Critical support breaking point is 11,793. 

1/28 10:15

I exited the gold short last night at 1314.
Current dollar index buy stop is 78.27.

1/28 pre-open

Current dollar index buy stop 78.285 basis March.  
Covered gold short last night as soon as I walked in the door.  3 down complete.
Ex-inventories the 4th qtr GDP looked OK.  Of course with this much money sloshing around....
Riots and government turnovers in middle-east are directly related to commodity push.  We don't feel it as much but in the less-developed economies food and energy are a big part of disposable income.  I've noticed substitution occurring here.  Gold and gold-filled are being discontinued in jewelry supply wholesalers.  Cotton is being used less in clothing.  Costco no longer carries pine nuts due to cost and a raft of other products are just not being stocked due to cost increases.  It inconveniences us but it kills the third world.  Egypt, Lebanon, and Tunisia are in serious trouble.  The media is not connecting the dots back to Ben, but they're paid to be stupid.
Stock market is still having to prove that it can extend a completed wave structure.

Thursday, January 27, 2011

1/27 10:30pm

Just got home.  Gold got down to 1308.8, close enough to my 1308 target and limit order.  Changed order to 1314 and covered the short.

1/27 pre-open

I'm in a hotel but the bandwidth is not good (too far away from the server).  I've kept the gold short because the count still indicates a final low, looking for 1308.  Stop 1353.5.
Dollar index order buying 1% at 78.40 stop.
XMI and SPX stopped at old high yesterday.  All indices show 3 up, so it pays to wait.  I'll short only if DJI 11,890 is broken, critical support.  I'll be running around all day so I don't want to get into something I can't follow.
Have a great day.  I'll get back tonight. 

Wednesday, January 26, 2011

1/26 11:45

I have the 2011 forecast page on the blog.
SPX at this point looks like a 3 wave up, irregular flat if it takes out 1291 on the downside.  DJI and XMI are 3 up as well and have already dropped below their wave 1(A) peaks.  XMI stalled at it's old high and exceeded it by less than half of a point.
Critical support has moved up to 11,907 and will only be broken by a decline of 160 points.

Gold is declining again and the target is 1307, a daily M/A.  The stop is 1339.60 but is moving down. A completed 5 down will take me out early.
The dollar has two hourly M/As (green and blue) with the first trigger at 78.23, good for a run to 78.38.

1/26 pre-open

Today is Fed meeting,  2:15 announcement.   I1 is rising.
State of the Union called for drastic budget cuts and a halt to earmarks due to the looming fiscal crisis and major investment in education, infrastructure, and basic sciences along with energy.  When a politician presents such a blatant obfuscation he falls on the old standby, the budget freeze.  There have been many freezes instituted by the inept in the past.  They fail to deliver the savings proposed and drive out what few productive workers remain.  The debt ceiling will not be raised in the House without much more cutting and this will be oblivious to whatever budget the president sends down.  Surely they will do the freeze but that is a small part of what Tea Party wants.  They don't have to negotiate with the Senate, all they have to do is block the ceiling increase by vote in the House and the Senate will come to them.  The president has no control over earmarks.  So in several ways this is the first real test for these freshmen Tea Party congressmen to resist the siren call of appeasement from their elders.  The pressure on them will be tremendous.  Let's see what they are made of.  If they hold up then the Republican party will no longer treat their platform like toilet paper (at least until the next election).

I will be leaving for Albuquerque at 2:00 EDT for doctors.  I'll return tomorrow.  So I'll miss the Fed announcement fun.  To clear the decks I bailed out of SSO right after the close yesterday...oops.  However, if EWI is right then SPX will not make a new high and DJI will stop at 12,035 (wave 5 equal to wave 1).  So far SP futures have made a new high by 2.75 points but my eyes will be on the cash market.  If SPX impulsively takes out it's old high then the stock market will extend another 2 waves in line with what I1 expects. 

The dollar fell somewhat overnight and it's hourly M/A has declined to it's current 78.41.  Adding 24 points give me my stop buy.  The equivalent M/A in the Euro is 136.24 and rising.

Gold still respects it's 10-minute M/A and my stop is now 1341.

I don't know if any of you have noticed but I updated my Trade History and am keeping it current.  Today I'll be working on the 2011 forecast and hopefully will complete it by the time we leave.

Tuesday, January 25, 2011

1/25 Daily Commentary

I1 is rising to a high value in several weeks.  I am looking for buying opportunities with tight stops.  Tomorrow is Fed meeting day.
Short gold futures, long 2% EUO.  I sold the 4% SSO in ARCA at 50.51.
I came into the day only 2% SSO and the stock market sold off.  Bought 2% 50.20, sold at 50.42.  Bought 2% again at 50.04 and am holding on. 
I came in flat currencies and bought EUO at 19.32 when the dollar sold off to it's lows.  So a flat day for currencies.
I believe that gold is in a 4th wave with one final low before a significant bounce.  Daily M/A is 1307 tomorrow.  The stop currently is 1342, which is above the wave 1 low.
EWI believes that the market is done.  I1 says otherwise.  One case in point:  The DJI completed what appears to be a 5 wave up from 11,744.  Yet, clearly there is a probability that this wave merely wave 3 on a higher order (namely the sequence starting at 11,700). 

The SPX has the clearest completed 5 up.
Discretion being the better part of valor, the SPX came up to it's prior interday high and DJI came up to it's old high.  I sold the SSO at 50.51.  If the DJI rallies past 12,050 I'll look to buy it.  If DJI declines to critical support I'll buy it.  Regardless, I cannot short until critical support is broken, currently at 11,735 but climbing.
Long dollar/shortEuro will be how I'll trade a potential stock market decline.  I1 has been supporting stocks and suppressing the dollar, so this has been dicey.  Without a stock position long dollar will be naked.  I'm currently holding 2% EUO.  The most conservative strategy is to wait for the dollar to break it's first hourly M/A by 24 cents.  This M/A is currently at 78.51 but is declining through the night.

1/25 2:35

Still holding 4% SSO.  SPX triple-zigzag from yesterday's high.  The low was 1277.  Stop below that.

1/25 11:40

Gold looks to have one final decline.  In a triangle 4th wave now.  It could stay here for a while.  If it fakes me out my stop is just beyond the 56-hour M/A, make it 1342.

Long 4% SSO and 2% EUO.  Will sell EUO at the DX hourly M/A, currently 78.56.
Stop on 2% SSO at SP March 1277.50, which is nearby.

1/25 11:20

Bought 2% SSO at 50.02. 

1/25 10:15

Crude looks to have one more minor low before completing abc to the downside.
I sold 2% SSO at 50.42 and bought 2% EUO at 19.32.  I'll enter DX when hourly M/A is broken to the upside, currently 78.705.

1/25 9:35

I bought 2% SSO at 50.20 to bring me back up to 4%.  My stop is ES futures 15-minute M/A minus 3 points, but this is right at a cluster of support so make it 1277.50.

1/25 pre-open

Sold DX futures before I retired for the evening at 78.185.  While I wished I had held I need a bit of a life as well. 
3-waves predominate in the Euro and dollar.  I sold EUO at 19.60 when dollar index reached it's hourly M/A 78.575 and plan to buy it back and buy DX futures at 78.72 stop or 78.215 limit.

My gold futures short has really been working.  I haven't spent much space talking about it because I don't want to hex the trend, just let it go to my target of 1306.

The wave count is a completed 4th from the 1352 high, was itself a 4th wave high.
I exited the bulk of my stock longs yesterday afternoon.  I just bought back 2% SSO at 50.20.

Monday, January 24, 2011

1/24 3:45

Dollar index formed a triple zigzag.  Looking to exit at 78.185.

1/24 2:40

Target on the Euro in 136.  Target on DX is 78.35.  I'll sell DX and EUO when these are reached and wait again for an hourly M/A penetration.  Stop 78.11.

1/24 2:11

Bought 1% DX 78.20.

1/24 1:45

I1 is unmistakeably in a rising trend to much higher levels.  I cannot short even at DJI round-number 12,000. 
Dollar buy trigger has moved down to 78.21 on a 1-minute close.

1/24 1:45

The rally in the dollar was a double-zigzag and terminated at the 1-minute, 260-unit M/A.  I'm disappointed that an impulse was not achieved, but I'll still re-enter on 7.5cents 1-minute close beyond this M/A.  Currently 78.23.
The decline in Euro was also double-zigzag.
I'm short gold which is in a 4th wave down.

1/24 1:15

I exited the bulk of long stock ETFs because of the behavior of SP and NQ.  While the Dow was running away to the upside SP futures were merely approaching a lower high.
Nasdaq futures are only now approaching declining hourly M/A:
The DJI has either completed it's daily impulse or will extend on a minute basis to complete it.  In short, the odds favor standing aside.
I sold DX at 78.17 at the red line 10-minute M/A.  I'll re-enter on this M/A (the 1-minute, 260-unit) on a 1-minute close 5.5cents beyond (currently 78.225).

1/24 12:40

Selling DX at 78.205.  Buying back at 1-minute, 260-unit +7.5cents on 1-minute close.

1/24 noon

Sold 4% SSO 50.42, leaving 2% long.

1/24 11:50

I'm still long DX.  Stopped out at 77.97, back in same price.  Confirmation at 78.155 short-term.
Long 6% SSO, short 1% GC futures.

1/24 11:20

Still long DX, stop 77.97.

1/24 10:53

Bought 1% DX futures 78.005.  Stop 77.985.

1/24 10:45

Bought 2% EUO at 19.34.

1/24 10:30

The dollar index is now pointing the way.  The count has clarified and 1 more low is required to complete the 3 down from the 81.+ high.
Price has again moved away from the nearest hourly M/A (red line) so I'll use the count and the 1-minute M/A to show the way.

1/24 10:00

The DJI is still leading the stock market and is clearly ending a 4th wave, probably in the 5th already.
Critical support M/A is a 11,825 with a break only below 11665.

SPX has strong support at 12281.50.

1/24 pre-open

No trade in the Euro.  I slept during the breakdown.  Meanwhile in the dollar index the key M/As have been creeping downward.  A key M/A at 78.635 is the 10-minute buy signal.  The hourly M/A is now at 48.77 with a buy signal at 79.01.

Sunday, January 23, 2011

1/23 7:40pm

On the Euro I'm using the 15-minute, 35-unit simple M/A -15cents as my short trigger.  Trigger currently at 135.76 but is moving up.

Friday, January 21, 2011

1/21 Weekly Commentary

The rally from this morning's low was not impulsive.  For the Nasdaq there was no rally and prices closed at yesterday's lows and at important support.  Nasdaq needs 1 more low to complete it's abc from Tuesday's high.  AAPL has weighed down the Nasdaq this week.
On the other end the DJI is forming what appears to be a triangular 4th wave to complete it's up sequence.  This chart is bullish for Monday.
Critical support M/A is now at 11,820 with a break level of 11,660 and rising.
In between the S&P shows signs of strength and weakness.  It closed near a confluence of important short-term M/As.  This configuration allows for a slight downtick Monday morning to give the Nasdaq a chance to register it's ideal low.  SP futures breaking 1266 would be a strong signal to lighten up.

I currently hold 6% SSO and am short gold futures.  Rather than short the stock market once this 5 wave is complete I intend to short the Euro.  I1 is up well into February.  A Euro short will be on the same side of the risk asset scale.  Both the Euro and dollar index moved farther away from their hourly M/As which means I'll need to use less reliable shorter-term M/As to initiate the trade if I want to get into the market before some of the technical ammunition is used up.

I'll be going short Euro Sunday on a decline below 1-minute, 157-unit M/A minus 20 cents.

Gold short is working well and is another alternative to a stock short.  The level of bullishness reached fever pitch and will take more time and decline to wear off.  This market is in a 3rd of a 3rd.

Stop is above 1370.

1/21 2:05

I did not short Euro.  The diagonal never completed prior to a decline.  I'll short on breaking 1-minute, 157-unit M/A.

1/21 2:00

Euro is about done with a diagonal triangle.   I've marked the v position at the start rather than the end of the diagonal because of space.  I more high, shorting at 135.99.

1/21 11:30

I1 is up until Feb 22.  The decline shows as only a tiny downtick until 3/4 but I'll be out during it and then back long to catch the final I1 top.
It appears SPX and DJI have started their 5 wave up.  SPX wave 3 high 183.35 should hold.  I'll be selling at the top of this one.  I don't believe this top will be the "Big One".

1/21 pre-open

I sold 2% SSO at 50.17 when SP hit one of it's hourly M/As.  I still hold 6% SSO.

While I don't have a position in crude, it appears that support is at 8780 basis March futures.  Crude is following the stock market which is betting on dollars finding their way into speculator's pockets from the giant whoopee machine.
I'm currently short gold futures with support around 1305 on the daily chart.
The dollar will turn bullish on a 24cent penetration of it's first hourly M/A (blue line):
I am currently flat currencies.

Thursday, January 20, 2011

1/20 Daily Commentary

My wife and I were in Socorro today getting tests and shopping.  Currently short gold futures, long 8% SSO.  Since I was going to be in the world today I decided to limit my futures activity by placing extremely tight stops on NQ futures and Euro futures overnight.  These were hit with nominal loss.
I still want to go short Euro or long dollar.  The criteria in each market are similar.  First the dollar rallied to the upper envelope of the first hourly M/A, the 91-hour, which has an envelope of 23 cents at current levels.

Even a tick beyond the 79.35 high will confirm a run to first resistance at 80.
Conversely, Euro declined to just below it's primary hourly M/A, the 73 hour, with an envelope of 61 ticks at current levels, yielding a 133.53 trigger at present.

The large topping/basing process in currencies has allowed these hourly M/As to catch up.  The dollar will pull it's trigger first so I'll key off of that and use the Euro as confirmation.
The stock market declined to 45 points within the critical support envelope, a common stopping level.
Yesterday's decline was murky in blue chips but plain in S&P.  Today's rally was countable in S&P but was plain in the XMI (5 up). 

With I1 up I will only part company with stocks when DJI critical support breaks, currently at 11,645.
I'm shorting gold due to it's clear 3rd of 3rd wave count.  I posted in the past that precious metals have 2 different sentiment gauges that usually agree.  The current juncture has different bottom dates.  I normally favor the new (improved) flavor but the original has a decline into February and with the wave count I am using it.

I have not been posting any economic commentary since I1 turned up.  I have to function in an Alice-in-Wonderland environment with magic carpet levitation of the stock and commodities markets.  When I am ready to short the stock market I'll return to my normal, pithy self. 

Wednesday, January 19, 2011

1/20 1:25am

Shorted Euro 134.74, stop 134.85.

1/19 9:05pm

5 wave down in Euro complete.  Covered Euro short at 133.25.  Stock index futures should rally here in concert with Euro.  Bought 1% NQ at 2295.50, stop currently at 2293.  I'm using a 11-minute M/A minus 2.25 points for this trade.

1/19 7:55pm

Went short Euro 134.44.  However, there is only one more low before the 5 wave from this morning's high is complete.

1/19 Daily Commentary

Came in today with 4% SSO, having sold 2% yesterday near the close.  The stock market marched downward all day.  The following chart shows my 2 entry points today, the first (green line) was sold out for no loss when a 5 down developed.  The second (blue line) stuck and I bought 4% in the final hour at 79.66.  So I'm 8% SSO.
This should be the bottom of the wave 4 I've been expecting.
Those of you reading this blog know I've been keeping in and out of long dollar or short Euro.  Today this trade stuck and I made money shorting Euro using a 1-minute, 67-unit M/A and 157-unit M/A.  I'm currently out waiting on a 20-cent break of the 15-minute, 90-unit M/A (green line) currently at 134.55, giving a trigger at 134.35.  I have a positive sentiment gauge for the dollar so I'm using the currency/stock market correlation to play opposite ends of the risk spectrum. 

I'm short gold from 1372.40, which I believe is on the cusp of a larger decline.  Breaking 1366.40 basis Feb futures should kick the legs out from under it. 
Caveat:  I1 is up which is bullish for all risk assets, Euro included.  I'm offsetting long stocks with these other markets.
Here is the I1 for the next 3 months:
20110119 11.4923

20110120 13.90587

20110121 16.33031

20110124 18.86588

20110125 21.5293

20110126 23.26398

20110127 24.94553

20110128 26.78996

20110131 27.08342

20110201 28.07677

20110202 28.24126

20110203 28.64861

20110204 29.44478

20110207 30.08323

20110208 30.98431

20110209 31.61372

20110210 32.7958

20110211 34.23365

20110214 37.53806

20110215 40.75786

20110216 43.77328

20110217 47.36712

20110218 50.57693

20110221 52.17321

20110222 52.59504

20110223 52.23759

20110224 52.12646

20110225 52.30561

20110228 50.78321

20110301 49.95083

20110302 48.75886

20110303 48.7545

20110304 48.60954

20110307 48.91933

20110308 50.65648

20110309 53.18327

20110310 55.83762

20110311 58.13648

20110314 61.86496

20110315 65.04965

20110316 68.23689

20110317 71.06565

20110318 74.00252

20110321 78.1513

20110322 81.3552

20110323 84.10808

20110324 85.52601

20110325 86.05031

20110328 84.2088

20110329 80.85115

20110330 77.50088

20110331 74.00951

20110401 71.06763

20110404 69.29059

20110405 68.73553

20110406 68.67549

20110407 69.01423

20110408 69.86341

20110411 71.74323

20110412 72.75928

1/19 3:01

I was short 1% Euro futures, covered at 134.50.  I'll short again when the red M/A is broken by 30cents.