Wednesday, March 23, 2011

3/23 Daily Commentary

Only 2 more days until I1 peak.  I1 and Elliott wave remind people of the free will vs. destiny debate that targets any investment approach.  (I substitute "exogenous" for free will to make the analogy with theology).  Academics, almost to a man, subscribe to the random-walk thesis, that future prices are not discernable from past events.  That's because academics have bad investment records and they are unaccustomed to intellectual failure.  In the current context Japan is the exogenous event that triggered the stock market decline and my change of count away from 5th wave new highs.  Not looking to new highs by Friday's close is liberating, in that I can now focus on completed upward abc's to determine high-probability short entry.  Further rally beyond today's highs will get me out and flat.  I bought a trivial position of SDS at 21.83 on what I perceive to be a completed abc up.  Similarly I bought 1% ZSL short silver at 23.85. 

Early this morning SP futures broke their 30-minute M/A envelope with a 30-minute close more that 5% below.  The rally today did not reverse this sell signal and will not do so until there is a 30-minute close .5% above the 30-minute M/A.  This is one reason I went short earlier than the I1 peak.

DJI completed a 3 up from last Wednesday's low.  A decline 1.35% below the 5-minute, 370-unit M/A will confirm that the top is in.

 SPX came up to it's 55-day M/A and the DJI hit it's 50-day M/A, both indicative of short-term trend:
After the close Portugal decided to spurn reduced spending and seek external financing to support their current spending levels. Bearish the Euro. This is another exogenous event, but I still believe that Euro has a shot at fulfilling the count by making a nominal new high.

If cash Euro declines below 140.40, the wave 1 high then the top is already in.

I'll be on the road tomorrow, but I'll be online tomorrow night and periodically Friday.


  1. Sometime when you get a chance, please add a sentence or two to your "Intro & Concepts" page that defines how to pronounce I1, what it stands for (i.e.: I won, eye one, Iggy Juan) and what the basic premise is. You mention I1 in the page and in your blog but I have yet to see you define what it is. Thank you.

  2. Steve

    The top of the RUT trend channel was hit this morning so that should be it. Any move above 816.43 would be bullish. I added to my shorts and feel we should be now headed to the 770 area.

    Jack C

  3. Upside gap in COMPQ portends new highs.
    Downside gap in VIX supports this.
    Still need to fill downside treasuries gap.
    Upside gap in NIKKEI...may not fill until yen fail begins.
    EUR poised to kiss upper trendline at about 1.43

  4. Steve:

    Can you post the I1 values for the next three months?


    Mark S

  5. I seldom post here, but often check-in. I hope you and your wife are doing well Steve and that nothing serious has come upon you.