Thursday, May 5, 2011

5/5 9:25

Dollar strength is mirroring stock weakness.  Stocks, commodities, and currencies are "risk-on" assets while bonds and the dollar are "risk-off" assets.  Risk-on is fading and risk-off is rising as seen in I1, smoothed as 30-day M/A.

The stock market is burrowing into the critical M/A envelope.  When DJI gets to 12,600 I'll lighten up on the shorts until it can clear 12,580.


  1. Steve

    Could we be headed to 1320 spx?

    Jack C

  2. Jack, if we clear 1330 we should go a lot lower, but clearing 1330 might be tough. It corresponds to the DJI envelope at 12,580.