5/5 Daily Commentary

The DJI broke what I consider a critical M/A, 5-minute, 370-unit, by more than 1.35%, thus registering an OK to step up exposure.  Bought 2% SDS after hours at 20.40.   There is a fly in the soup, however.  Normally, the cash DJI critical M/A is confirmed simultaneously with DJ futures 270-hour M/A -.85%. This computes to an envelope 107 points below and a break point of 12,470.  DJ futures got to 12,467 but rallied to an hourly close nearly at the M/A.   As a result I'm putting expansion of shorts on hold until DJ low is taken out.

The dollar has rallied up to key resistance.  If it can rally .55% above it's 90-minute M/A on a 90-minute close then it is a buy.  However, I expect a decline from this level which will allow precious metals to rally and present a shorting opportunity.  This dollar decline may also feed into short-term strength in the stock market.  The upside dollar breakout will probably occur in a couple more sessions.

I had counted silver as in wave 5 with a decline below 39.  The last wave subdivided all the way down to 34.25.  I have to change the count to wave (iii) in progress and wave (iv) imminent.  This change recognizes the extreme decline that is the hallmark of wave 3's.  A bounce to 40 would be a good opportunity to short again.