Wednesday, June 15, 2011

6/15 1:20

Stock indexes came down to test Friday's lows and in several instances slightly exceeded them.  Nasdaq and small/mid caps have held above the lows and Nasdaq Comp just hit it's 200-day M/A (again).
I'm not willing to abandon the prospect of a rally here.  I made money shorting from yesterday's highs and am only holding SOPIX and UCPIX.  Another low here and I'll change my mind and go short ETFs again.  My eyes are on the Nasdaq Composite now.   While I want the 8-day lead to go away the axiom for the short-term component is whenever a traumatic event induces a lead I stay with the lead until conclusively terminated.  The technical composite at +22 says to look for several days of rally, even it is not violent enough to return the composite to neutral.
On the upside I'll look for a 3 up hitting a key M/A to short again.
As far as the grand supercycle, EWI has the 5th wave ending 2000.  Our nation's capital base was originally built on the California gold discovery which financed our industrialization and railroads.  The capital accumulated by corporate titans and entrepeneurs over the last 150 years has been eclipsed by the debt accumulated by our government and individuals.  The government has encouraged it's citizens to go head over heels in debt.

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