Thursday, June 23, 2011

6/23 Daily Commentary

I bought QID at 53.77 near the close when both SP futures M/A and DJI critical M/A were both hit almost simultaneously.  I had earlier attempted to buy QID but was stopped out.
The stock market declined sharply overnight due to a collapse in commodity prices brought about by an attempt by the Keynsian authorities to get the U.S. economy going by releasing 30 million barrels of crude from the Strategic Petroleum Reserve.  Other nations were brought into in under the umbrella of the IEA.  The stock market found bottom at the SPX 200-day M/A and rallied for the rest of the day.  Although the decline broke the envelope of the DJI critical M/A it was within the context of a trading range extending over the past 2 weeks and thus the significance of this event was reduced as trading ranges produce moving averages of length less than the trading range to flatten and lose their predictive capability.  Since the DJI critical M/A only spans 5 trading days it's input is sharply reduced when weighing factors.  The same rationale applies to the SP futures 30-minute M/A.  Even though these M/As continue to function, their power is reduced within long trading ranges.
The ND futures 17-day M/A, however, is still relevant and came in just below today's highs.  ND futures have chart resistance at 2252.50 and a rally beyond 2257.50 would indicate the rally continuation as predicted by the short-term timing component.

Consequently, I'll go long NQ futures if 2257.50 is exceeded, in order to offset my QID and UCPIX.  Rallying beyond this level will break out of a H&S pattern formed during the trading range.  This will also confirm that the short-term timing 8-day lead is still in control, in spite of the oil market manipulation.  Using this lead my best estimate of rally peak is Tuesday or Wednesday.

A continuation of the rally will also allow gold and silver to recover from the oil shock.
I'll remain short Euro from here on.

No comments:

Post a Comment