Monday, June 27, 2011

6/27 Daily Commentary

I bought 2% QID in ARCA trading but narrowed it to 1%.   The stock market is at the outer limits of the SP futures 30-minute M/A, but the short-term timing component at minimum tops tomorrow or ideally on Wednesday.  I'm getting in early and will buy NQ futures if SP futures have a 30-minute close above 1280.
The daily technical composite established a buy signal 2 weeks ago and moved down a notch today to +14.  +4 will negate this signal and shift the short-term technicals back to neutral. 
My main focus has been on the short-term timing component of I1 with an 8-day lead.  The 2 hash marks on the chart below are the secondary peak at +16 and 8 days earlier (tomorrow).  So the earliest the peak will occur is tomorrow and my purchase of QID is premature.  The ideal time window is the decline below 10.5 which will occur Thursday, so the time window is adjusting as we get closer to it.  My bet is on Thursday, which implies an upside breakout until then.
I bought QID at the upper end of it's trading range and NQ futures are at their 18-day M/A.  A breakout will confirm that the market has 3 days to it's Thursday peak.
The only reason that I started to short a bit early is that the market is at an inflection point with either a breakout or breakdown iminent and the longer-term backdrop is bearish, with the weekly technical composite on a sell signal and smoothed I1 on a downtrend until late August.

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