Monday, June 27, 2011

6/27 pre-open

End-of-quarter week.  In a bull or trendless market this would add a bullish bias.  Short-term timing component indicates Wednesday as peak day.  Trend is then down until late August.  I hold 1% UCPIX and 2% EUO.

Overnight trading saw SP futures test last week's lows before rallying.  SP and ND futures are testing their 200-day M/As.  It's looking like Wednesday will only see a rally to the top of the trading range.  If the past 2 weeks are only a rectangle then this will have implications for a wave count.  The only clear count of the decline since March has been Nasdaq, with the Composite counting (iv) in progress.  A rectangle would make be appropriate for this count and, when complete, make this count almost a certainty.  My tactics are to go short at top-of-range sometime Wednesday.

As expected, the dollar met stiff resistance at 76.50, but I believe that the dollar is in an uptrend.  Stock strength going into Wednesday should offer a buying opportunity.

Silver traded down with stock overnight and has not rallied back with them.  I'm reluctant to short silver until Wednesday, hoping it will recover back to the daily M/A or higher and give me a short point for the "risk-off" trade.

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