4/8 Daily Commentary

I got the initial confirmation of the decline when SPX broke 1180.50 yesterday.  Not only did this confirm, it also provided my stop-loss, which is .56% above the M/A, which computes to 1190.93, but I will be placing the stop above Tuesday's high, 1191.80.  June futures have risen to near the top of their zone of resistance, which I will report on in the AM.  The SPX and Nasdaq composite appeared to decline impulsively from Tuesday's high and also appear to have completed an abc upward correction of that decline.

The market declined deep into the next zone of support, which extends down to DJI 10,800. This  is the toughest nut to crack and., when broken, overrides most other indicators.  The market has been penetrating deeper and deeper into this zone, which is the "happy trail" of trend followers.  As Yogi Berra would say "the trend is your friend, except when it ain't". 
I will repeat a portion of an earlier post:
The strategy is to come into next Tuesday's low and, if DJI is under 10,800 (triggered the final level support break) then to keep a portion of the short position, as I am looking past to an acceleration phase beginning around 4/22-4/29. I want to stay with the DJI 5-minute, 380-unit M/A.

There is an interesting trade setup in short silver which I will present in the pre-open.  If silver breaks support then economic hope will be shown to dissipate, as discounting 2nd half slowdown takes control.  Silver is very sensitive to future economic conditions.  One reason I follow it.