Wednesday, August 11, 2010

8/11 Daily Commentary

Flat now.  Stopped out DJ futures 10,332 and SSO 35.85. Minimal loss but no more longs.  Wave 5 of S3 is extending and DJ futures are down 100 points since the cash close.   This is the 3rd wave of the 5th wave of S3. The stock market extensions is very bearish.  My next trades will be shorts.  S3 is coming overnight but I will not try to pick the bottom.  When S4 comes I will short.  So far S3 has travelled 430 points in the futures market.  I1 peaks Friday but this market is not waiting.
The iii bottom lies ahead after further sub-waves down.
The post-close trading has broken the 7/30 low, so bombs away.
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5 comments:

  1. AnonymousAugust 11, 2010 at 3:05 PM

    Steve,

    What is the maximum points we could rally on the 4th wave? Thanks for all your help.

    John

    ReplyDelete
  2. Steve KotelesAugust 11, 2010 at 3:27 PM

    Hi John
    Realistically all you can plan on is a 38.2% retracement. That assumes that the 4th wave is not a rectangle or other short-throw correction type. Theory of alternation says that odds are for exactly that. If so, less than 20% retracement. If I do not get a decent rally out of wave 4 then I'll use I1 timing (late afternoon Friday), regardless of the extent of retracement.

    ReplyDelete
  3. pimaCanyonAugust 11, 2010 at 4:10 PM

    thanks for the heads up, Steve.

    Seems unlikely at this point that we will have another wave up.

    Good luck getting short!

    ReplyDelete
  4. AnonymousAugust 12, 2010 at 5:10 AM

    Steve

    GM this morning announced it would release its IPO this fall. What do you think the chances of that being delayed as this market decline unfolds? Went back short at yesterdays open after that first small bounce.

    Jack C

    ReplyDelete
  5. Steve KotelesAugust 12, 2010 at 8:51 AM

    Jack
    I think that after this next decline (S5) that we will then rally into late tomorrow. I1.

    ReplyDelete

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