Tuesday, October 19, 2010

10/19 pre-open

Current positions:
5%UUPlongdollar,12%SDSshortSPX,2%QIDshortNDX,2%ZSLshortsilver,2%SCOshortcrude

long2%DXfutures,short1%DJfutures,short1%SIfutures
The dollar rallied again overnight, passing Sunday evening's high.  This should be wave 3 in progress.
Dollar index should easily take out 89.  The next milestones are to take out short-term moving average at 78 and then rallying beyond the b wave of the abc decline, which is 80.20 nearest futures.
Stock indices are at critical support but will not break that until DJ futures falls below 10,870.
Silver has broken it's own critical support, it's hourly, 161-unit M/A which will signalled by an hourly close .5% below.


Once DJI breaks critical support I'll increase short stock exposure.  I1 goes negative tomorrow afternoon and bottoms 10/26-27.  Afterward there will be a weak uptick.  If DJI has broken critical support (as I expect) then I'll hang onto a short position through it.  As long as the dollar rallies then markets will increasingly perceive the impotence of the Fed.  This is bearish stocks and commodities.

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