Tuesday, January 25, 2011

1/25 Daily Commentary

I1 is rising to a high value in several weeks.  I am looking for buying opportunities with tight stops.  Tomorrow is Fed meeting day.
Short gold futures, long 2% EUO.  I sold the 4% SSO in ARCA at 50.51.
I came into the day only 2% SSO and the stock market sold off.  Bought 2% 50.20, sold at 50.42.  Bought 2% again at 50.04 and am holding on. 
I came in flat currencies and bought EUO at 19.32 when the dollar sold off to it's lows.  So a flat day for currencies.
I believe that gold is in a 4th wave with one final low before a significant bounce.  Daily M/A is 1307 tomorrow.  The stop currently is 1342, which is above the wave 1 low.
EWI believes that the market is done.  I1 says otherwise.  One case in point:  The DJI completed what appears to be a 5 wave up from 11,744.  Yet, clearly there is a probability that this wave merely wave 3 on a higher order (namely the sequence starting at 11,700). 

The SPX has the clearest completed 5 up.
Discretion being the better part of valor, the SPX came up to it's prior interday high and DJI came up to it's old high.  I sold the SSO at 50.51.  If the DJI rallies past 12,050 I'll look to buy it.  If DJI declines to critical support I'll buy it.  Regardless, I cannot short until critical support is broken, currently at 11,735 but climbing.
Long dollar/shortEuro will be how I'll trade a potential stock market decline.  I1 has been supporting stocks and suppressing the dollar, so this has been dicey.  Without a stock position long dollar will be naked.  I'm currently holding 2% EUO.  The most conservative strategy is to wait for the dollar to break it's first hourly M/A by 24 cents.  This M/A is currently at 78.51 but is declining through the night.
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2 comments:

  1. pimaCanyonJanuary 25, 2011 at 7:25 PM

    FWIW, EWI has called tops many times since March 09. It's very possible that their larger time frame count is wrong, and who knows, maybe SPX tags 1570 before it's all said and done, or maybe even new all time highs.

    I do think it's possible we get a correction here just because the market is overdue for an IT low. I don't know how to reconcile that view with I1, though, so we'll just have to let the market sort it out. Should be interesting.

    Good luck, Steve.

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  2. AnonymousJanuary 25, 2011 at 7:25 PM

    Hey Steve, excellent commentary and analysis as usual. I agree, things seem "4" despite the SPX - highs coming, and that, in any case, there's no reason to short until support is broken.

    Any chance you could put up a 2011 forecast similar to the 2010 one linked in the sidebar? As I noted before, the simple turn dates have proven to be *great* bull signals, and the bear dates have done very well in some cases too. Would love to see the 2011 version or the data to make my own. I understand life's circumstances are keeping you occupied to say the least...

    All the best - shabs

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