7/6 3:00

Bought 2% SP futures 1022.

7/2 Weekly Commentary

83,000 private jobs added with 110,000 expected.  This expectation was down-graded following the weak ADP report on Wednesday, so we are weaker than the weak forecast.  Double-dip is now becoming the mundane expectation of the mundane economists. 
I1 bottom is 7/5, but since 7/5 is a holiday the typical I1 behavior is to bottom mid-day the following day.  I'll be set to buy anytime when the stock market breaks it's 30-minute M/A to the upside.  I'll act instantly on that and post right away.  Being an old fogey I am content to stand aside until about noon Tuesday and then look for a buy point on weakness.  However the daily technical composite has just reached +29.  Normally +22 is a buy signal, but since it gave a buy signal just a few weeks ago I have been expecting +28 to register my expected buy point.  +32 is a don't-think-about-it-just-do-it buy level.

My count is that either the decline from 4/26 is an ongoing 5-wave and Minute 1 of Minor 3 is complete or that the decline from 4/26 is a zigzag 3-wave.  EWI says we have one more low coming to reach Minute1.  If we get another low I'll be happy to amend my count.   Minute 1 started 6/21 at 10,594 and hit bottom 7/2 at 9614, for a 980 point decline over 10 days and 9.25%.  SPX hit bottom Thursday.  Here is the count assuming Minute1 of Minor3 is the bottom.

I have a problem with this assumption of an ongoing 5-wave.  I1 is going up starting noon 7/6 and going up for at least 11.5 trading sessions peaking 7/21:
1 20100702 22.35137

1 20100705 21.57711
1 20100706 21.9467
1 20100707 22.73956
1 20100708 24.07844
1 20100709 26.13671
1 20100712 28.78697
1 20100713 30.21966
1 20100714 31.80805
1 20100715 33.66239
1 20100716 35.20112
1 20100719 36.13145
1 20100720 36.27178
1 20100721 36.41742
1 20100722 36.30637
1 20100723 34.96335
1 20100726 33.57488
1 20100727 32.35731
1 20100728 31.96437
1 20100729 31.80197
The decline from 6/21 is 10 sessions and if a correction follows it should be shorter than the impulse.  My alternate count is that the decline from 4/26 is an abc. This allows for a larger, longer rally phase and is what I would expect within a head-and-shoulders that has not broken out. 
The entire investment world are now chart-readers.  Everybody knows that a head-and-shoulders breakdown has(?) occurred.  This undoubtably has shifted trading sentiment.  With common knowledge a large number of traders have positioned for the follow-through:

I1 says that follow-through will not occur during this trading cycle.  Thus, the stock market appears poised to take the most money from the most people that it can.  This expectation of a bear trap is what I have voiced several times as the likely outcome of the 7/5 I1 bottom.

The stock market has fallen to weekly support for both the DJI (the green line):

The SPX green line intersects at 1,000.  If we get a new low that's where I'll buy.  Otherwise I'll wait for noon or an upside break.

I will be monitoring the evening session of S&P futures trading looking for 30-minute breakout.  If it does not occur then I will monitor the morning of 7/6 looking for the same phenomenom.  If 30-minute breakout does not occur then I'll look for buying on weakness after 11am 7/6.  If this bottom is only Minute1 then several hundred points are my upside potential for 11.5 trading days.  I will liquidate on 7/21 and stay out looking for a short entry point.  I believe that the stock market will present the shorting opportunity prior to the I1 top in mid-August.  If the stock market continues it's decline Tuesday afternoon and closes below 9650 then the market will be in a waterfall decline and a shorting strategy will be appropriate.

7/1 Daily Commentary

The cash and futures markets have reached what I believe is the bottom of Minute 1.  Minute 1 of Minor 3 started June 21.  I cannot go long until at least the close Friday, preferably mid-day 7/6. Limited analysis tonight and tomorrow until after the close while in Albuquerque.  
The final low was lower than I thought, but did not alter the fact that the low is in.

7/2 9:45

Last post until this evening.  The futures made their low last night.  The cash allow for one more low to complete Minuette v and Minute 1 of Minor 3.  SPX should bottom above 1020.

7/1 pre-open

Claims were up, confirming the ADP data.  Expectations for the jobs report are +110,000.  This is probably high.
I am flat all positions.  Going to town today and tomorrow.  I'll look at the markets in my hotel this evening. If DJI closes below 9650 then I'll consider going short into the I1 bottom.  We have taken the heart out of this down move.  There are 2.5 trading sessions left until the I1 bottom.  The stock market is at support.  If the DJI is below 9600 at noon 7/6 then I'll keep a position short.