Forum Clusters 110804.xlsx

Yesterday’s reversal occurred with a small 20 DMF progress that recouped only one-fifth of the money flow lost on Tuesday. This is very far to be impressive from large players who supposedly took advantage of a capitulation flush according to most commentators. My personal feeling is that we haven’t seen the lows of this downleg yet.

The 20 DMF model is in cash and, frankly, the ST/LT settings are giving such a microscopic edge that it is probably wiser to ignore it and wait for the next stronger signal. A combination that led in the past to a 3 day gain of 0.11% from the previous day's close, with the trade being positive after three days in 52% of the cases has minimal positive expectations. Is it really worth all the stress?

IWM could barely regain MS1 (76.60) yesterday within the first resistance cluster, but a close above the big barrier made up of the major resistance confluence of QS1 (77.75) and SS1 (77.56) must be achieved to relieve the floor selling pressure. I believe that a test of QS2 (72.70) down to the yearly pivot (71.84) area would make an easier target for market makers algorithms to reload inventories with conviction. Summer doldrums conditions may help them to achieve this and they know it well.
GDX remains in cash.
Billy

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Forum Clusters 110804.xlsx