Monday, February 28, 2011

Guesstimates on February 28, 2011

March S&P E-mini Futures: Today's range estimate is 1315-1331. I think the market is about to drop into the 1225-50 zone over the next few weeks. But once this reaction is complete I expect to see new highs for the bull market.

QQQ: A drop to 53.00 or so has begun, but once it is complete I expect to see new bull market highs.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

April Crude: The 102 price target was hit last week. The market is still resilient. A move as high as 104 would mean that continuation up to 112 is likely.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Friday, February 25, 2011

Guesstimates on February 25, 2011

March S&P E-mini Futures: Today's range estimate is 1300-1317. I expect the ES to close today below 1322.25. If it does I will conclude that a drop of 90-125 points began from the 1343 top. In any case once this reaction is complete I expect to see new highs for the bull market.

QQQ: The 58.50 target has been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

April Crude: Political uncertainties have driven crude well above the 91.50 midpoint. While I remain low term bearish I also think crude will rally to 102.00 over the next couple of weeks. GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Thursday, February 24, 2011

update


Here is a daily chart of the cash S&P over the past 18 months. The red line is the 200 day moving average and the blue line is the 50 day moving average.

We have just seen a substantial, 3 day break and the question is whether or not it is just the first stage of something bigger. It is hard to tell at this juncture because the at the moment the S&P has not even matched the size of the drop of last November (blue dash rectangles). Thus the rhythm of the rally from last July's low at 1008 has yet to be broken. The S&P can drop as far as its 50 day moving average (red arrows) near 1287 without breaking this rhythm.

If a bigger drop is indeed underway then I think it will be similar to the January-February 2010 break. That correction carried the S&P nearly 70 points below its 50 day moving average. A similar drop now would end near support at the April 2010 top (purple dash rectangles and green dash line).

I can't guess which of these alternatives is the more likely. But I am confident that new highs for the bull market will be seen once this correction is complete.

Guesstimates on February 24, 2011

March S&P E-mini Futures: Today's range estimate is 1286-1306. Should the ES close tomorrow (Friday) below 1322.25 I will conclude that a drop of 90-125 points began from the 1343 top. The drop from Friday's 1343 high will probably end near 1306. in either event once this reaction is complete I expect to see new highs for the bull market.

QQQ: The 58.50 target has been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

April Crude: Political uncertainties have driven crude well above the 91.50 midpoint. While I remain low term bearish I also think crude will rally to 102.00 over the next couple of weeks. GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Wednesday, February 23, 2011

crude oil

Here is my latest post on "The Art of Contrarian Trading".

Guesstimates on February 23, 2010

March S&P E-mini Futures: Today's range estimate is 1306-1321. The drop from Friday's 1343 high will probably end near 1306. By the end of April this market will have traded at 1380.

QQQ: The 58.50 target has been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

April Crude: Political uncertainties have driven crude well above the 91.50 midpoint. While I remain low term bearish I also think crude will rally to 102.00 over the next couple of weeks. GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Tuesday, February 22, 2011

Guesstimates on February 22, 2011

March S&P E-mini Futures: Today's range estimate is 1318-1330. The drop from Friday's 1343 high will probably end near 1315. By the end of April this market will have traded at 1380.

QQQ: The 58.50 target has been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

April Crude: Political uncertainties have drive crude well above the 91.50 midpoint. While I remain low term bearish I also think crude will rally to 102.00 over the next couple of weeks. GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Friday, February 18, 2011

Guesstimates on February 18, 2011

March S&P E-mini Futures: Today's range estimate is 1332-1342. By the end of April this market will have traded at 1380.

QQQ: The 58.50 target has been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

April Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Thursday, February 17, 2011

update

Here is a five point box, one box reversal, point and figure chart showing 24 hour e-mini trading back to late October of 2010.

One useful feature of point and figure charts is the "count". On a one box reversal chart the length of an advance or decline is often close to the width of the trading range from which the upward or downward swing began.

On the chart above I have drawn several such counts. The targets are indicated by green ovals. The November 2010 trading range gave me two targets, one at 1280 and the second at 1335. When the first target was hit the market went 15 points higher and then dropped about 35 points.

I have also drawn two other counts from smaller trading ranges on the way up. The project to 1330 and 1350.

What is the implication of the fact that the market is currently trading near these targets? My guess is that the ES rallies to 1350 or so and then drops 30-50 points before resuming its uptrend.

Guesstimates on February 17, 2011

March S&P E-mini Futures: Today's range estimate is 1324-1334. Next upside target is 1342. By the end of April this market will have traded at 1380.

QQQ: The 58.50 target has nearly been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Wednesday, February 16, 2011

Guesstimates on February 16, 2011

March S&P E-mini Futures: Today's range estimate is 1327-1337. Next upside target is 1340. By the end of April this market will have traded at 1380.

QQQ: The 58.50 target has nearly been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Tuesday, February 15, 2011

still headed higher

Here is a daily bar chart of the e-mini futures. The market is up more than 30% in less than six months but shows no signs of even an intermediate term top yet. I am expecting some sort of top in April, probably near the 1380 level.

In the chart above I have drawn two trend channels(green dash arrows) . The market has been hugging the upper line of the narrower channel for weeks. An advance at this same pace for the next two months would carry the ES to 1380 or so (lower purple dash arrow). On the other hand, the top channel line of the wider channel would allow for 1380 much sooner than April (upper purple arrow) and would give a target above the 1400 level for the April time period. Since I think we have to see much more volatility and a faster paced advance before an important top can develop, this second possibility is one that I think is equally as likely as the first.

The blue dash rectangles highlight the fact that an advance from the 1262 low of late January 2011 that matches the size of the rally from the November 2010 low would carry to 1387. So the latter level is my minimum expectation for this bull market.

Guesstimates on February 15, 2011

March S&P E-mini Futures: Today's range estimate is 1321-1331. Next upside target is 1340. By the end of April this market will have traded at 1380.

QQQ: The 58.50 target has nearly been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Monday, February 14, 2011

Guesstimates on February 14, 2011

March S&P E-mini Futures: Today's range estimate is 1320-1334. Next upside target is 1336. By the end of April this market will have traded at 1380.

QQQQ: The 58.50 target has nearly been reached. Support is at 56.75. Next upside target is 60.00.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Friday, February 11, 2011

Guesstimates on February 11, 2011

March S&P E-mini Futures: Today's range estimate is 1308-1320. Next upside target is 1330. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Thursday, February 10, 2011



I thought it would be helpful to remind you once again of my longer term thinking about the stock market at this juncture. Surprisingly it is best illustrated by looking at the two charts above, neither of which is a stock market average.

In my view the single, most important thing to understand is that the Fed plans to continue its program of quantitative easing. And I think it won't end until the unemployment rate drops below 7% (currently 9%).

I think the Fed is doing the right thing here - correcting the mistake it made in the fall of 2008 and which it nearly repeated in the summer of 2010. What was their mistake? Failure to accommodate a big increase in the demand for liquidity which arose both times as a response to a banking crisis - in 2008 the crisis was in the US and in 2010 in Europe.

Until the unemployment rate drops substantially I don't think there is any risk of inflation exceeding 2 or 3% here in the US.

The thing to know about quantitative easing is that it raises the prices of capital goods by raising expectations about the nominal and real returns they will earn over the coming years. This change in expectations sends stock prices upwards. Asset price increases will lead to increases in employment and to a surge of business activity, both goals of the Fed.

How will we know that quantitative easing is achieving these goals? The first thing to be watching is the yield on the 10 year note (first chart above this post). On this weekly bar chart you can see that 10 year note yields surged upward when the Fed first undertook quantitative easing in March-April of 2009 and surged again when the Fed announced its second program of quantitative easing in November 2010.

These interest rate increases do NOT reflect significant changes in inflationary expectations ( the 5 and 10 year tips spreads have moved upward about 50 basis points since November). Instead they express the market's belief that economic activity is going to pick up and that the real return on assets is increasing. I think the 10 year note is headed at least to 4.50%. Ultimately it should trade above 5.00% yield in the process of reflecting expectations of 2-3% inflation and 3% economic growth.

So on this basis increasing bond market yields are very, very good for the stock market - exactly the opposite from what you are being told by the talking heads on TV and a lot of market bloggers I follow. When to start worrying? If and when this increase in yields stops or is reversed.

The top chart is a weekly chart of the US Dollar index. Quantitative easing in the US which is not matched by similar easing in the rest of the world sends the dollar down. From the point of view of encouraging economic growth in the US this is a very, very good thing. Cheap dollars increase demand for US assets and produced goods. In Europe the Irish and Greek economies are in depressions while the Icelandic economy, which also suffered a banking crisis, has gotten by with a relatively mild recession. Why? Ireland and Greece are Euro countries and could not devalue to restore competitiveness. Iceland is not a Euro country and its devaluation held to cushion the effects of its banking crisis.

Dollar depreciation is another sign that quantitative easing is working. I think the US dollar index is headed for the 60-65 range. Note the trend line and repetition targets.

Should the dollar start to rally strongly I think the US stock market will be in trouble because that will mean that the Fed's quantitative easing policy is no longer working.

Guesstimates on February 10, 2011

March S&P E-mini Futures: Today's range estimate is 1308-1319. Next upside target is 1330. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Wednesday, February 09, 2011

Guesstimates on February 9, 2011

March S&P E-mini Futures: Today's range estimate is 1308-1320. Next upside target is 1328. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Tuesday, February 08, 2011

update


Here is a daily bar chart showing 24 hour e-mini trading over the past three months. It is characteristic of bull markets that prices march relentlessly higher, even in the face of bearish divergences in market breadth numbers, bullish sentiment, etc. Indeed the market typically looks pretty dull, not a lot of up and down movement, until the ultimate top is approached.

From this perspective the fact that daily ranges have been quite modest and that moves to new bull market highs are occurring on modest or even low volume are in fact bullish indicators. They mean that prices have not moved high enough to attract sellers. They also mean that there is not much bullish enthusiasm. And I would expect to see at least some enthusiasm at the ultimate top.

On the chart above I have drawn a trend channel. The upper line of the channel passes through the November 2010 high instead of through the January 2011 tops. This reflects my belief that as prices climb more investors will regain their courage to buy and that this will steepen the rate of ascent in the ES. If the move up from the January 31 low at 1262 matches the size of the swing up from the November low at 1171 then the market should be trading at 1387 sometime during the next couple of months (blue dash rectangles). My target zone is outlined by the green oval and is at the confluence of the upper channel line and the top of the second rectangle.

Guesstimates on February 8, 2011

March S&P E-mini Futures: Today's range estimate is 1306-1320. Next upside target is 1328. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Monday, February 07, 2011

Guesstimates on February 7, 2011

March S&P E-mini Futures: Today's range estimate is 1304-1316. Next upside target is 1325. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will soon begin a move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Friday, February 04, 2011

Guesstimates on February 4, 2011

March S&P E-mini Futures: Today's range estimate is 1299-1312. Next upside target is 1320. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will soon begin a move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Thursday, February 03, 2011

Guesstimates on February 3

March S&P E-mini Futures: Today's range estimate is 1295-1304. Next upside target is 1320. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will soon begin a move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Wednesday, February 02, 2011

Guesstimates on February 2

March S&P E-mini Futures: Today's range estimate is 1294-1306. Next upside target is 1320. By the end of April this market will have traded at 1380.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will soon begin a move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.

Tuesday, February 01, 2011

headed higher

The move up from the Sunday night shakeout low at 1262.25 has been relentless. It reminds me of the rally which began last December 1 in similar circumstances (green arrows on the daily ES futures chart above). I think in each case the timing of the buying on the first trading day of the month following a shakeout is significant. I think these buyers are longer time frame investors and traders and that their buying is strengthening the market's technical position, not weakening it.

The rally which started on December 1 carried the market up 125 points from its shakeout low. A similar rally here would bring the ES up to 1387 (blue dash rectangles). I think the market has a good shot at that level (green oval) by April. This would coincide with Lindsay's domed house forecast of a top around April 8 which could potentially end this bull market.

I have also drawn a doubled trend channel on the chart. The middle line would be the normal channel target and suggests that the market might easily reach 1387 by early April. But if the ES is even stronger, perhaps in response to good economic news, the market could take the bit between its teeth and move up to the top channel line I have drawn.

Guesstimates on February 1

March S&P E-mini Futures: Today's range estimate is 1280-1291. The market is heading for 1300 or above. While I don't expect it a daily close below 1270.50 would have more bearish implications and suggest a move down to the 50 day moving average will develop first. In any case by the end of April this market will have traded at 1350.

QQQQ: I think the market will rally to 58.50.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will soon begin a move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

March Crude: I still think crude oil is headed for 50.00. The 91.50 level is strong resistance because it is the midpoint of the 2008 drop from 147.80 to 35.00.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: The upside target at 31.00 has been reached but there is still no sign of a top. Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Has reached the 350 target. Next upside target is 375. Support is at 310.