June S&P Futures: Today support is at 1309 and I think the market is now on its way to 1350.
June Bonds: The day has begun bearishly and I suspect that the market will drop to 105-30 before it begins a multi-point rally.
June 10 Year Notes: The notes will probably drop to 104-26 before beginning a rally to above the 106 level.
Euro-US Dollar: The market has reached my upside target at 125.20 and the next big move should carry from here to below 116.
Dollar-Yen: The 112.50 level is my downside target. Support today is at 113.80 while resistance is at 114.80.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is on its way below $60.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Yesterday’s 1315 high silver probably ended the rally and I think the maket will now begin a move to 920.
Google: Support is at 418 and I expect continuation up to 495 over the next few weeks.
Friday, April 28, 2006
Thursday, April 27, 2006
Silver
Here is a 15 minute bar chart showing pit and electronic trading in May silver futures. I last commented on this chart here.
I have decided to give up on my 135o target in light of the market's sharp drop after taking a peek above 1300 today. I think that silver is now headed down to 920 or so, the 2 5/8 multiple of the 351 low in 1991.
Dollar-Yen
Here is a daily chart of the dollar-yen pair.
I think the market is approaching the end of a three phase correction. Support is near 112.50 and once it is reached the next move should carry the dollar yen up to 125.
Euro USdollar
Here is a daily chart of the cash Euro-US dollar pair. I last commented on this market here.
The market has reached my 125.20 target in the third phase of a clearly defined three phase correction that started from the 116.40 level. The last important top (black line) at 125.88 made last September 1 is nearby too. I think the next big move in this market will be downward to well below the 116 level.
S&P
Here is an updated 15 minute bar chart showing regular hours trading in the June S&P e-mini futures.
In this morning's guesstimate I said that the break below the 1305 level meant that the market was headed for 1288. At 10 am ET Bernanke told the markets that the Fed may pause in its interest rate increase program and the subsequent rally took out yesterday's high. Moreover, volume on the rally was persistently high relative to past days activity.
I think that this morning's low at 1300.25 will hold and that the market is on its way to 1350.
Guesstimates on April 27 , 8:50 am ET
June S&P Futures: Early thus morning the market again dropped below 1308.25 and also took out the 1305 low. I have to believe that this means we are headed for 1288.
June Bonds: The bonds dropped as low as 106-05 early this morning. I think this market is ready to begin a multi-point rally. Support today is 106-02.
June 10 Year Notes: The notes dropped a tad below the 105-00 support level this morning but I think a rally to 106-00 is about to start.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: It looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver is now in the third phase of a rally that will carry to 1350. After that I expect to see the market drop to around 920 in a few weeks.
Google: Support is at 423 and I expect continuation up to 495 over the next few weeks.
June Bonds: The bonds dropped as low as 106-05 early this morning. I think this market is ready to begin a multi-point rally. Support today is 106-02.
June 10 Year Notes: The notes dropped a tad below the 105-00 support level this morning but I think a rally to 106-00 is about to start.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: It looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver is now in the third phase of a rally that will carry to 1350. After that I expect to see the market drop to around 920 in a few weeks.
Google: Support is at 423 and I expect continuation up to 495 over the next few weeks.
Wednesday, April 26, 2006
S&P Update
Here is an updated 15 minute bar chart of the June S&P e-mini futures. I commented on this chart this morning.
The 1308.25 level is still key for me. Today we again closed above there after testing this "shakeout" level this afternoon. I think the next move from here will be upward.
S&P
Here is a 15 minute bar chart showing regular hours trading in the June S&P e-mini futures.
I commented on this chart yesterday afternoon.
Yesterday the market closed back above the shakeout level of 1308.25 and I interpreted this to mean that a rally to 1330 has started. Early activity this morning confirms this view. Volume has increased sharply as the market has rallied away from 1308.25. This together with the fact that volume dried up right after the break belows 1308.25 shows that the bull forces are in control of this market. I conclude that we should see the 1330 level in a few days.
Chicago Merchantile Exchange
Here is a daily bar chart of the Chicago Merchantile Exchange. This stock has been a bull market leader for three years. I last commented on CME here.
I see support in CME near 469, the 11 1/8 multiple of the all time low of 41.35. From there I still think that CME will move to new highs and reach my next target at 522.
Guesstimates on April 26 , 8:50 am ET
June S&P Futures: The market closed back above the 1308.25 level yesterday and as long as that level holds today I shall believe that a swing up to 1330 has begun.
June Bonds: The bonds dropped lower than I expected but I think the 106-11 low on this morning’s news will hold and that a rally back to 108-00 is about to begin.
June 10 Year Notes: The 105-00 level is support today and another rally to 106-00 or so should start from there.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver is now in the third phase of a rally that will carry to 1350. After that I expect to see the market to drop to around 920 in a few weeks.
Google: Support is at 423 and I expect continuation up to 495 over the next few weeks.
June Bonds: The bonds dropped lower than I expected but I think the 106-11 low on this morning’s news will hold and that a rally back to 108-00 is about to begin.
June 10 Year Notes: The 105-00 level is support today and another rally to 106-00 or so should start from there.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver is now in the third phase of a rally that will carry to 1350. After that I expect to see the market to drop to around 920 in a few weeks.
Google: Support is at 423 and I expect continuation up to 495 over the next few weeks.
Tuesday, April 25, 2006
Gold
Here is a 15 minute bar chart showing pit trading in June gold. Here is my last post on gold.
I think the top at 648 (electronic and not shown on the chart) will hold for a while. It looks to me like gold has completed a rally to a lower top and will now head down to the 600 level and eventually to 540 or so.
Board of Trade
Here is a daily chart of the Chicago Board of Trade. I last commented on this stock here.
I think BOT is completing a three phase correction near 108 support, the 1 3/8 multiple of the 79 low. The next development should be a move up to my 148 bull market target.
Here is a daily chart of Google. I last commented on GOOG here.
I think that support near 420, the 4 38 multiple of the 95.96 low, will hold and that GOOG will resume its move to may 495 target.
S&P
Here is a 15 minute bar chart showing regular hours trading in the June S&P e-mini futures.
Yesterday afternoon I pointed out that the market was acting as if the low at 1309 would hold. This morning a very strong consumer sentiment number convinced the market (at least temporarily) that the Fed would continue its program of raising interest rates. The subsequent break took out the 1308.25 level which was the last low on the way up to the 1324 top.
As I watched this sequence of events unfold this morning I thought it likely that the market would continue down to support at the 1288 level. The pace of the downswing was faster than the preceeding downswing. Moreover, the volume showed a definite tendency to increase on down bars. Finally, the drop from 1324 no longer had the appearance of a three phase correction.
But after the market broke below 1308.25 there was little downside follow through. And as you can see volume dried up. I had been expecting a wide open break after the breakout and whenver the market fails to follow through after such a breakout I become suspicious.
Right now I am using the 1308.25 level as my indicator. Strength above there later today, especially a close back above that level, will make me believe that the breakout was really a shakeout and that tomorrow will start a rally to 1330 and above. Failing this show of strength I will have to assume that the next stop is 1288.
Guesstimates on April 25 , 8:50 am ET
June S&P Futures: Support today is again at 1312 and I think that the market will soon be trading above 1330.
June Bonds: The bonds are headed down to 107-00 in the second phase of a three phase rally which will soon carry the market up to 108-12.
June 10 Year Notes: The notes are headed back to support at 105-16 and from there will rally to 106-12.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver dropped to 1169 shortly after yesterday’s pit close but is now in the third phase of a rally that will carry to 1350. After that I expect to see the market to drop to around 920 in a few weeks.
Google: Support is at 420 and I expect continuation up to 495 over the next few weeks.
June Bonds: The bonds are headed down to 107-00 in the second phase of a three phase rally which will soon carry the market up to 108-12.
June 10 Year Notes: The notes are headed back to support at 105-16 and from there will rally to 106-12.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver dropped to 1169 shortly after yesterday’s pit close but is now in the third phase of a rally that will carry to 1350. After that I expect to see the market to drop to around 920 in a few weeks.
Google: Support is at 420 and I expect continuation up to 495 over the next few weeks.
Monday, April 24, 2006
S&P
NOTE: Blogspot.com has been experiencing serious technical problems today so my posts are being delayed if they are published at all. Hopefully tomorrow will be better.
Here is a 15 minute bar chart of regular hours trading in the June S&P e-mini futures.
The market this morning broke below the 1312 low of April 20, thus giving the whole drop from the 1324 high a classic three phase look. Today's low at 1309 remains above the 1308.25 level which was the last reaction low on the way up to 1324. These two facts are hints that the drop from 1324 may be ending.
Let's look at the third phase of the drop from 1324 in more detail. I have highlighted the swings within this phase in green. You can see that the successive downswings have been getting shorter. Morevover, the last rally reached 1315 which was higher that the high of the last reaction on the way down to 1309. Finally I think I see two successive higher lows within the past couple of hours. These considerations all suggest to me that 1309 will hold and that the market will head higher tomorrow.
I still expect to see the S&P's trade above the 1330 level this week.
Silver
Here is an hourly chart showing pit and electronic trading in May silver futures.
The drop from the 1468 high of last week is likely to continue down to the 920 area. However, I think that the rally from point B still does not have a classic three phase shape so I am expecting another move up to 1350 or so before the drop to 920 begins.
Guesstimates on April 24 , 8:50 am ET
THIS POST WAS DELAYED BY TECHNICAL PROBLEMS AT BLOGSPOT.COM
June S&P Futures: Support today is at 1312 and I think that the market will soon be trading above 1330.
June Bonds: The bonds now will rally to 108-12.
June 10 Year Notes: The notes will now rally to 106-12.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver has rallied from the low at 1160 to 1332, still shy of my 1350 target. This morning’s break dropped the market from 1332 to 1240 and support stands at 1225. From there silver should then rally to 1350. I expect to see the market trading around 920 in a few weeks.
Google: Earnings news sent GOOG as high as 455 early Friday. A reaction from here is likely but the 420 level should hold. I expect continuation up to 495 over the next few weeks.
June S&P Futures: Support today is at 1312 and I think that the market will soon be trading above 1330.
June Bonds: The bonds now will rally to 108-12.
June 10 Year Notes: The notes will now rally to 106-12.
US Dollar -Euro: The market is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver has rallied from the low at 1160 to 1332, still shy of my 1350 target. This morning’s break dropped the market from 1332 to 1240 and support stands at 1225. From there silver should then rally to 1350. I expect to see the market trading around 920 in a few weeks.
Google: Earnings news sent GOOG as high as 455 early Friday. A reaction from here is likely but the 420 level should hold. I expect continuation up to 495 over the next few weeks.
Friday, April 21, 2006
Silver
Here is a 15 minute bar chart showing pit and electronic trading in May silver since its high at 1468.
I think this market is in the second phase of a three phase downmove which should carry to point D near 1100. After a rally from 1100 I think we will see more downside action which will carry silver to 920 or so.
At the moment the market is moving up from its early morning low at 1160. This move should itself be a three phase advance and I think the second phase will carry the market down from 1290 to 1200 or so. The third phase will then reach the 1340 level and be followed by the move down to point D.
Here is a daily bar chart of Google.
In pre-market trading this morning GOOG rallied as high as 454.99. The 456 level is short term resistance and the 444 level is the 4 5/8 multiple of the low trade price of 95.96. I think GOOG will probably react from here down to the 4 3/8 multiple near 420. I also think that GOOG will soon reach my 495 target.
Guesstimates on April 21 , 8:50 am ET
June S&P Futures: Support today is again at 1308 and I think that the market will soon be trading above 1330.
June Bonds: The bonds now will rally to 108-12.
June 10 Year Notes: The notes should now rally to 106-12.
US Dollar -Euro: The market dipped a little below 122.80 support but now is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver broke $3 from its 1469 high is little more than a day. It has rallied from this morning’s low at 1160 but should encounter resistance around 1260. We expect to see the market trading around 920 in a few weeks.
Google: Earnings news sent GOOG as high as 455 early this morning. A reaction from here is likely but the 420 level should hold. I expect continuation up to 495 over the next few weeks.
June Bonds: The bonds now will rally to 108-12.
June 10 Year Notes: The notes should now rally to 106-12.
US Dollar -Euro: The market dipped a little below 122.80 support but now is on the way to the next upside target at 125.20.
June Crude: The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: I looks like gold made its high at 649 and now is in the early stage of a drop to the 2 1/8 multiple of the 252 low which stands at 535.
May Silver: Silver broke $3 from its 1469 high is little more than a day. It has rallied from this morning’s low at 1160 but should encounter resistance around 1260. We expect to see the market trading around 920 in a few weeks.
Google: Earnings news sent GOOG as high as 455 early this morning. A reaction from here is likely but the 420 level should hold. I expect continuation up to 495 over the next few weeks.
Thursday, April 20, 2006
Silver
Here is a 15 minute bar chart showing pit and electronic trading in May silver futures.
Among all the markets I follow silver has had the look of a very unstable one, principally because of its nearly vertical rally from 900 to 1468 over the past two months.
I think that a big break in silver has started today. Ultimately it will probably carry the market back to where the vertical rally began. This is the 921 level which is the 2 5/8 multiple of the 1991 low at 351.
From today's low so far at 1220 silver will probably stage a three phase rally to 1310 or so. After that a drop to 1172 is likely before a more substantial rally can start.
S&P
One useful trick for interpreting the significance of market action is to compare similar situations. The two 15 minute bar charts you see above show the action in the June S&P e-mini futures during regular trading hours. The first depicts the activity on April 7 at the top of 1324 (reached overnight and not shown on the chart). The second chart depicts activity today with the day's high so far of 1324.75.
On April 7 you can see that the market dropped right from the open after the 1324 high reached after the employment number that day. The highest volume of the day came on subsequent down bars. Moreover, this volume was associated with a break of the last low on the way up to 1324.
Today traders evidently believed that a sure profit could be had by selling a new high and looking for a repeat of the April 7 action (which evenutally was followed by a drop all the way to 1286.50). But notice the difference between the two days. First of all the volume on the break today was lower than the volume of the climax bar at the high today. This contrasts with the high and increasing volume seen on down bars after the high on April 7. Secondly, the break today has so far held support at the last low on the way up, the 1308.25 level.
This comparison makes me think that the market is showing stronger action today than it did on April 7. And I think the result will be that the 1308.25 support level will hold and that we shall soon see the futures trading above 1330.
Guesstimates on April 20 , 9:10 am ET
June S&P Futures: Support today is at 1308 and I think that the market will soon be trading above 1330.
June Bonds: The bonds hit 106-24 yesterday and now will probably rally to 108-12.
June 10 Year Notes: The notes should now rally to 106-12.
US Dollar -Euro: The market has reached 123.80 and will probably hold 122.80 on a reaction. Next upside target is 125.20.
June Crude: Switching to the June contract which is trading about 1.90 over May. The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: The 661 level is strong resistance and I don’t think gold will move past there before a big break begins.
May Silver: Silver moved above my 1448 target but stopped shy of the 1493 high made in 1983. I think this market is very unstable and will soon begin a big break from current levels.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
June Bonds: The bonds hit 106-24 yesterday and now will probably rally to 108-12.
June 10 Year Notes: The notes should now rally to 106-12.
US Dollar -Euro: The market has reached 123.80 and will probably hold 122.80 on a reaction. Next upside target is 125.20.
June Crude: Switching to the June contract which is trading about 1.90 over May. The upside target at the 74.30 level, the 7 5/8 multiple of the all time low at 9.75, has been reached and I think the market is about to drop substantially along with gold and silver.
June Gold: The 661 level is strong resistance and I don’t think gold will move past there before a big break begins.
May Silver: Silver moved above my 1448 target but stopped shy of the 1493 high made in 1983. I think this market is very unstable and will soon begin a big break from current levels.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
Wednesday, April 19, 2006
Big Break Ahead in Gold, Silver and Oil
As I write this May silver is trading at 14.65, June gold at 641, and June crude oil at 73.90. Gold and silver have been going straight up the past few days. Gold is near my 661 target, silver has passed my 14.48 target and is near its 1983 top at 14.93. Oil is near my 74.30 target.
The whole situation has a very unstable feel to it and I think that these markets will soon top out together and drop substantially and very quickly from their highs. Such action would support a good rally in bonds. It would also be very bullish for the stock market.
The whole situation has a very unstable feel to it and I think that these markets will soon top out together and drop substantially and very quickly from their highs. Such action would support a good rally in bonds. It would also be very bullish for the stock market.
Crude Oil
Today I am switching from the May contract to the June contract in crude oil futures. June is trading about $1.90 over May. Here is an hourly chart of the June contract.
I had been thinking that the August 2005 high at 70.90 would hold. I was wrong about this and the issue now is whether or not the breakout above 70.90 will soon be reversed.
I think there is a lot of bullishness in the market for crude oil and that there has been for the past 8 months. There is strong resistance nearby. The 74.34 level is the 7 5/8 multiple of the all time low in futures trading at 9.75 in 1986. The 75.90 level is the 1 7/8 multiple of the preceeding all time high at 40.50 in 1990. I think that the break above the 70.90 level will be short lived and that the market will soon drop $ 15-20 from current levels.
T-bonds
Here is a highly condensed 15 minute bar chart showing pit trading in the June T-bond futures.
As I explained in my last post on bonds there is good reason to think this market is getting close to the point where a rally of 5 points or so is a reasonable expectation. More evidence for this view can be found on the 15 minute chart above.
Notice how the successive downswings c-d, e-f, g-h, i-j have grown progressively shorter in price and in duration. The rallies d-e, f-g, h-i have grown in length. The market has just reached support at 106-24.
This combination of factors makes me believe that the bond futures will soon move to 108-10 or so and that such a move has a better than even chance of being the start of a more substantial rally.
Silver
Here is a montly chart of silver futures going back to 1982.
In January 1980 (not shown on the chart) silver futures traded above 40.00 for a day and then promptly collapsed, dropping below 5.00 in June 1982. The market subsequently rallied to 14.93 in February 1983 and then began a long decline ending at 3.51 in 1991.
As I write this May silver has traded as high as 14.49 today. The 1983 top is at 1493. Resistance at the 4 1/8 multiple of the 351 low stands at 1448. The market has risen nearly vertically from the 9.00 level two months ago. All these considerations tell me that this big up move in silver will end soon and near current levels. When it does silver will probably drop three or four dollars in just a few days.
Guesstimates on April 19 , 8:50 am ET
June S&P Futures: Support today is at 1311 and I think that the market will soon be trading above 1330.
June Bonds: I still think the bonds are likely to drop to 106-24 before a substantial rally starts. Resistance today is at 108-00.
June 10 Year Notes: Resistance today is at 106-00 and the market is likely to visit 105-08 before a more substantial rally starts.
US Dollar -Euro: The market is now headed for 123.80 and then to 125.00.
May Crude: The market is headed for 74.30, the 7 5/8 multiple of the all time low at 9.75.
June Gold: Gold has moved significantly above the 598 level which is the 2 3/8 multiple of the 252 low. I now expect the market to rally to the 2 5/8 multiple at 661.
May Silver: Silver moved well above 1272 resistance overnight so I now believe that the market is headed for the 4 1/8 multiple of the 351 low which is at 1448.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
June Bonds: I still think the bonds are likely to drop to 106-24 before a substantial rally starts. Resistance today is at 108-00.
June 10 Year Notes: Resistance today is at 106-00 and the market is likely to visit 105-08 before a more substantial rally starts.
US Dollar -Euro: The market is now headed for 123.80 and then to 125.00.
May Crude: The market is headed for 74.30, the 7 5/8 multiple of the all time low at 9.75.
June Gold: Gold has moved significantly above the 598 level which is the 2 3/8 multiple of the 252 low. I now expect the market to rally to the 2 5/8 multiple at 661.
May Silver: Silver moved well above 1272 resistance overnight so I now believe that the market is headed for the 4 1/8 multiple of the 351 low which is at 1448.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
Tuesday, April 18, 2006
Domed House Update
Here is a daily chart of the cash S&P 500 index showing my revised view of the ongoing domed house pattern. This pattern is the second half of George Lindsay's Three Peaks and a Domed House. I have discussed this aspect of Lindsay's work many times on this blog during the past year.
I had been expecting point 23, the peak of the domed house and of the bull market, to occur in late April. My secondary choice was June 6. This June date is the standard 7 month and 10 day interval from point 14 which occurred on October 27. Since the market has had a substantial reaction during the past three weeks I think that June 6 is now the most reasonable prediction for point 23.
Note that June 6 is also near top-to-top and low-low-high projected top dates.
S&P
Here is a 15 minute chart showing regular hours trading in the June S&P e-mini futures. I last commented on this chart yesterday afternoon at the close.
After the shakeout below the 1289 level yesterday the market has recovered rapidly. This morning it broke above the high of last week's trading range on very high volume. This means that the move to 1350 has begun and I do not expect the market to drop much below the 1300 level in the meantime.
My best guess now for the timing of the bull market top (1350 or higher) is early June. This would coincide with the standard time projection for Lindsay's domed house formation as well as with a top-to-top count and a low-low-high count.
Gold
Here is a daily chart of June gold showing the last $150 of the bull market advance since November of 2005.
Soon after I started this blog a year ago I said that the bull market in gold would carry into the 500-540 range. Once the market reached that range I started to look for signs that the bull market from the 252 level in 1999 was over. But the market has proven consistently stronger than I have expected.
You can see from the chart that resistance at 598 has been left behind and from this I conclude that the market is headed for stronger resistance near 661, the 2 5/8 multiple of the 252 low.
Note how the upswings in gold have been very regular. The last two were $82 and $84 in length and at the 622 level the market will have moved up $82 from its last swing low. This is reason to expect some sort of reaction from 622 but if one develops it should not drop the market below 578 at which point it would equal the length of each of the two preceeding reactions.
Looking at the hourly chart which sits above the daily chart you can see that the hourly swings have not yet shown any sign that a drop to 578 has started - no shortening of upswings or deepening of reactions, no sequence of lower tops, etc. Given the bull market target is now 661 I think that it would be a mistake to expect more than a 10-15 dollar drop from here until and unless the hourly swing chart starts to show some definite bearish indication.
Guesstimates on April 18 , 8:50 am ET
June S&P Futures: I think that the 1289.25 level will hold and that the initial phase of a rally above 1330 is about to begin.
June Bonds: I still think the bonds are likely to drop to 106-24 before a substantial rally starts. Resistance today is at 107-20.
June 10 Year Notes: The notes should hold support at 105-08 and then rally at least to 106-00.
US Dollar -Euro: The market is now headed for 123.80 and then to 125.00.
May Crude: The market is headed for 74.30, the 7 5/8 multiple of the all time low at 9.75.
June Gold: Gold has moved significantly above the 598 level which is the2 3/8 multiple of the 252 low. I now expect the market to rally to the 2 5/8 multiple at 661.
May Silver: Silver moved well above 1272 resistance overnight so I now believe that the market is headed for the 4 1/8 multiple of the 351 low which is at 1448.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
June Bonds: I still think the bonds are likely to drop to 106-24 before a substantial rally starts. Resistance today is at 107-20.
June 10 Year Notes: The notes should hold support at 105-08 and then rally at least to 106-00.
US Dollar -Euro: The market is now headed for 123.80 and then to 125.00.
May Crude: The market is headed for 74.30, the 7 5/8 multiple of the all time low at 9.75.
June Gold: Gold has moved significantly above the 598 level which is the2 3/8 multiple of the 252 low. I now expect the market to rally to the 2 5/8 multiple at 661.
May Silver: Silver moved well above 1272 resistance overnight so I now believe that the market is headed for the 4 1/8 multiple of the 351 low which is at 1448.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
Monday, April 17, 2006
S&P Update
Here is a 15 minute chart showing regular hours trading in the June S&P e-mini futures. Above it you will find a chart of the daily count of the number of issues on the New York Stock Exchange which advance in price as well as the five day moving average of this number.
Earlier today I said that the breakout below last week's low at 1289.25 meant that the market would drop lower to 1278. But soon after the S&P started to rally and continued upward to 1293 by the close. This brought it back above the 1289 support level and made the move below 1289.25 look like a shake-out (with me among the shooken) instead of a break-out. If I am right about this the market will not drop below 1289 and will soon be trading above 1300.
There is an important piece of evidence supporting this shake-out interpretation and it is the behavior of the advancing issues numbers.
As you can see on the chart the daily number on April 7 reached a level lower than any reading but one during the past 21 months. That reading occurred in October 2005 just before the low at 1172. Note that since April 7 the daily reading has been zig-zagging higher while today the market made a new low for the drop from 1324. This is a bullish divergence.
Note also that the 5 day moving average dropped last week to a level last reached only at the low points of April and October 2005. While I don't place much emphasis on such "oversold" readings I do think they are significant when they occur at a higher low within an uptrend. This is the case for today's potential low within the uptrend from 1172 last October since the previous reaction ended at 1266.
All in all it looks like the S&P is about to start a strong move to the 1350 level.
Crude Oil
Here is an hourly chart showing pit and electronic trading in May crude oil.
I had expected the market to stall at resistance near 69.40 which is the 7 1/8 multiple of the 1986 low at 9.75. As you can see in the chart the market spent the entire day today trading well above that resistance. I conclude that it is now heading for the 74.30 level which is th 7 5/8 multiple of 9.75.
I had expected the market to stall at resistance near 69.40 which is the 7 1/8 multiple of the 1986 low at 9.75. As you can see in the chart the market spent the entire day today trading well above that resistance. I conclude that it is now heading for the 74.30 level which is th 7 5/8 multiple of 9.75.
T-bonds
Here is a daily continuation chart of the T-bond futures going back to the June 2005 high at 119-23.
I think the market is getting close to the point where a rally of 5 points or so is likely to develop.
My reasoning is simple. There have been three important downswings within the drop from 119-23. The first one carried down about 6 points and was followed by a 5 point rally. The second carried the market down about 8 points and then was followed by another 5 point rally. At the 107-05 level the June '06 bond futures were 8 points below their January '06 top of 115-05. The market is now at a juncture where any technical evidence that the drop from 115-05 is ending will also imply a move up into the 111-112 range.
S&P
Here is a 15 minute bar chart of the June S&P e-mini futures. I last commented on this chart here.
I had been expecting the 1289.25 low to hold, especially after the market made a second higher low at 1292.75 late last Thursday. But a few minutes ago the S&P broke to 1287.50. I think this breakout is genuine and means that the market is headed down to 1278. The two bearish clues that are significant here are the high volume on the breakout bar, higher volume than was seen on the last two visits to 1289, and the fact that the swing down from today's high of 1299.25 is deeper than the two preceeding swings and shows an obviously higher downside velocity.
A drop to 1278 would make the break from 1324 equal in length to the drop from 1301 to 1255 in January 2006 which was the biggest reaction within the move up from the 1172 low in October 2005. I still think that the market is headed for 1350 over the next couple of months.
Guesstimates on April 17 , 8:50 am ET
June S&P Futures: I think that the 1289.25 low will hold and that the initial phase of a rally above 1330 is about to begin.
June Bonds: The bonds should hold support at 106-24 and then rally at least a point or two.
June 10 Year Notes: The notes should hold support at 105-08 and then rally at least to 106-00.
US Dollar -Euro: The market has turned upward without reaching my 119.90 target an is now headed for 123.80 and then to 125.00.
May Crude: The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has moved significantly above the 598 level which is the2 3/8 multiple of the 252 low. I now expect the market to rally to the 2 5/8 multiple at 661.
May Silver: Silver moved well above 1272 resistance overnight so I now believe that the market is headed for the 4 1/8 multiple of the 351 low which is at 1448.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
June Bonds: The bonds should hold support at 106-24 and then rally at least a point or two.
June 10 Year Notes: The notes should hold support at 105-08 and then rally at least to 106-00.
US Dollar -Euro: The market has turned upward without reaching my 119.90 target an is now headed for 123.80 and then to 125.00.
May Crude: The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has moved significantly above the 598 level which is the2 3/8 multiple of the 252 low. I now expect the market to rally to the 2 5/8 multiple at 661.
May Silver: Silver moved well above 1272 resistance overnight so I now believe that the market is headed for the 4 1/8 multiple of the 351 low which is at 1448.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
Thursday, April 13, 2006
S&P
Here is a 15 minute bar chart showing regular hours trading in the June S&P e-mini futures. I last commented on this chart here.
I still think that the 1289.25 low will hold and that the market will soon be trading above the 1330 level. The reaction from today's high at 1299.25 should halt around the 1293 level. If it does this will be a second consecutive higher low and imply that a strong move above 1300 should develop early next week (all US markets are closed tomorrow).
I still think that the 1289.25 low will hold and that the market will soon be trading above the 1330 level. The reaction from today's high at 1299.25 should halt around the 1293 level. If it does this will be a second consecutive higher low and imply that a strong move above 1300 should develop early next week (all US markets are closed tomorrow).
Guesstimates on April 13 , 8:50 am ET
June S&P Futures: I think that the 1289.25 low will hold and that the initial phase of a rally above 1330 is about to begin.
June Bonds: The bonds dropped to 107-05 this morning, a tad below the 107-08 target I cited in yesterday afternoon’s post. I think the next development will be a rally to 109-00.
June 10 Year Notes: The notes should hold 105-16 and then rally to 106-20.
US Dollar -Euro: The market is now in the third phase of its correction from 123.31. I am expecting a low near 119.90 and then a move up to 125.00.
May Crude: The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has reached my 605 target. The next big move will be downward.
May Silver: Silver has traded as high as 1301 but I think that resistance at 1272 will hold and that a big break lies just ahead.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
June Bonds: The bonds dropped to 107-05 this morning, a tad below the 107-08 target I cited in yesterday afternoon’s post. I think the next development will be a rally to 109-00.
June 10 Year Notes: The notes should hold 105-16 and then rally to 106-20.
US Dollar -Euro: The market is now in the third phase of its correction from 123.31. I am expecting a low near 119.90 and then a move up to 125.00.
May Crude: The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has reached my 605 target. The next big move will be downward.
May Silver: Silver has traded as high as 1301 but I think that resistance at 1272 will hold and that a big break lies just ahead.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
Wednesday, April 12, 2006
Board of Trade
Here is a daily bar chart of the Chicago Board of Trade. I last disussed BOT here.
I think BOT has further to go in its bull market. My target is 148 and that may prove to be conservative.
Chicago Merchantile Exchange
Here is daily chart of the Chicago Merchantile Exchange. I last commented on CME here.
CME continues to be the leader of the bull market. It has reached my revised upside target near 500 but shows no signs of weakness. On this basis I think a conservative guess would be that the market will continue up to 522.
Sears Holdings
Here is a condensed daily bar chart of Sears Holdings. I last discussed SHLD here.
After several months of underperformance SHLD is once again doing better than the market averages. I think it now has a good shot at 154 vs. my earlier target of 148.
S&P
Here is a 15 minute bar chart showing regular hours trading in the June S&P e-mini futures.
I still think the market has completed the drop from 1324. I have found that more often than not the first phase of a new advance looks like it may only be a correction. With this in mind I note that the move up from yesterday's low at 1289.25 does not have three distinct phases. So I am expecting the drop from today's high to end near 1290 and to be followed by a move to 1300 or so. After that it is likely that the market will again visit the 1290 level in preperation for a subsequent move to 1330 and higher.
T-bonds
Here is a 30 minute bar chart showing pit and electronic trading in the June T-bond futures.
The market made it up to 108-18 overnight, just a tad above the 108-16 level I thought would be initial resistance. The subsequent break has been deeper and faster than I had expected. Since the drop from 108-18 does not yet show a three phase structure I don't think is is over yet. Instead I expect to see a small rally from the 110-17 level, the low reached Sunday night, followed by a drop to 107-08 or so. Then I'll be looking for a move up to109-00.
Guesstimates on April 12 , 8:50 am ET
June S&P Futures: The market dropped about 6 points below support at 1296 yesterday but I expect a bullish day today which will be the initial phase of a rally above 1330.
June Bonds: The bonds have reached minor resistance near 108-16 but after some hesitation the market should continue up to 109-08.
June 10 Year Notes: The notes should rally to 106-16.
US Dollar -Euro: The market never made it to 122.10 and is now in the third phase of its correction from 123.31. I am expecting a low near 119.90 and then a move up to 125.00.
May Crude: The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has reached my 605 target. The next big move will be downward.
May Silver: Silver has traded as high as 1301 but I think that resistance at 1272 will hold and that a big break lies just ahead.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
June Bonds: The bonds have reached minor resistance near 108-16 but after some hesitation the market should continue up to 109-08.
June 10 Year Notes: The notes should rally to 106-16.
US Dollar -Euro: The market never made it to 122.10 and is now in the third phase of its correction from 123.31. I am expecting a low near 119.90 and then a move up to 125.00.
May Crude: The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has reached my 605 target. The next big move will be downward.
May Silver: Silver has traded as high as 1301 but I think that resistance at 1272 will hold and that a big break lies just ahead.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely. Support is at 402.
Tuesday, April 11, 2006
S&P Update
Here is a 15 minute bar chart showing regular hours trading in the June S&P e-mini futures. I commented on this chart earlier today.
Looking at the volume line beneath this chart I conclude that the selling pressure on the market has been easing. Since the downswings have been shortening too and since we are still near support around 1296 I conclude that the drop from red point C is probably complete. I shall be convinced of this once the market rallies back above the 1300 level.
The next big move from here will be to 1330 and higher.
Crude Oil
Here is a condensed hourly chart of pit and electronic trading in May crude oil futures.
The market has rallied to very strong resistance at 69.50, the 7 1/8 multiple of the 1986 low at 9.75. It is also just a shade below the tops at 70.90 in September 2005 and January 2006. This means that if the market falls from here as I expect it to we will be seeing the second lower top on the monthly bar chart and a triple top to boot, a very bearish configuration.
Will the market drop from here?
So far there is little evidence based on the swings up from blue point C. The drop from black point l at 69.45 is not yet longer than the preceeding two breaks j-k and h-i. But as I mentioned above resistance above the 69.00 level is strong so I am betting that the drop from the high at l will break the low or 66.15 at k. This in turn would mean that the whole move up from 60.20 is complete and that a big break below 60.00 has begun.
Silver
Here is an hourly chart showing pit and electronic trading in May silver.
I think the move up has reached at least a temporary high at 1301. Here's why.
First of all the market has reached a strong resistance level at 1273, the 3 5/8 multiple of the 1991 low at 351. So far it hasn't been able to close above this level. This fact sets the stage.
Next note that the drop from the 1301 top at point l is bigger than the two preceeding breaks, g-h-i and j-k. Also the market has broken below the previous low at point k and then rallied to a lower top.
The next big move from here will be downward.
Gold
Here is a condensed hourly chart showing pit and electronic trading in June gold futures.
The market has reached 605 resistance and is trading only a little above the 598 level which is the 2 3/8 multiple of the 252 low in 1999. As I mentioned in my last post gold is showing early signs of an end to its uptrend.
Right now I am looking for indications that the 608 level reached overnight is the high. One indication would be a break below 596 which would tell me that the swing up from g to h is over. Another, possibly earlier indication would be the formation of two consecutive tops lower than the 608 high. Any weakness after the rally to the second lower top would be a warning that 596 will be broken and that a big drop is about to start.
S&P
Here is a pair of 15 minute bar charts showing regular hours trading in the June S&P e-mini futures. I last commented on these charts a few days ago.
The market has dropped to 1296.25 so far, just a tad above the support level at 1296. On the second chart above this post you can see that the move down to the low so far shows climactic volume. I think this will turn out to be the point of maximum selling pressure on the market. I expect a rally of 5-6 points followed by a slightly lower low (maybe 1294) on significantly reduced volume. At that juncture the drop from red point A on the first chart will probably be complete.
The next big move should carry the market up above 1330.
T-bonds
Here is a highly condensed hourly chart showing pit and electronic trading in the June T-bond futures.
I think the swing down from blue points B to C is complete and that the market is staging a classic three phase advance to 109-04. At that price the projected rally C to D will equal the last rally from A to B.
Note that the advance from black point f has already exceeded the length of the rally from d to e. Moreover the swing down from e to f was shorter than the swing down from c to d. This together with the fact that the market put in two consecutive higher lows on the hourly chart after the low at 107-17 is evidence in favor of a rally to 109-04.
Guesstimates on April 11, 8:50 am ET
June S&P Futures: The market should reach support at 1296 soon and then rally to new highs.
June Bonds: The bonds should rally to at least 108-16.
June 10 Year Notes: The notes should rally to 106-08.
US Dollar -Euro: The market should rally to 122.10. At the moment I can’t decide whether this will be the start of a move up to 125.00 or just the second phase of a three phase correction from 123.31.
May Crude: The market has moved a bit past resistance at 68.60 but the next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has reached my 605 target. The next big move will be downward.
May Silver: Silver traded as high as 1301 overnight but I think that resistance at 1272 will hold and that a big break lies just ahead.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely.
June Bonds: The bonds should rally to at least 108-16.
June 10 Year Notes: The notes should rally to 106-08.
US Dollar -Euro: The market should rally to 122.10. At the moment I can’t decide whether this will be the start of a move up to 125.00 or just the second phase of a three phase correction from 123.31.
May Crude: The market has moved a bit past resistance at 68.60 but the next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has reached my 605 target. The next big move will be downward.
May Silver: Silver traded as high as 1301 overnight but I think that resistance at 1272 will hold and that a big break lies just ahead.
Google: GOOG is on its way to 440 and I now believe that continuation up to 495 is also likely.
Monday, April 10, 2006
Here is a daily chart of Google.
In my last post on GOOG I said that the market would probably finish a three stage reaction near the 400 level and then head for 440. The market never got as low as 400 and has now rallied above the 414 level. This means that it will soon reach 440.
I have been expressing doubt that GOOG would reach 495 during the current bull market, but the strength of the move up from 331 now makes me believe that we will see the 495 level in a month or two.
Gold and Silver
Here are hourly charts showing pit and electronic trading in June gold and May silver futures.
The contrast between these two markets is striking.
The last reaction in gold from f to g was much bigger in price than the preceeding reactions while the reaction from d to e was much longer in time than the preceeding reactions. This is a sign of technical weakness especially because the 598 level is the 2 3/8 multiple of the 252 low in 1999. This is a technical warning that the current rally is likely to end near resistance around 605 and will be followed by a drop below point g. This in turn would have more serious bearish implications.
No such weakness is visible in the silver chart. If anything the successive reactions within the uptrend have been getting shorter. Even so, the market is nearing very strong resistance near 1273, the 3 5/8 multiple of the 1991 low at 351. The steadily accelerating upmove in silver is a warning that the bubble is about to pop and when it does it will be difficult to get out of long positions on the way down.
Top Pickers At Work
Here is a highly condensed chart showing the daily count over the past two and a half years of the number of issues on the New York Stock Exchange that advance in price. The blue line you see on the chart is drawn at the level reached by Friday's daily count of advancing issues.
Here is what I think is remarkable about this chart. You can see that the daily count of advancing issues rarely drops to a level as low as last Friday's. Only once in the past 21 months was it lower. This was on October 5, 2005 when the market was in the terminal stages of a drop from an early September top.
Yet both the S&P 500 and the Nasdaq composite reached new bull market highs on Friday before the big break started! Normally one sees a low advancing issues number like Friday's towards the end of an extended drop, not at its very beginning. So what was going on?
I think that a lot of traders have decided that this bull market is over and are trying to pick the top by selling breakouts to new highs. Maybe they will be right, but I don't think so. There is just too much willingness to fade this advance among technical types. So I am willing to bet that in a week or two the market is going to be right back at new bull market highs.
Guesstimates on April 10 , 8:50 am ET
June S&P Futures: The market should reach support at 1296 soon and then rally to new highs.
June Bonds: The overnight low at 107-17 should hold for a few days and the bonds should rally to at least 108-16.
June 10 Year Notes: The overnight low near 105-20 should hold for a few days and the notes should rally to 106-08.
US Dollar -Euro: The market should rally from 121.00 to 122.10. At the moment I can’t decide whether this will be the start of a move up to 125.00 or just the second phase of a three phase correction from 123.31.
May Crude: The market will rally to 68.80 before turning lower. The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has nearly reached my 605 target. The next big move will be downward.
May Silver: Silver has exceeded all my upside targets. Next resistance is at 1272. the 3 5/8 multiple of the 1991 low at 351.
Google: I am convinced that GOOG is on its way to 440 although a move to 495 no longer seems likely. Support is at 398.
June Bonds: The overnight low at 107-17 should hold for a few days and the bonds should rally to at least 108-16.
June 10 Year Notes: The overnight low near 105-20 should hold for a few days and the notes should rally to 106-08.
US Dollar -Euro: The market should rally from 121.00 to 122.10. At the moment I can’t decide whether this will be the start of a move up to 125.00 or just the second phase of a three phase correction from 123.31.
May Crude: The market will rally to 68.80 before turning lower. The next significant move will be downward to 56.80-57.20. I think that over the next few months the market will drop to 52.00 or lower.
June Gold: Gold has nearly reached my 605 target. The next big move will be downward.
May Silver: Silver has exceeded all my upside targets. Next resistance is at 1272. the 3 5/8 multiple of the 1991 low at 351.
Google: I am convinced that GOOG is on its way to 440 although a move to 495 no longer seems likely. Support is at 398.
Friday, April 07, 2006
Here is a 15 minute bar chart of Google. I last discussed this chart here.
I think GOOG is in the third and final phase of a reaction that began from 414.57. My best estimate is that the low of this phase will occur near the 400 level. The next development should be a rally to 440.
T-bond Update
Here is an updated 15 minute bar chart of regular hours trading in the June T-bond futures. I commented on this chart earlier today.
I think we have seen the day's low at 107-26 and that the market will rally between one and two points from here over the next few days.
Euro USD
Here is a 5 minute bar chart of cash trading in the cash EURO USD pair since yesterday's high at 123.31.
I think the market is about to complete a three phase decline at the 121.00 level. From there I think a three phase rally up to 122.10 is a reasonable expectation. I think it likely that the move to 122.10 will eventually continue up to 125.00.
Subscribe to:
Posts (Atom)