S&P

Here is a 15 minute chart of the June S&P e-mini futures. I commented on this chart yesterday afternoon.

I had believed that yesterday's low at 1304.75 would hold but today we completed a three phase rally to 1311.75 and then dropped to 1302.75. Once again the move down from blue point d has three distinct phases and the first two phases themselves were three phase moves. I think the market has ended its drop from yesterday's high at 1319 and is now about to rally to 1328.

 

Google

Here is an hourly chart of Google.

I expect the reaction from point d to assume a standard three phase shape. We have already completed the first two phases and I think the market will drop to 378 or so while completing the third phase of the drop. That would make the swing down to point e just a tad longer than the drop from b to c.

Once the d-e swing is completed I expect a rally into the 410-15 zone as the next development within a move to 440.

 

Nasdaq Composite

Here is a weekly bar chart of the Nasdaq Composite index. I last commented on this chart here.

This average made new bull market highs this week. The striking thing about this chart is the clearly defined sequence of higher lows, each of which terminates a reaction that was smaller than the preceeding reaction. This is a sign of a market that is gaining technical strength, not loosing it as so many market technicians seem to believe.

I think the Nasdaq compostite will easily reach my 2550 bull market target. The risk I see is that the market is much stronger than even I believe. If so the rally will carry further to the 2900 level.

 

Guesstimates on March 31 , 8:50 am ET

June S&P Futures: I expect the market to hold support at 1304 and then rally to 1328.  

June Bonds: The market is headed for its next short term target at 108-16. Resistance is at 109-14.

June 10 Year Notes: The notes are headed down to 105-16. Resistance is at 106-20.

US Dollar -Euro: The market is now headed down to 118.90. After that a move to 125.00 becomes likely.

May Crude: 66.95 is resistance and 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.

April Gold: I think gold has a good shot at 600.  Meantime 579 is support.

May Silver: Silver traded at1194 this morning and is now getting close to support at 1140. Upside target is 1205 after which I anticipate a big drop.

Google: I am convinced that GOOG is on its way to 405 and then to 440 although a move to 495 no longer seems likely. Support is at 377.  

 

Gold

Here is an hourly chart showing pit trading in April gold futures. Next week I am going to switch to the June contract which is currently trading about $5 over April. Keep this in mind when you read the rest of this post.

Gold has been underperforming silver lately and on this basis I concluded that the move up from point d on the chart would be a three phase correction ending below the bull market high at 579. But today the market gapped above that high and instead of finishing the day weak rallied sharply into the close. This convinces me that it is heading for resistance at the 598 level which is the 2 3/8 multiple of the 1999 low at 252. I think the market will take a quick peek above 600, a nice round number but that should be it. The next $ 100 from there should be downward.

 

S&P Update

Here is a 15 minute chart of regular hours trading in the June S&P e-mini futures.

I commented on this chart earlier this morning. Since then the drop from this morning's high has assumed a clear, three phase shape and the market has dropped as low as 1304.75, vs. my estimate of 1304. Moroever, there is a small volume climax visible at the extreme bar of the break and the volume there was visibly less than the high volume bar that ended the first phase of the correction. This shows that the bearish pressure on the market has decreased.

At this juncture I think that the three phases of the correction from this morning's high are complete and that market is about to resume its uptrend to 1328.

 

Silver

Here is an hourly chart of pit trading in May silver futures. Above that chart you will also see a monthly chart of silver futures trading going back to 1989.

I had been expecting a long term top in silver near the 1/2 point (950) of the second box up from the 351 low in 1999. But the market has proven much stronger than I was expecting. Today it actually has moved a bit above the top of the second long term box (at 1150) and traded as high as 1171.

I think the top of the second box at 1150 is going to be strong long term resistance and that the next big move will carry the market down to the 1/2 point of the box (950) or even to the bottom of the box (750). Meantime there is resistance above the market at the 3 3/8 multiple of the 351 low at 1185. Since the market has yet to start producing shorter swings within the move up from 915 I think it will probably hit 1205 before any break begins.

 

S&P

Here is a 15 minute bar chart of the June S&P e-mini futures.

A little before the pit opening this morning the market dropped to 1309 support and after the opening rallied to 1319, just a shade under the 1321.50 bull market high.

The subsequent break occurred on high volume and broke a little below 1309 support. The high volume means that we haven't seen the low of the drop from this morning's high yet, especially since it started from the high of a long trading range. Such moves typically go back to near the low of the trading range before they end.

So I now expect the drop from this morning's high to assume a typical three phase structure, with the second phase rally carrying the market up to 1312 or so. I am looking for the third phase to end near 1304. Once it is complete the next swing should carry the market to 1328.

 

Guesstimates on March 30 , 8:50 am ET

June S&P Futures: The market is on its way to 1328 and higher. Support today is at 1309.

June Bonds: The market is headed for its next short term target at 108-16.

June 10 Year Notes: The notes are headed down to 105-16.

US Dollar -Euro: The rally from yesterday’s low at 119.78 now looks like the third phase of the move up from 119.51 and as such should reach the 121.20 level.  Then the market should turn downward to 118.90.  After that a move to 125.00 becomes likely.

May Crude: 66.95 is resistance and 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.

April Gold: The market traded about $6 above my 574 target overnight and reached a new bull market high by a dollar or so.  Nonetheless I think the next big move will be downward from here and resistance today will be at 583.

May Silver: Silver traded at1152 this morning, way above my 1108 target. Even so I think the market will close below 1140 today and begin a sustained drop.

Google: I am convinced that GOOG is on its way to 405 and then to 440 although a move to 495 no longer seems likely. Support is at 377.  

 

Silver

Here is an hourly chart of pit trading in May silver futures.

The market has reached my revised target at 1108 and I think it is about to begin a break to 920 or so.

 

Gold

Here is an hourly chart of pit trading in April gold.

The market has reached the 574 resistance level and I think it is about to turn downward from here and drop below 500.

 

S&P Details

Here is a line chart showing prices at one minute intervals during regular hours trading in the June S&P e-mini futures.

I have labeled the swings since yesterday's low at 1300.25. The important thing to notice is that the current swing upward from point e is the longest of the upswings in both price and time. Moreover, volume has steadily increased on this upswing. As I observed in my previous post the entire move up from point a has already exceeded the length of the biggest rally in the correction from 1321.50 to 1300.25.

All these facts are signs of a strong market and are telling me that the move up from point a has a lot further to go.

 

S&P

Here is a 15 minute chart of regular hours trading in the June S&P e-mini futures.

I was expecting a dip below 1300 towards support at 1297 but this didn't materialize. The market dropped as low as 1300.25 yesterday and as you can see has rallied strongly today.

What catches my attention in this chart is that the rally from yesterday's low has continued on relatively high volume compared to the volume on the uplegs from dd to ee and from ff to gg. Moreover, just a short while ago the entire rally from blue point d has exceeded the length of the rally from blue b to blue c. Since the entire reaction from the 1321.50 level, blue a-b-c-d, has a clear three phase structure I conclude that we have seen the reaction low at 1300.25.

Now the market should head up to 1328 and eventually to 1350 by late April or early June.

 

Google

Here is a daily chart of Google.

The market has absorbed a lot of bad news over the past couple of months. On February 1 earnings news drove GOOG to a low of 350. On February 13 Barron's ran a very negative cover story on Google which drove the price down to 337. On February 28 Google's CFO made some stray remarks during a conference call with analysts to the effect that no tree grows to the sky and GOOG lost 60 points in an hour.

By the time GOOG reached the 331.55 low on March 10 it was evident from my e-mail and comments on this blog that there was a great deal of bearishness on GOOG. But what impressed me at the time is that depsite all the upset, GOOG was trading less than 20 points below the level it had reached after the February 1 earnings announcement. This was a sign that there was strong buying on bad news by people who were not likely to sell on small rallies. This in turn implied that the market would head substantially higher, to 495 I thought.

On March 24 GOOG gapped higher on the news that it would be added to the S&P 500. I regarded this as a warning that the 495 level would not be reached this cycle. But I thought then and still think now that GOOG will rally at least to the 440 level, which is the 4 5/8 multiple of its 95.96 trading low in 2004 after its IPO.

Shorter term I expect GOOG to reach resistance in the 397-400 zone at the 4 1/8 multiple of the 95.96 low before another reaction becomes likely.

 

T-bonds

Here is a 15 minute bar chart showing regular hours trading in the June T-bond futures.

Yesterday after the Fed announcement I said that the breakout to new lows below 109-31 looked like a fakeout to me. If I was to be right about that the market should have recovered this morning and stayed above yesterday's low at 109-27.

Instead the bonds dropped below 109-27 and and are maintaining the pace of the downmove on continuing high volume. I think this means that the June bonds will not move substantially above 110 before they drop to 108-16.

 

Guesstimates on March 29 , 8:50 am ET

June S&P Futures: I think we shall see a brief dip below 1300 towards 1297 support and then a move up to 1328.  

June Bonds: So far there has been no follow-through to the downside breakout yesterday on the Fed news. This makes me think that the market is now going to rally to 111-18 before the drop into the 107-108 zone resumes.

June 10 Year Notes: Unlike the bonds the notes did not make new lows after the Fed news yesterday. I think this means that the market will rally to 107-30. After that the drop to 104 will resume.  

Cash US Dollar -Euro: I expect a break to 118.90. After that a move to 125.00 becomes likely.

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.

April Gold: I think gold will rally to 574. It is acting noticeably weaker than silver so I think the bull market here is on its last legs.  

May Silver: Silver can make it up to 1108 before a substantial drop begins.  

Google: I am convinced that GOOG is on its way to 405 and then to 440 although a move to 495 no longer seems likely. Support is at 363.  

 

T-bonds

Here is an hourly chart of regular hours trading in the June T-bond futures.

I have been looking for a rally into the 111-24 to 111-28 zone. Instead the market has made new lows for the move down from its January high at 115-05. I am suspicious of this apparent breakout because it occurred just after today's Fed announcement. Moroever, neither the June 10 year note futures nor the September 3 month eurodollar futures accompanied the bonds to new lows for their downmoves. Finally, the bond breakout occurred on what could well be a volume climax bar.

So I am going to go out on another of my limbs and guess that the June T-bonds are going to stage a three phase rally back to the top of their current trading range before any substantial drop from current levels develops.

 

Crude Oil

Here is an hourly chart of May crude oil futures.

I had been looking for a rally to 65.30 but the market so far has moved a little higher to 65.80. This is actually a new high for the rally from blue point A because what looks like the high bar on the chart was in fact a data transmission error.

The 65.80 print gives the whole rally, blue A-B-C-D, a clear three stage appearance. The move up, black a-b-c-d, also has a three stage appearance. I think the next big move will be downward from here into the 56.80-57.20 zone.

 

US Dollar/ Euro

Here is an hourly chart of the cash US Dollar / Euro pair.

As you can see the market has rallied a little past 120.80 resistance in a clear three phase move. I think that the next swing will be downward to 118.90 and will be the third and final phase of the drop from 122.07. The I am expecting the market to rally to 125.00.

 

Be Worried. Be VERY Worried.

So exhorts Time Magazine on its latest "black" cover for the April 3, 2006 issue.

Of course, global warming has little to do with the stock market. But what interests me is not the ostensible subject of the cover itself. Instead it is the fact that Time thinks there is a good market for scare stories among its readers. This is evidence of a prevailing pessimism among Time readers, pessimism that I think will not permit any sustained drop in stock prices during the mini-bear market I think we shall experience during the second half of this year.

Indeed, if my 2006 stock market forecast is going to be off base in any substantial way I think it will be because US stock prices rise far more this year than I am currently antipating.

 

Guesstimates on March 28 , 8:50 am ET

June S&P Futures: I still think the market will drop to 1297 or so and then move to 1328.

June Bonds: The bonds didn’t hold support at 110-30 but I think they will hold the 110-14 level and then rally to 111-28. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes should rally to 107-30. After that the drop to 104 will resume.  

Cash US Dollar -Euro: Resistance at 120.80 was hit this morning in the third phase of a clear, three phase rally. I now expect a break to 118.90. After that a move to 125.00 becomes likely.

May Crude: The 65.30 level is resistance. After that is hit 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.

April Gold: I now think gold will only rally to 574. It is acting noticeably weaker than silver so I think the bull market here is on its last legs.  

May Silver: Silver can make it up to 1108 before a substantial drop begins.  

Google: I am convinced that GOOG is on its way to 405 and then to 440 although a move to 495 no longer seems likely. Support is at 356.  

 

Crude Oil

Here is an hourly chart of pit trading in May crude oil futures.

I have changed my short term expectation for this market. The rally from the 61.25 level still has not assumed a classic three phase shape. For this to happen the market will have to move up to 65.30. Once it reaches that level I shall be looking for a move down into the 56.80-57.20 zone.

 

Gold

Here is an hourly chart showing pit trading in April gold futures.

The rally from the 534 level has assumed a classic three phase shape and will probably end near resistance at 574, about $5 below the bull market high. Once the top is made I expect a drop below the 500 level to begin.

 

Silver

Here is an hourly chart showing pit trading in May silver futures.

The market has rallied as far as 1092 vs. my target of 1098 at the 3 1/8 multiple of the 351 low in 1991. Note that the current upswing from point h is longer than the previous two upswings. This together with the fact that gold still has some way to go to get to my current 574 target means that silver will probably rally to 1108 before beginning a big reaction.

 

T-bonds

Here is a 15 minute bar chart of June T-bond futures.

I think this market will soon enter the third and final phase of its rally from the 110-13 level at point A in blue. Note how the second phase ( blue B to C) itself is taking on a three phase appearance. The third phase, black c to d, should stop at support near 110-30 and thus be shorter in time and price that the first phase, black a to b. This together with the fact that volume is visibly dropping on the break from blue point B is more evidence that the market is headed for 111-28.

After 111-28 is reached the bonds are likely to drop below 110.

 

Dow Industrials Monthly

 

Basic Advances and Declines

George Lindsay often asserted that there was a great deal of regularity in the duration of bull market advances and bear market declines. He believed that his theory of Basic Advances and Basic Declines, when coupled with simple technical methods based on the number of advancing issues on the New York Stock exchange, outperforms any other timing method.

Basic Advances and Basic Declines are intervals of time, usually (but not always) starting at bear market lows and bull market highs respectively. Lindsay observed that the durations of these time intervals seemed to cluster around certain specific numbers. He grouped these numbers into categories. For example, a basic advance could either be subnormal, normal, long or extended. He made several other observations about basic advances and declines which help to anticipate the length of the current one. For more on this theory you should read Lindsay's article "Counts from the Middle Section" which is reprinted in the booklet "Selected Articles by the Late George Lindsay".

The chart above records the monthly ranges of the Dow Jones Industrial average since 1998. I have drawn green and red lines on the chart showing my current estimates of the postions of Lindsay's basic advances (green lines) and declines (red lines).

In my 2003, 2004, 2005 , and 2006 stock market forecasts I worked under the hypothesis that a basic advance began in March 2003 at point A in the chart above. If this were correct then this basic advance should have ended after March 2005 but no later than December 2005, point AA in the chart. As you can see the Dow has gained strength during these first three months of 2006 and this has convinced me to set aside this hypothesis.

Instead I now think that the Dow is nearing the end of two subnormal basic advances, one which began from the October 25, 2004 low and the other from the April 20, 2005 low. Both these subnormal advances followed on the heels of extended advances as they should. I think subnormal advances make sense here because any longer advance would put the top further away from the 15 year, 3 months projection of a major top for January 2006. Longer advances would also be inconsistent with the imminent completetion of the Three Peaks and a Domed House formation.

The best agreement I can come up with for the end of these two subnormal advances is the May 25 - June 5 2006 time period. This is spot on with the standard time projection from point 14 of the Domed house of 7 months 10 days. This makes me think that my projection of a bull market top for April 25 is now somewhat less likely to be correct than the projection of a top for roughly June 5.

 

Guesstimates on March 27 , 8:50 am ET

June S&P Futures: I still think the market will drop to 1297 or so and then move above 1320.

June Bonds: The bonds are headed for 111-28. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes are headed for 107-30. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: Resistance is at 120.80. Another break to 118.90 should follow this rally. After that a move to 125.00 becomes likely.

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.

April Gold: I now think gold will only rally close to its February top at 579. It is acting noticeably weaker than silver so I think the bull market here is on its last legs.  

May Silver: Silver has nearly reached 1095.  I think gold has a more to go on the upside so I now think silver can make it up to 1108 before a substantial drop begins.  

Google: I am convinced that GOOG is on its way to 405 and then to 440 although a move to 495 no longer seems likely. Support is at 356.  

 

S&P Update

Here is an updated 15 minute chart of the June S&P e-mini futures.

This morning I thought that the sudden reversal from 1308 heralded a breakout to 1328. Instead the market dropped below yesterday's close (dashed line) which meant that this morning's move was another fake-out.

It now looks like today's high ended the third phase of a correction from 1305.25, labeled dd -ee-ff-gg on the chart. This upward correction was itself the middle, upward phase of a larger three phase correction downward from the 1321 level with the blue labels a-b-c-d. I think point d will develop near what I see is support around the 1297 level. After point d is reached I expect a move upward to 1328 and higher.

 

T-bonds

Here is an hourly chart of June T-bond futures.

I was expecting the market to move below 109-31 but the news this morning gave it a second wind. I now think that the move up from yesterday's 110-14 low is part of the third and final phase of a three phase reaction that began from point a. I am expecting the high at point d, roughly at the 111-24 level. After that the market should move below 110.

 

S&P

Here is a 15 miute chart of the June S&P e-mini futures.

Yesterday I explained why I was still looking for a move down to 1297. This morning the market dropped to 1308 but then made a high volume U-turn. Since I am still very bullish I have to respect the market's action and now will expect a move to 1328. If I am right about this I don't think the market will drop below yesterday's close at 1312 (dotted line).

 

One More Nail

Here is a 15 minute chart of Google.

After the close yesterday it was announced that on March 31 GOOG will join the S&P 500 index. I have to admit that this rubs my contrarian nerves the wrong way.

For one thing, it is a solid piece of evidence that the bull market in the averages is nearing its end. My prediction has been for a top on April 25 with the potential of delaying that until June 5. So the Google announcement adds to my confidence that the upswing to 1350 will be the last of the bull market which started in 2002.

As far as GOOG itself goes, this is good news in the short run but looking ahead more than a couple of months I think it means that 475 was the bull market top in GOOG. The best we can expect now is a rally into the upper 1/3 of the 331-475 trading range, perhaps to 440 or so, followed by a break below 300 in GOOG.

I still think the 331 low reached on March 10 will hold and that the market is on its way to 44o or so. Looking at the chart above this post you can see that the swing from c to d is longer in price than the swing up from a to b. If GOOG is as strong as I think then any reaction from today's high should be no greater than the length of the swing down from b to c, i.e about 13 points. This would put support near 356. My secondary support is at 351 at which price a drop from 369 would be 18 points, the length of the biggest reaction so far in the move up from 331.

 

Guesstimates on March 24 , 8:50 am ET

June S&P Futures: I still think the market will drop to 1297 or so and then move above 1320.

June Bonds: The bonds are headed downward. Resistance today is still at 111-08. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes are headed downward from here. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: A bounce from 119.60 is likely but probably will only be 100 points or so. This is still only the first phase of a drop from 122.07 and the third and final phase will probably reach 118.90. Once all three phases are complete I think the market will move to 125.00.

May Crude: I thought the rally would stop at 63.25 resistance but it went a full dollar higher.  Even so, 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.

April Gold: I now think gold will only rally close to its February top at 579. It is acting noticeably weaker than silver so I think the bull market here is on its last legs.  

May Silver: I think that silver is headed  for 1095.  

Google: I expect support at 334 to hold and after that Google should rally to 358 or higher. I am still convinced that continuation up to 405 and then to 495 is very likely.

 

US Dollar / Euro

Here is an hourly chart of cash trading in the US Dollar / Euro pair.

I thought this market would rally from support at 120.90 to a lower top and then drop to 120.00, thus completing a three phase reaction. As you can see from the chart no rally developed and since then we have dropped below support at 120.20. I think this market will hold 119.60 and then rally into the 120.70 - 120.90 zone. From there the third phase of the drop from 122.07 should carry prices down to 118.90.

Once this correction from 122.07 is over I am looking for a rally to 125.00. I shall stick with that view unless prices break below the 118.25 level.

 

S&P

Here is a 15 minute chart of the June S&P e-mini futures.

I don't think the drop from point ee is over yet. The swing from ee to purple point a does not have a three phase look to it and worse, the volume on the drop from ee to a was high and increasing. Morevover, the rally a-b-c-d has a clear, three phase look to it and occurred on low volume. It ended with a minor volume climax at point d.

I think the market is headed down from here, probably to support near 1297. Once this correction is complete I expect a move that will carry the S&P's to 1350 by the end of April.

 

Silver

Here is an hourly chart of pit trading in May silver futures.

I believe that the market is on its way to 1098 from which point a drop of $2.00 or so is likely.

I have labeled several swings on the way up from point a. The main this to observe is that we see a clearly defined sequence of higher lows. The second fact that interests me is that the swing up from f to g exceeded the previous swing up d to e in both price and time. The subsequent correction g to h was shorter in price and time than the preceeding corretion e to f. This tells me that the market is gathering strength. There is every reason to believe that the 1098 level will be reached soon.

 

Weekly Chart of Nasdaq Composite Index

 

Nasdaq Composite

Here is a weekly chart of the Nasdaq composite index. I last commented on this chart here.

The sequence of higher lows is telling us that the bull market which started from the 1108 level in 2002 is still alive and well. My current upside target is the 2550 level which is just a tad lower that 1/2 the all time high in this index at 5133 in 2000.

 

T-bonds

Here is an updated 15 minute bar chart of the June T-bond futures. I disussed this chart yesterday.

I was expecting a rally to point g at 111-08 but this morning the market only was able to make it back to 111-04. Subsequently we have seen high volume as prices have accelerated downward. This tells me that the market is on its way below 109-31.

 

Gold

Here is an hourly chart of pit trading in April gold futures.

I believe that the threee phase correction marked by the blue letters a-b-c-d is over and that it will be followed by a three phase move upward. I have been predictin a move to 598 but gold is underperforming relative to silver so I now think that the February top near 579 is a better target.

You can see that I have marked a three phase correction downward aa-bb-cc-dd in black letter. This morning the market reached support at 545 and I think the next move will be upward to 579. This will be the third and final phase of the entire move up from point d at 534.

 

Crude Oil

Here is an hourly chart showing pit trading in May crude oil futures.

The market is in the third phase of a three phase rally which I have labled a-b-c-d. I expect point d to occur near 63.25 resistance. The subsequent drop should carry the market below 60.00 and into my 56.80-57.20 target zone.

 

Guesstimates on March 23 , 8:50 am ET

June S&P Futures: I think the market will drop to 1297 or so and then move above 1320.

June Bonds: The bonds are headed downward. Resistance today is t 111-08. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes are headed downward from here. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: Support is 120.20 but so far we have seen only the first phase of a three phase correction. Resistance is 121.60. Once all three phases are complete I think the market will move to 125.00.

May Crude: The market is now headed down to 56.80-57.20. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I still think gold is headed for 598. It is acting noticeably weaker than silver so I think the bull market here is on its last legs.  

May Silver: I think that silver is headed  for 1095.  

Google: I expect support at 334 to hold and after that Google should rally to 358 or higher. I am still convinced that continuation up to 405 and then to 495 is very likely.

 

T-bonds

Here is a 15 minute chart of the June T-bond futures. I last commented on this chart here.

I think the market has just finished the second, downward phase (from e to f) of an upward, three phase correction d-e-f-g. I am expecting a rally up to 111-08 followed by a break below 110.

 

S&P

Here is a 15 minute bar chart of regular hours trading in the June S&P e-mini futures.

In my last post I thought the market was on the verge of a breakout above 1321. As you can see the market instead took a dive back below support at 1309 and stopped a little above what I think is secondary support at 1303. The question now is whether or not today's early morning low at 1304.75 will hold.

Right now I think the evidence points to a move down to 1297 or so from the rally high so far of 1313.25. First note that the volume on today's rally has shown a definite tendency to decrease, in contrast to the volume pattern on yesterday's early rally. Second, the volume peaks on down bars during the correction from point aa have steadily grown higher, showing that selling pressure is growing. Third, the rally from dd has so far been smaller that the previous rally from bb to cc. It would equal the size of bb to cc at the 1315.50 level. Finally, the break from bb to cc was faster and deeper than the initial break aa to bb.

All in all, this is a short term bearish picture and leads me to expect a drop to 1297 before we see a rally into the 1325-28 zone and higher.

 

IBM

Here is a weekly chart of IBM.

My original upside target for IBM was 106-08 but I now think it will only make it up to 100 or so.

 

Chicago Board of Trade

Here is a daily chart of the Chicago Board of Trade.

CBOT is about to make a new high for trading since its IPO last year. I am revising my upside target slightly to 148 from the 142 level cited in my last post of CBOT.

 

Microsoft

Here is a weekly chart of Microsoft since its 2001 low at 20.12. This chart shows MFST adjusted for divident payouts so it shows an adjusted low near 18.00 instead of the actual print low of 20.12. In doing my analysis I prefer to use the print low rather than the divident adjusted low.

The thing that jumps out at me from this chart is that MSFT has been going sideways for 3 and 1/2 years now. During this time it has made a succession of higher lows on the weekly chart. I think this action forecasts a breakout above the 28 level. The first upside target would be roughly 33, at 1 and 5/8 times the 20.12 low.

 

Chicago Merchantile Exchange

Here is an updated daily chart of the Chicago Merchantile Exchange.

CME has been leading the bull market upward for the past three years and as yet shows no sign of weakness. It has alreading exceeded my initial bull market target of 411 and has reached the secondary target at 441. Right now I think support at 416 will hold and that the market will proceed upward to my next target of 500.

 

Sears Holdings

Here is a daily chart of Sears Holdings. I last commented on SHLD several months ago.

As you can see the market has reached and exceeded by a bit my 137 upside target. I think the current reaction will hold support at 128 and be followed by a move to 147.

 

Schadenfreude

I want to bring your atttention to this comment at the bottom of the previous post on the S&P.

"Schadenfreude" is a German word which roughly means "happiness over the misfortunes of other people".

This anonymous commenter has chosen to snipe at me from behind the cover of his internet bush, not having even the courage to tell us all his name.

When I read or hear a remark like this about my work I know instantly that that person is and will continue to be a life-long loser at the game of speculation. Indeed, the only joy he gets from the game comes from seeing other people take postions which are later trashed by the market's action. This Schadenfreude reaffirms his conviction that no one can win at the game of speculation, so it is o.k. if he himself is a loser.

Anyone who actively participates in the market regularly has the experience of the market moving contrary to his or her best estimate of its likely direction. The key to success is to recognize these "mistakes" early enough so that the damage can be limited.

 

Guesstimates on March 22 , 8:50 am ET

June S&P Futures: After my last S&P post the market pulled a U-turn and broke below 1309 support.  I think it has a good chance to hold 1303.  In any case I don’t think the swing up from the February 6 low at 1265 will end before we see 1350.  

June Bonds: The bonds are now headed downward. Resistance today is t 111-08. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes are headed downward from here. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: I think the market will bounce up to 121.60 and then drop to 120.20. After that I expect a move to 125.00.

May Crude: The market is now headed down to 56.80-57.20. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I still think gold is headed for 598. It is acting noticeably weaker than silver so I think the bull market here is on its last legs.  

May Silver: I now think that silver is headed  for 1095.  

Google: I expect support at 334 to hold and after that Google should rally to 358 or higher. I am still convinced that continuation up to 405 and then to 495 is very likely.

 

US Dollar - Euro

Here is an hourly chart of the cash US Dollar - Euro pair.

This morning I estimated that support would be found at 120.90. As you can see the market has dropped to that level and is now trading sideways near there.

I still think this market is headed for 125.00 and if I am right about this then the drop we have seen from the 122.05 level is a correction within a bigger uptrend. Now most corrections show a clear, three phase structure by the time they are complete. This move down from 122.05 does not yet show two distinct down phases yet, so I think we have only seen the first down phase within a larger correction. My best guess now is that the market will rally to 121.60 in the second phase of its correction and then drop to 120.20 in the third and final phase of the drop from 122.05.

 

S&P

Here is an updated 15 minute bar chart of regular hours trading in the June S&P e-mini futures.
During the past half hour the market has climbed steeply on very high volume. It had dropped as low as 1310.75 this morning, not far from my estimate of support at 1309. Since I am still very bullish on this market, I think the message of the high volume advance from 1310.75 is that the drop from 1321.50 is over and that the market will soon reach the 1325-28 zone.

 

T-bonds

Here is a 15 minute bar chart showing regular hours trading in the June T-bond futures.

The market has bounced off of 111-16 resistance after a three phase rally which I discussed here and here and here and here .

The intial drop from the 111-19 high is labeled a to b on the chart. Notice how the second downleg, the one starting from c, has already exceeded leg a - b in both extent (price) and duration (time). This is a bearish indication. The second bearish indication is the marked increase in volume which has accompanied the drop from c.

This tells me that the move down from c will break the early March low of 109-30 in electronic trading. The next significant support below that low is near 108-16.

 

Guesstimates on March 21 , 8:50 am ET

June S&P Futures: Support today is at 1309. The next upswing will carry the market into the 1325-28 range.  

June Bonds: The bonds have reached my 111-16 target and are now headed downward. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes are headed downward from here. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: The market is headed up to 125.00. Support is at 120.90

May Crude: The market is now headed down to 56.80-57.20. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I now think gold is headed for 598 or so after having completed a three phase drop to 534.

May Silver: I now think that silver is headed  for 1095.  

Google: Google should rally to 358 or higher. I am still convinced that continuation up to 405 and then to 495 is very likely.

 

May Crude Oil

 

Crude Oil

Here is an hourly chart of pit trading in May crude oil futures.

I had been looking for a move to 66.20 but the market only managed to reach the 65.50 level before turning lower. ( The price bar which has its high at 66.30 contains a "bad tick" and records a data transmission error.)

As you can see the market today broke below its March 16 session low and is accelerating downward. I think this means that it is now heading for the 56.80- 57.20 zone.

 

Advancing Issues and the Upcoming Top

As I said in my previous post on Lindsay's Domed House pattern, there is some uncertainty about the timing of point 23 which should be the top of the bull market which began from the October 2002 lows in the major averages.

My best estimate currently is that this high will occur near April 25 plus or minus a few days. There is one thing which would change my mind about this and make me expect the top in June instead of in late April.

I have noted previously on this blog the following interesting fact. When the stock market averages make a new bull market high that is accompanied by multi-month high in the 10 day moving average of the number of advancing issues on the New York Stock Exchange then the final price top is at least one month and often two months away.

Above this post you will find a chart of the daily readings of the NYSE advancing issues number (black line) and well as the 10 day (red line) and 20 day (blue line) moving averages of this number. Notice that the 10 day moving average is still below its peak for 2006 which is depicted by the dashed red line. Should this peak be exceeded over the next few weeks I would then believe that the bull market top lies at least one month and maybe two months ahead.

Of even more potential interest is the 20 day moving average (blue line). If this moving average makes a new high for 2006 (by moving above the dotted blue line) then I would conclude that the bull market top lies at least 2 and possibly 4 months ahead.

If sometime during the next few weeks either or both of these moving averages make new highs for 2006 I would conclude that point 23 would develop in June and not in April. I might add that the ideal 7 month and 10 day time projection for the Domed house from point 14 would predict point 23 for June 5.

 

Domed House Update

Here is a daily chart of the cash S&P 500 showing its current position within George Lindsay's Domed House pattern. I've been tracking this and other similar examples of Lindsay's
Three Peaks and a Domed House formation over the past couple of years.

The market is pretty much on schedule and I think it is heading higher into the peak of the domed house at point 23. I've projected this top for April 25 at the 1350 level. At the moment this looks like a good estimate.

The only real risk I see is that the market turns out to be stronger than I am expecting and instead puts in its point 23 high in June instead of late April. If this were to happen I would think the top would be near 1400 rather than 1350.

In this post about the Domed House in the S&P I explained that the ideal time projection for point 23 from point 14 of 7 months and 10 days would put the top on June 5. I also explained why at the time I still preferred April 25 as the likely date for point 23.

 

S&P

Here is a 15 minute interval line chart for the June S&P e-mini futures.

The break from this mornings high has occurred on increasing and relatively high volume. From this I conclude that the market is headed at least for 1309 and possibly to 1303. Once this drop is complete I think a rally to 1325-28 and higher will be the next development.

 

Guesstimates on March 20 , 8:50 am ET

June S&P Futures: The market is on its way into the 1325-28 zone. Support today is  at 1309.

June Bonds: The bonds have reached my 111-16 target and are now headed downward. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes are headed downward from here. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: The market is headed up to 125.00.

May Crude: The upside target for this rally is now 66.20. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I now think gold is headed for 598 or so after having completed a three phase drop to 534.

May Silver: I now think that silver is headed  for 1095.  

Google: Google should now rally to 358 or higher. I am still convinced that the next significant development will be a rally to 405 and then to 495.

 

Guesstimates on March 17 , 8:50 am ET

June S&P Futures: The market is on its way into the 1325-28 zone. Support today is  at 1309.

June Bonds: The bonds have reached my 111-16 target and are headed downward from there. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes have exceeded resistance at 107-12 by 13 ticks but I think they are headed downward from here. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: The market has accelerated past 121.10 so I think it is headed up to 125.00.

May Crude: The upside target for this rally is now 66.20. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I now think gold is headed for 598 or so after having completed a three phase drop to 534.

May Silver: I now think that silver is headed  for 1095.  

Google: Google should hold 338 and then rally to 358 or higher. I am still convinced that the next significant development will be a rally to 405 and then to 495.

 

Google

Here is a 15 minute chart of Google. I last commented on this chart here.

I think that GOOG has completed a three phase drop to support at 338. The whole move ended with a volume climax at point d, the biggest volume by far on a down bar since the top at point a.

The next development should be a rally to 358 or higher.

 

T-bonds

Here is a 15 minute chart of June T-bond futures. I last discussed this market here.

The bonds have finally reached my 111-16 target. In doing so a clear three phase rally is visble ( a-b-c-d). Moreover the volume on this last upleg shows a marked tendency to drop as the market climbed to new rally highs.

I think this means that the corrective phase is over and that a move below 110-00 is imminent.

 

S&P

Here is an updated line chart of the 15 minute bar closes in the June S&P e-mini futures. I last commented on this chart here.

I was looking for a reaction from yesterday's high around 1315 to about 1304 based on the volume reduction we saw yesterday afternoon and upon the fact that the swing up from ff was at the time shorter than the one from dd to ee.

This morning the market opened strong and put in a volume bar bigger than any seen yesterday afternoon, thus indicating renewed strength. The June S&P's eventually made it to a high of 1321.50 at gg but on volume again much lower than seen earlier today. I am again willing to guess that the market will have a reaction comparable in length to the one from b to c on the chart. This would make support the 1309 level.

In any case I expect the market to reach the 1325-28 range in a day or two and to hesitate and /or react once it does. I doubt that we will see more than 25 points on the downside before the futures hit 1350.

 

US Dollar / Euro

Here is a 15 minute bar chart of the cash US Dollar/Euro pair.

As you can see the market has accelerated past the 121.10 level and on this evidence I conclude that it is heading higher to the 125.00 level I last discussed here.

 

Guesstimates on March 16 , 8:50 am ET

June S&P Futures: The market is on its way to 1325. Support today is  at 1304.

June Bonds: There is still a good chance that the bonds will reach the 111-16 level after a reaction that started from yesterday’s high is complete.  I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes have nearly reached resistance at 107-12 and I think the next big swing from here will be downward. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: The market has reached the initial target of 121.10 on the news this morning. Strength past there will imply continuation up to 125.00.

May Crude: The upside target for this rally is now 66.20. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I now think gold is headed for 598 or so after having completed a three phase drop to 534.

May Silver: I now think that silver is headed  for 1095.  

Google: Google should hold 338 and then rally to 358 or higher. I am still convinced that the next significant development will be a rally to 405 and then to 495.

 

S&P Update

Here is an updated line chart of the June S&P e-mini futures. I discussed this chart earlier this morning.

The reaction that I expected to hit at least 1304 only made it to 1306, a real sign of strength. A short while ago the futures broke out to a new contract high and as I write this are trading around 1315.

At the risk of getting too cute I want to observe that the volume on the breakout a short while ago was high but not as high as it was on several upsurges yesterday. Moreover, the peak today was made on visibly less volume that the breakout volume itself.

Since today's number of advancing issues hasn't yet reached the level of yesterday's I am willing to guess that we will see a three stage reaction of about 12 points or so down to 1304 before the market moves substantially higher.

 

Google

Here is an updated 15 minute bar chart of Google. I last discussed this chart here.

The rally from the low at point d so far has a three phase look which would in ordinary circumstances be a warning that a drop below d is imminent. However, these are not ordinary circumstances. I think GOOG has absorbed a great deal of negative news over the past few weeks and is only trading a little below the low it reached after the very negative Barrons' story came out. If only for this reason I think this stock in in a bullish postition.

So I am going to guess that the drop from point g will end above point f. There is some technical encouragement for this view. The market made three lows, b, d, and f around the same level prior to its rally to g. The upswing from f to g was longer in time and price than the one from d to e. The reaction from point g has seen a very obvious drop in volume which is consistent with it being a drop within an ongoing up trend.

I think the small rally visible in the char over the past 90 minutes is the middle, upward phase of a three phase drop that will end near 338. From there I would expect a move up that would at least equal the move from f to g. This would make 358 the minimum upside target.

I still think we will see GOOG trade well above 400 within a couple of months.

 

S&P

Here is an updated version of the 15 minute interval line chart I discussed yesterday for the June S&P e-mini futures.

The market has been behaving very bullishly. Notice how the upswing from point c has been much longer in price and time that the swing up from a to b. Within the upswing from c note that the last subswing from dd to ee was also the longest of the subswings within the move up from c.

Finally note how the volume has decreased as the market has approached its February 27 top near 1310. This actually is a bullish indication in this context because it tells us that the market is not running into agressive sellers near the old top. This means that it will probably break well above the 1310 level within a couple of days.

This combination of evidence makes me think that any three phase reaction that begins from today's high at 1309.75 will find support either at 1306 or at 1298, thus matching either the 6 or the 12 point reactions we have seen on the way up from point a.

I expect the market to reach 1325 in a week or two and 1350 by the end of April.

 

Guesstimates on March 15 , 8:50 am ET

June S&P Futures: The market is on its way to 1325. Support today is  at 1298.

June Bonds: There is still a good chance that the bonds will reach the 111-16 level after a reaction that started from yesterday’s high is complete.  I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes: The notes have nearly reached resistance at 107-12 and I think the next big swing from here will be downward. I think notes will reach 104 or so in a few months.

Cash US Dollar -Euro: I changed my mind yesterday about the market’s short term direction. It should reach the 121.10 level within a few days. Strength past there would imply continuation up to 125.00.

May Crude: Switching to the May contract today. Yesterday’s action made me raise the upside target for this rally to 66.50. I still think that over the next few months the market will drop to 52.00 or lower.

April Gold: I now think gold is headed for 598 or so after having completed a three phase drop to 534.

May Silver: I now think that silver is headed  for 1095.  

Google: Google will probably stall near short term resistance at 355 but any reaction from there should stop above the 331 low. I am still convinced that the next significant development will be a rally to 405 and then to 495.

 

April gold hourly chart

 

Gold

Here is an hourly chart of pit trading in April gold.

I had been expecting a big drop in gold but the action of the past couple of days has changed my mind.

Notice that the move down from point a at 579 looks like a classic three phase correction. The low near 534 occurred right on strong support at the 2 and 1/8 multiple of the 1999 low at 252. The rally from point d has moved the market past my estimated resistance at 550 and past the last top on the swing down from c to d.

All in all this now looks like a market which is about to make new bull market highs. I am expecting a move up to resistance around 598 which is the 2 and 3/8 multiple of the 252 low.

 

US Dollar - Euro currency pair

 

Cash USD-euro

Here is an hourly chart of cash trading in the USD-euro currency pair.

I had thought that the move up from point b would prove to be a three phase correction and end near 120.00. Today's action makes that less likely so now I think that the move up from b is in fact the third phase of a move up from the 118.25 on February 27. If so the swing from b should carry to 121.10.

There is an even more bullish possiblity. The low at 118.35 was almost 200 points above the low of November 15, 2005. This means that the entire rally from that low at 116.39 may still be incomplete. If so the move up from 118.25 on February 27 would be the third upward phase of the move up from 116.30 and as such could reasonably be expected to carry to 125.00 or so.

Which of these two bullish possibilities the market will choose will be determined by its action near the 121 level.

 

May silver hourly chart

 

Silver

Here is an hourly chart showing pit trading in May silver futures.

In silver I have been the yo-yo at the end of the market's string. I had been looking for a three phase rally from 967 to end near 1012 but the market has today reached the 1026 level. This makes the move up from point c bigger than the move from a to b. This coupled with the strong move above the 1012 level makes it likely that a more substantial upmove started from point a and that this swing will continue up to 1092 or so.

 

April crude oil hourly chart

 

Crude Oil

Here is an hourly chart showing pit trading in April crude oil futures.

I had expected the market to make a lower top near 62.20. But today we see acceleration above that level. The whole swing up from point c no longer has a three phase appearance. This is telling me that the move up from point c is really the third phase of the correction which began from the low at point a. So now I am looking for a top in April crude near 64.50 to be followed by a move to 57.20 or so.

Tomorrow I will be switching over to May crude which is currently trading 2.00 over the April contract.

 

Google 15 minute bar chart

 

Google

Here is an updated version of the 15 minute bar chart for Google that I last discussed here.

The market drifted a bit below what I estimated to be support at 335 on decreasing volume and just now has rallied sharply out of that sideways congestion in the 332-337 range. I think this means that GOOG is now headed for the first upside target at 355.

 

Line Chart of June S&P e-minis

 

S&P

Here is a line chart showing the closes on a 15 minute bar chart of the June S&P e-mini futures. I like to use line charts to analyze the relative length and duration of successive market swings. This gives me some insight into the market's technical strength or weakness.

Two big things jump out at me from this chart. First, the swing up from point c is already longer than the one from point a to point b in both price and time. Second, the successive volume peaks associated with successive upswings within the upmove from a have been getting higher. Both of these facts depict a market that is gaining technical strength and this implies substantially higher prices lie ahead.

Looking at the upswing that started from point c, we see that at the moment this swing may be faltering. The reason is that the small swing up from from point dd is shorter than the one up from point bb which in turn was shorter than the one up from point c to point aa. However, since volume on this morning's upswing was bigger than on any upswing within the whole move up from point a I think it is reasonable to expect the market to move to 1304.50 or higher before any reaction sets in. This would make the move up from dd longer than any up swing within the move up from point c and would be an even more bullish indication.

In any case, this market is acting very bullishly and should soon make new contract highs above the 1310 level. I don't think any break as bigger than 20 points will develop before the market reaches 1325.

 

Guesstimates on March 14 , 8:50 am ET

June S&P Futures: The market is on its way to 1325. Support today is  at 1287.

June Bonds: The bonds are in the second upward phase of their rally and should reach 111-16 soon.  I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes:  Support is still at 106-12 and I think the notes will rally to 107-12 or so over the next few days. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is 116.70 and resistance stands at 120.00. A drop to 113 and below is underway.    

April Crude: Downside target is the 56.80 to 57.20 zone. Resistance today is 62.20. Crude is headed for 52.00 and eventually lower than that.

April Gold: Resistance is at 550 and the market should reach 512 in a week or two.

May Silver: Silver is headed  for 850.  Meantime resistance today is near 1012.

Google: Support today is 335. I am still convinced that the next significant development will be a rally to 405 and then to 495.

 

S&P

Here is a 15 minute chart of the June S&P e-mini futures.

I looks to me like a three phase correction has started from todays high at 1298.75. I expect the market to drop to 1290 or so, equaling the length of Friday's break, and then to move above the 1300 level.

 

April Crude Oil

 

Crude Oil

Here is an hourly chart of pit trading in April crude oil futures.

I am very bearish on crude oil and expect to see prices at 52.00 in a few months.

Meantime I think that the top at point e at 63.80 will hold. The rally from point f shows three distinct phases and I think the market will stop near 62.20 and turn downward.

 

Google

Here is a 15 minute bar chart of Google.

Notice that the swing down from c to d at 331 Friday was much shorter than the precceding swing down from a to b. Note also that the volume near the low at d was much less than at the preceeding low at b.

This means that the selling pressure on the market was weaker at d than at b and is a bullish clue. The subsequent rally to point e was the biggest of the drop from 387 and broke above the high at c.

This combination of evidence tells me that the drop from this morning's high at 346 will make a higher low, probably near 335 and that the next swing upward will carry GOOG to 355.

 

Silver

Here is an hourly chart showing pit trading in May silver futures.

The market is getting close to my 1012 target and has traced out a classic three phase rally from the 966 low on March 8.

I think the next big swing from here will be downward to 920.

 

Guesstimates on March 13 , 8:50 am ET

June S&P Futures: The market is on its way to 1325. Support today is  at 1286.

June Bonds: The bonds are in the second upward phase of their rally and should reach 111-16 soon.  I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes:  Support is still at 106-12 and I think the notes will rally to 107-12 or so over the next few days. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is 116.70 and resistance stands at 120.00. A drop to 113 and below is underway.    

April Crude: Downside target is the 56.80 to 57.20 zone. Crude is headed for 52.00 and eventually lower than that.

April Gold: Resistance is at 550 and the market should reach 512 in a week or two.

May Silver: Silver is headed  for 850.  Meantime I think there will be a second upward phase to the rally from 967 which will carry to 1012 or so.

Google: Support today is 331. I am still convinced that the next significant development will be a rally to 405 and then to 495.

 

T-bonds

Here is an hourly chart showing pit and electronic trading in the June T-bond futures. I last discussed this market here and here.

The chart illustrates nicely the tendency of markets to move in three phase rallies and declines while in a corrective situation. Right now I think the three phase correction, the blue a-b-c-d pattern, is over and that the market is headed up to 111-16. Looking within the blue a-b-c-d pattern notice how the move from a to b was a three phase break and how the move from b to c was a three phase rally.

The drop from 111-00 (blue point a to blue point d) was itself the middle, downward phase of what I have been projecting to be a three phase rally from 109-31. I think the move up from today's low to 111-16 is the third and final phase of that rally.

 

S&P

Here is a 15 minute bar chart of regular hours trading in the June S&P e-mini futures.

The market held support at 1282 as I had expected. This morning's first hour was a downside volume climax but note how the volume stayed very high on the subsequent rally. This is a very convincing sign that much higher prices lie ahead.

Right now I estimate minor support at 1287.50. The market has rallied to yesterday's high so a small, three phase reaction down to this support would be normal. I think the S&P futures are headed for 1325 on this swing.

 

Google

Here are three charts of Google: daily bars, hourly bars, and a 1 minute line chart.

I had been expecting the drop from the March 3 high at 387 (point c on the hourly chart) to stop above the February 15 low at 337.83. As you can see this morning GOOG has dropped as low as 333.50, breaking below that low.

The first order of business is to determine whether or not this breakout will lead to lower prices. If it does then I think the market would have to drop to 300 or so which is the blue line on the daily chart and is 3 and 1/8 the all time low traded price of 95.96.

However, I think there is good evidence that this downside breakout is a fake and will be followed by a strong move upward.

First of all, on the hourly chart you can see that the breakout occurred on unusually high volume. This to me looks more like a volume climax than a genuine breakout because a breakout move is usually accompanied by increasing but not huge volume. The second piece of evidence can be see on the 1 minute line chart. Notice that the swing into the low at point h was the shortest of all but one of the downswings from yesterday's early morning high near 358. Moreover, it point h was only a little below point f. Finally, the rally from h has been the biggest and longest of the downswing from point a.

Finally, the entire move down from the 397 high on February 28 is a classic three phase correction which I have marked on the hourly chart as a-b-c-d.

My best guess now is that GOOG will rally from this morning's low up to 356 or so. I am looking for a higher low after this initial rally to 356 and if it develops I shall expect a continuation up to 405 and eventually higher than that.

 

Guesstimates on March 10 , 8:50 am ET

June S&P Futures: Switched to the June contract yesterday.  I think the overnight low of 1280.75 will hold and that the next swing will reach the 1325 level.

June Bonds: The bonds are in the second upward phase of their rally and should reach 111-16 soon.  I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes:  Support is still at 106-12 and I think the notes will rally to 107-12 or so over the next few days. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is 116.70and resistance stands at 120.00. A drop to 113 and below is underway.    

April Crude: Downside target is the 56.80 to 57.20 zone. Crude is headed for 52.00 and eventually lower than that.

April Gold: Resistance is at 550 and the market should reach 512 in a week or two.

May Silver: Silver is headed  for 850.  Meantime I think there will be a second upward phase to the rally from 967 which will carry to 1012 or so.

Google: Support today is 341 and the next significant development will be a rally to 405 and then to 495.

 

Google

Here is a 15 minute bar chart of Google.

The drop from 387 has gone further than I expected it to but I still think is will end above 338. My best guess now is 342.

Most corrections assume a 3 phase, zig-zag shape but this one is hard to see that way. This may be telling us that the next rally won't make it to 387 but for the time being I'll be looking for a move to 405 as the next development, not a rally to a lower top.

In any event notice how the volume on the drop from 387, while low relative to the rally to 387, showed a definite pattern of increasing volume on successive down bars. This pattern has changed over the past two days and now the market is showing a definite tendency for volume to contract as price has dropped below 360.

This morning for the first time we saw a significant volume increase on an up bar and a rally that was bigger than the rallies which preceeded it. Even though the market subsequently moved lower I think that this morning's rally plus the low volume on the subsequent break are facts pointing to an imminent end near 342 of the drop from 387.

 

Silver

Here is an hourly chart showing pit trading in May silver futures.

I had expected the rally from 967 to halt near 988 but the market has put 20 cents on top of that. Moreover, if this rally is corrective as I think it is, the move up from 967 should develop in three phases. It looks to me that the drop from this mornings high at 1010 is probably the second phase and that a third upward phase should take the market back up to 1012. After that I will be expecting a move down to 920.

 

S&P

Here is a 15 minute bar chart showing regular hours trading in the June S&P e-minis. The June contract became the front month today which is why you see no volume bars prior to today's.

I think that yesterday's low at 1279.25 was the low of the break which started from 1309.25 on March 3 in the June contract. I explained some of my reasons yesterday.

From today's early high at 1294 the S&P's dropped on increasing volume to 1284.75 and then rallied on lower volume. If the drop from 1294 is a reaction within an uptrend as I think it is, it should be a three phase affair with two down phases separated by an intervening rally. The fact that volume increased on the way down to 1284.75 makes believe that the drop from a to b was the first phase of the correction. I am guessing that the second phase, a rally from b to c will be about 6 points and will end near the 1291 level. The third phase should then carry the market down to a point d near 1282.

Once this correction is complete I am expecting a move up to 1325.

 

T-bonds

Here is a 15 minute bar chart showing regular hours trading in the June T-bond futures.

I think the drop that started from the 111-00 high in electronic trading will carry the market down to 110-07 or so and then be followed by a move to 111-16. Here's why.

In my view the drop from 111-00 is corrective and most corrective trends assume a clear three phase form; in this case two downward phases of about equal length separated by a rally phase. The first downward phase ended at 110-14 at point b, a drop of 18 ticks. Subtracting 18 ticks from point c at 110-25 gives us 110-07 as downside target.

Note how the volume is showing an obvious tendency to drop as the correction from 111-00 proceeds. This is confirming evidence that there indeed will be another upward phase which will carry the market above 111-00. However, within the drop from 111-00 the high volume bars are all down bars. This is telling us that the drop from 111-00 is not over.

 

Guesstimates on March 9 , 8:50 am ET

June S&P Futures: Switching to the June contract today.  I think the market made it low yesterday at 1279.25 and will now rally to 1325.

June Bonds: The bonds are on the way down to the 110-00 to 08 zone. The second upward phase of the rally to 111-16 still lies ahead. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes:  Support is still at 106-12 and I think the notes will rally to 107-12 or so over the next few days. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is 116.70. A drop to 113 and below is underway.    

April Crude: Downside target is the 56.80 to 57.20 zone. Crude is headed for 52.00 and eventually lower than that.

April Gold: I think a lower top was made at 572 and that the market is now headed for 512.

May Silver: Silver is headed  for 850.  Resistance today is  at  998.

Google: Support today is 351 and the next significant development will be a rally to 405 and then to 495.

 

S&P Update

Here is a 15 minute bar chart showing regular hours trading in the March S&P e-mini futures.

This morning I pointed out that the market was continuing to show higher volume on rallies. After that post the S&P proceeded to break below the low of its trading range and showed a very definite volume climax as it did so. The fact that the market immediately recovered above the 1272 level shows that the volume came largely from weak buyers getting stopped out and breakout following sellers. The buying on such a downside breakout generally comes from people who can't be scared out of a long postion by a little adverse price action and this sort of buying strengthens the market's technical position.

On the subsequent rally you can see a very pronounced trend towards high volume on up bars. Morover, the market has broken above the highs of the last two day's trading range and in doing so has put in the biggest and longest rally since the start of the drop from 1299.

All of these indications are bullish and are pointing to much higher prices ahead.

 

US Dollar Index

Here is a weekly chart of the US Dollar index.

I have been very bullish on the dollar since early 2005. One of the things that made it easier to identify this bull market in the dollar in its early stages was this investment advice offered by the New York Times.

At this juncture I am looking for a move in the dollar index to the 96.00 level and eventually to 100 or so.

 

Crude Oil

Here is an hourly chart showing pit trading in April crude oil futures.

I think this market is headed for the next downside target in the 56.80- 57.20 zone.

Notice how the drop from point e has gone farther and lasted longer that the drops from a to b and from c to d. Moreover, looking within the swing downward from e we see that the successive breaks are expanding in extent and duration. Finally, the down bars in this swing show consistently big ranges compared with the up bars. This indicates that volume is heavier on the downside and sellers are confident and agressive. All these considerations point to the same conclusion: much lower prices lie ahead.

 

Google

Here is an udpated 15 minute bar chart of Google which I last discussed here.

Late yesterday there was another piece of upsetting news for Google involving a mistaken posting on its web site that may have misled investors.

When I am bullish on a stock or a market and bad news comes out I look for signs of a selling climax, especially one that occurs at support and at a higher low. I think that this is what we are seeing in GOOG.

I estimate support today at 351. We clearly had a big volume spike on bad news at the open. that dropped the market to 353 and change. This is the biggest volume bar on the decline from 387 which has shown greatly reduced volume compared with the previous advance.

The rally from g to h was about as big as the rally from e to f but the drop from f to g took a lot less time than the one from d to e. If we see a slightly lower low at a possible point i near 351 and then rally above point h I will think that the low of the reaction from 387 is in place. Alternatively, any high volume break above point h would send the same message.

 

Silver

Here is an hourly bar chart showing pit trading in May silver futures.

The market has broken below what should have been support at 986 on a very wide range bar, which I use as a proxy for a high volume bar in markets that don't offer real time trading volume numbers. From this I conclude that the move above the 1000 level was a head fake and that the market has begun an extended drop which will probably carry it at least to 850.

Resistance above the market is at 988 and the next down swing should carry to the 920 level.

 

S&P

Here is a 15 minute bar chart showing regular hours trading in the March S&P e-mini futures. Tomorrow activity will switch into the June futures which are trading about 10 points higher than March.

Yesterday afternoon I pointed out that volume has started to show a definite pattern of increasing on up bars and as you can see this tendency has continued this morning. I think this is a bullish portent and that the market will soon move above 1280 and continue on to 1320.

 

Guesstimates on March 8 , 8:50 am ET

March S&P Futures:  I think the market will again close today above the 1275 support level and then start a move to 1320.

June Bonds: The bonds nearly reached 111-00 in electronic trading and now are on the way down to the 110-00 to 08 zone. The second upward phase of the rally to 111-16 still lies ahead. I think the market is on its way into the 107-108 zone over the next few months.

June 10 Year Notes:  Support is still at 106-12 and I think the notes will rally to 107-12 or so over the next few days. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is 116.70. A drop to 113 and below is underway.    

April Crude: Downside target is the 56.80 to 57.20 zone. Crude is headed for 52.00 and eventually lower than that.

April Gold: I think a lower top was made at 572 and that the market is now headed for 512.

May Silver: As long as support near 986 holds there is a good chance the market will reach 1096 before beginning a big break.

Google: GOOG keeps getting hit by nasty surprises. Support today is 351 and the next significant development will be a rally to 405 and then to 495.

 

S&P at 3 PM ET

Here is a 5 minute bar chart giving us a detailed look at the trading in the March S&P 500 e-mini futures today.

I am expecting the market to hold here and begin a big rally. This morning we saw what I think was a selling climax althought the market did not hold its climax low as well as I would have liked.

Nonetheless, we can see that trading during the past hour has given us some supporting bullish evidence. You can see that for the first time today higher volume is starting to appear on up bars. This tells us that the bulls are starting to be aggressive buyers at current levels because there are not enough offers hitting their bids at lower levels.

I think this is the first concrete evidence that an upward turn is imminent.

 

NYSE Advancing Issues

The first chart you see above the post depicts the daily count of the number of issues on the New York Stock Exchange that advance in price.

I want to point out that so far today's reading is the lowest since the October 12, 2005 reading. That was the day that preceeded the low at 1168 in the cash S&P. Generally speaking, when the market is making higher lows and then shows an extremely low daily reading in the advancing issues number it is telling us that a low is forming and that a strong rally lies dead ahead. I think that this is the message it is sending us today.

 

Google

Here is a 15 minute bar chart of Google. I last discussed this chart here.

I think the 337 low is going to hold and that GOOG is going to reach the 495 level in a couple of months. Meantime you can see that the market has been drifting downward from the 387 top it made just after the break to 338.

This drop from 387 has shown consistently low volume, especially when compared with the rally from 338 to 387. This is a bullish indication. But note that so far the heaviest volume on the break has been on the down bars. Thus the volume indications have not yet told us that another upswing has started.

There is some bullish evidence to be seen on the chart. Note how the downswing from point d to point e was shorter in time and extent that was the preceeding downswing. This is the first piece of evidence that the drop from 387 may be ending. I'd like to see a rally bigger than the rally from a to b together with some obvious sign of increasing volume before I conclude that the drop from 387 is complete.

 

S&P

Here is an hourly chart of regular hours trading in the March S&P e-mini futures.

I have highlighted three volume climax situations on the chart, today's opening hour being the last of the three. The key thing to look for is unusually high volume developing at a support level with little or no downside price follow through.

Since I estimate support at 1275 I believe that today's opening hour volume and the two subsequent sideways hours is telling us that the market is about to rally significantly. I think we will see 1320 by the end of the month.

 

T-bonds

Here is a 15 minute bar chart of trading in June T-bond futures during regular trading hours.

Yesterday I said that a minimum target for the break from the February 28 top at 113-05 was 109-26. This morning in electronic trading the market hit 109-31 and has since rallied.

Notice that the rally so far has been bigger than any rally since the February 28 top. More importantly, volume has shown a pronounced tendency to be high on up bars, a reversal of its pattern during the previous break. These two fact make me believe that a typical three stage rally has begun from the 109-31 low. The rally will have two upward phases separated by a reaction that will probably carry the market down close to 109-31 again. The last upward phase will probably end near 111-16. After that I expect the market to resume its downtrend toward 108 and lower.

 

Guesstimates on March 7 , 8:50 am ET

March S&P Futures:  I now think the market will close today above the 1275 support level and then start a move to 1320.

June Bonds: The bonds nearly reached 109-26 early this morning, breaking below minor support at 110-12.  Resistance above the market today is at 110-20. I think the market is on its way into the 107-108 zone.

June 10 Year Notes:  The notes dropped below 106-16 this morning, reaching the 106-12 level. Resistance today will be at 106-30. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is 116.70. A drop to 113 and below is underway.    

April Crude: Resistance is near 63.50 and the next swing should drop the market to 57.20. Crude is headed for 52.00 and eventually lower than that.

April Gold: I think a lower top was made at 572 and that the market is now headed for 512.

May Silver: As long as support near 986 holds there is a good chance the market will reach 1096 before beginning a big break.

Google: GOOG should hold 363 today and then rally to 405 and then to 495 in a couple of months.

 

S&P

Here is an hourly chart showing regular hours trading in the March S&P e-mini futures.

Friday I thought that the market was about to break out above the 1300 level but this breakout failed to materialize.

After trading near Friday's close for almost four hours the market has finally broken to the downside on increasing volume. This is the third time it has reached the 1280 level and this time I think it will go through and reach support near 1275. From the latter level I think the S&P's will start a move above the 1300 level.

 

Crude Oil

Here is an hourly chart showing pit trading in April crude oil futures.

The market has again bounced off of resistance at 63.50. This time I think it will drop into the 56.70 -57.20 zone before another significant rally can develop.

 

Gold

Here is an hourly chart of pit trading in April gold futures.

The apparent breakout above 1000 in silver made me think that gold might have more on the upside too, but today's high volume break instead makes the 571 high stand out as the first important lower top since the February 2 top at 579.50. After a lower top the market generally will make a lower low so I think it is now headed down to 512 and evenutually lower than that.

 

Silver

Here is an hourly chart showing pit trading in May silver futures.

The high volume breakout to new contract highs near point f convinced me that the market would have to rally to 1095 or so before any big break occurred. Today you can see that the market has broken below my estimate of short term support at 1000 on very high volume (not shown).

The swing up from point e to point f was the longest of the upswings in the move up from point a. But now the break from point f is bigger and has lasted longer that any of the breaks prior to point a. This is evidence that the move up from point a is over and that a move down close to point a or even lower has begun. However, I am as yet not completely convinced of this and will wait for the market to test support at 986. If this latter level is broken then I will conclude that a move to 915 and probably lower has started.

 

T-bonds

Here is a daily chart of the June T-bond futures.

The market rallied from a low in early November (at 110-12 basis December '05 futures) to a high in January at 115-13 in the March futures. I think we are in the middle of the second downswing from the 115-13 high. The first carried the March futures down 115 ticks from point a to point b. The market then rallied to point c at 113-13 in the March contract. Another drop of 115 ticks from point c in the June contract would carry the market to 109-26 or so. In fact I think the second swing down which started from point c will be longer than the first, so 109-26 is a minumum target.

As you know I expect this market to drop to 108 or lower over the next few months so only a modest rally will result once the swing down from point c is completed.

 

US Dollar/ Euro

Here is an hourly chart of the cash US Dollar/Euro pair. The market has bounce off of resistance at 120.80 and I now think it is headed for the 116.80-117.20 zone.

 

Guesstimates on March 6 , 8:50 am ET

March S&P Futures:  The late break Friday surprised me but I think the 1280 level is going to hold.  Next upside target is 1304 and after that 1320.

June Bonds: Next downside target is 110-12. I think the market is on its way into the 107-108 zone.

June 10 Year Notes:  Next downside target is 106-16. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The market should hold below 120.80. The next downside target is116.70. A drop to 113 and below is underway.    

April Crude: Resistance is near 63.50 and the next swing should drop the market to 57.20. Crude is headed for 52.00 and eventually lower than that.

April Gold: Still holding resistance at 570 but silver’s upside breakout makes me think gold can move up to 590 before a big drop begins.

May Silver: Yesterday’s upside breakout on high volume means that the market is headed for 1095.  Meantime support should be at 1000.

Google: GOOG will probably react to 370 or so but then rally to 405 and then to 495 in a couple of months.

 

Google

Here is a 15 minute bar chart of Google.

GOOG has rallied nicely from the 338 low which occurred after Google's CFO had his little conference call with the analysts. I am especially impressed by the series of volume spikes that occurred on wide range up bars. This indicates to me that buyers were willing to be agressive in the face of apparently bad news. People who buy under such conditions are not likely to sell anytime soon so this strengthens the market's technical position.

Today we saw the first modest volume spike on a wide range down bar. This is late confirmation that the market is reacting from today's high at 387. I am still very bullish on GOOG and on the market in general so I think this reaction will probably stop near 370. From there GOOG should move above 400.

 

Chicago Merchantile Exchange

Here is a daily chart of the Chicago Merchantile Exchange.

As you can see CME has been one of the strongest stocks in the market over the past 3 years and this superior performance has continued over the past 3 months.

My original target for CME was 411 which I then raised to 441. Since the latter target has been achieved and since the bull market in the averages and in CME looks like it has a fair amount left on the upside, I am raising my target for CME to 500.

 

S&P Update

Here is an updated 15 minute bar chart of the March S&P e-mini futures.

This morning I said that the market would probably rally to 1293. As you can see on the chart it has done that and more. In fact, move above the 1293 level now looks like a genuine upside breakout to me. Here's why.

The breakout volume was high as you can see on the chart. In fact it was even higher than it looks because it occurred during the lunch hour in New York, usually a slow time for all markets. After the breakout the market drifted back to 1293 but on low volume. Had the breakout been a fake one we would instead have seen the S&P dive back below 1293 and stay there. After the low volume test of the breakout level the market put in a wide range bar to new rally highs. Moreover, by this time the S&P's were more than 4 points into plus territory for the day.

The combination of these factors has convinced me now that the 1280 level was the reaction low and that we will soon be above 1300 and headed for 1320.

 

Board of Trade

Here is a daily chart of the Chicago Board of Trade.

I last discussed BOT here. As you can see on the chart the stock has significantly outperformed the market averages since mid-January. The volume pattern (not shown on the chart) shows several relatively high volume days associated with wide range up days during the advance. Both relative strength and volume make me confident that BOT will hit 142 (at least) before any extended drop begins.

 

S&P

Here is a 15 minute chart of regular hours trading in the March S&P e-mini futures.

As you can see the market has been locked in a 1280-1292 trading range the past few days. This morning, in electronic trading, the e-minis dropped to 1280 before bouncing upward and this rally continued when regular trading hours began.

I have highlighted the fact that volume on the move up this morning was high relative to the volume on yesterday's afternoon rally. Morever, on the break from this morning's high trading volume showed a definite tendency to contract. This makes me think that the upmove from the 1280 electronic low this morning is not yet complete. I think we will see the market rally to 1293 or so today and then drop to 1275 early next week.

 

Guesstimates on March 3 , 8:50 am ET

March S&P Futures: I think the market will now drop to 1275 or so before beginning an upswing to 1320.

June Bonds: The market bounced off of support at 111-16 but won’t go much higher than112-08. Next downside target is 110-12. I think the market is on its way into the 107-108 zone.

June 10 Year Notes: The notes dropped a bit below support at 107-10 and any rally from current levels should halt near 107-24. Next downside target is 106-16. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The market breached resistance at 119.80 yesterday but should hold below 120.80. The next downside target is116.70. A drop to 113 and below is underway.

April Crude: Resistance is near 63.50 and the next swing should drop the market to 57.20. Crude is headed for 52.00 and eventually lower than that.

April Gold: Still holding resistance at 570 but silver’s upside breakout makes me think gold can move up to 590 before a big drop begins.

May Silver: Yesterday’s upside breakout on high volume means that the market is headed for 1095. Meantime support should be at 1000.

Google: I think the 337 low will hold and that the next move will carry GOOG to 405 and then to 495.

 

S&P Update

Here is a 15 minute chart of regular hours trading in the March S&P e-mini futures.

The market bounced off of resistance in the 1290-91 range this morning, dropped all the way back to the early morning low and now has rallied back to the 1290 level.

Volume on this last rally has dropped as prices have risen and thus the volume pattern has stayed in step with its previous bearish message. I conclude that resistance at 1292 will hold and that the market will take another step down to my revised downside target at 1275.

After that I am still looking for a move to 1320.

 

Crude Oil

Here is an hourly chart of pit trading in April crude oil futures.

Contrary to my expectation the market has bounced a second time off of the support level at 60.20. I still expect the 63.50 level to act as a lid to the rally and the next significant move should be downward to 57.20.

 

Silver Update

Here is a line chart of the hourly closes during pit trading in May silver futures.

I had thought that the 1006 top of February 12 would start a drop to 800 but today the market took out that high decisvely on high volume.

I have to conclude that May silver is headed for the next strong resistance level at 1096, the 3 1/8 multiple of the 1991 low of 351.

The swings back up toward the 1006 level had grown progressively shorter. This is normally a bearish indication. But now the last swing from point e has become the longest of the three upswings so far so the market not only has taken the bearish implications of a swing analysis of the move up from 915.

I would expect the 1000 level now to function as support for any reaction back toward the breakout level.

 

Silver

Here is and hourly chart showing pit trading in May silver futures.

I still think this market is headed down to 800 or so but the rally from 915 has exceeded my first two targets of 960 and 982. Now my best guess is that we will see a top around the 1000 level and near the February 12 high of 1006.

 

Google

Here is an updated daily chart of Google. I last commented on this particular chart here.

The big break following Google's CFO little private chat with the analysts hasn't changed the picture in my opinion. The strong support at the 3 5/8 multiple of the all time low price of 95.96 held. Moreover, the huge volume (all in 30 minutes of trading) couldn't force the market below support for more than a few minutes and this makes the successful test of support even more impressive.

I think the 337 low is going to hold and that the market will soon be trading above 400.

 

S&P

Here is an hourly chart of the March S&P e-mini futures.

The first hour break this morning occurred on high volume. This after the low volume rally yesterday is more evidence that the market is on its way to 1273 or so. Today the 1290-91 zone should be resistance.

 

Guesstimates on March 2 , 8:50 am ET

March S&P Futures:  I think the market will now drop to 1273 or so before beginning an upswing to  1320.  

June Bonds: The next downside target is at 111-16 while resistance today is again at 113-08. I think the market is on its way into the 107-108 zone.

June 10 Year Notes: Resistance is at 108-04 while the next support level beneath the market is at 107-10. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is117.20 while resistance is still at 119.80. A drop to 113 and below is underway.    

April Crude: The market is on its way to 57.20 Crude is headed for 52.00 and eventually lower than that.

April Gold: I think a drop of $100 is underway. The market should hold resistance at 570 and then drop to 512.

May Silver: I think a drop of $2.00 is underway. The market has moved a little past 982 resistance but I think it will soon drop to 870.

Google: I think the 337 low will hold and that the next move will carry GOOG to 405 and then to 495.

 

Gold

Here is an hourly chart showing pit trading in April gold futures.

I had expected the market to halt its rally near 562 but it has continued upward to 569. I now expect the market to halt near 570. In fact today there was very heavy volume (not shown) on the drop from the high so there is an excellent chance that the rally is over. In any event the next event will be a drop to 512 or so.

 

S&P

Here is an hourly chart of the March e-mini S&P futures.

I thought the market would rally up into the 1288-9 zone but in fact the market has rallied more than I expected, so far as high as 1291.25. But as you can see on the chart volume has dropped sharply as the market has rallied. This is an indication that the rally is just a temporary interruption of a bigger downtrend, one which I still expect to carry to 1273. I think the rally from 1280 is complete and that a swing down to 1273 is about to begin.

After the drop to 1273 is complete I am expecting a move up to 1320 and then to 1350.

 

Guesstimates on March 1 , 8:50 am ET

March S&P Futures:  I think the market will rally to 1288-9 and then drop to 1273 or so.  After that a move to 1320 will probably begin.

June Bonds: The next downside target is at 111-16 while resistance today is again at 113-08. I think the market is on its way into the 107-108 zone.

June 10 Year Notes: Resistance is at 108-04 while the next support level beneath the market is at 107-10. I think notes will reach 104 or so in a few months.

Cash Eurocurrency: The next downside target is117.20 while resistance is still at 119.80. A drop to 113 and below is underway.    

April Crude: The market is on its way to 57.20 Crude is headed for 52.00 and eventually lower than that.

April Gold: I think a drop of $100 is underway. This morning the market has moved a little above resistance at 562 but I still think it will soon start a drop to 512.

March Silver: I think a drop of $2.00 is underway. Late yesterday and early this morning the market moved a little past 972 resistance but I still think it will soon drop to 860.

Google: I think the 337 low will hold and that the next move will carry GOOG to 405 and then to 495.