Spiders - September S&P Futures: The S&P’s are headed back to the top of last week’s range at 1510. I think it is likely that the low of the correction has been seen and that the market is now headed for new bull market highs.
QQQQ: The Q’s are headed back to the high of their trading range at 49.00 and later this year will go much higher than that.
TLT - September Bonds: I think an extended drop all the way down to 103 has started. The 109-28 level is resistance and the next short term support is at 108-00. TLT shows strong resistance near 87.50 and should soon begin a drop to 80-81.
September 10 Year Notes: The notes have strong resistance at 107-24 and have begun a drop to 102 or so.
Euro-US Dollar: Resistance today is again at 138.50. Strength above there will make the next upside target 141.00.
Dollar-Yen: The 117.50 to 119.00 is strong support in the yen and I think a low will form there and be followed by a move to 130.
XLE - OIH - USO – September Crude: It looks like crude oil has started a big move downward. The 66.00 level is the initial target but I think that the market will drop below 50.00 over the next 12 months. Both XLE and OIH are headed much lower. The 57.80 level looks like the ceiling for USO.
GLD - December Gold: I will stick with my 705 upside target for the futures unless gold shows weakness below the 660 level. In any case the next 100 dollar move should be down. I think GLD will drop below 60 on its way to much lower levels. Resistance in GLD is 68.50.
SLV - September Silver: Weakness below 1250 in the futures will convince me that an extended drop has started. Meantime I shall stick with my1370 upside target. SLV should bounce off of resistance near 133 and then drop below 120.
Google: I think the market will hold support near 497. Next upside target is 580-85. Google will trade above the 600 level later this year.
7 comments:
Thanks PMK for your valuable comments/analysis over the past 3/4 days. Normally I am very careful about following someones advise but last friday I bought some Dow futures around 13,2oo.
So far you were absolutely spot on.
Again thxs.
Jim
There we have it ... as predicted on friday here in the comment section.... screaming buy////
above 13500 we will see the mother of all short covering rallies.
I hope all you folks bought something on friday and put your money to work
Commercials get long the VIX in a Big Way. Even if you don't agree with a dissenting opinion, it is important to pay attention to it, particularly if others do. Finally, if the commercials are correct, it looks like we have a category 5 volatility storm headed our way. This market is going higher.
With all the volatility of the past three weeks or so, the SMA that is getting my attention right now is the 100 day SMA, where the VIX sat 85.2% above the 100 day SMA of 15.28 as of Friday’s close.
This is not quite unprecedented, but since 1990 there have been only 13 trading days – several of which have been clustered together – in which the VIX has closed 80% or more above its 100 day SMA. Without an exception, these have all been excellent times to predict a VIX reversal, as the minimum VIX contraction 50 trading days later has been 18%. Specifically, the mean VIX contraction is 16% in 3 days, 20-21% in the 5/10/20 day period, and a whopping 33% some 50 trading days out.
Given that VIX options still have 8 trading days left for the current cycle, I suspect that the August 25 puts would be a good play, thought the 22.50 probably deserve some attention as well.
Anyhow all this leads us to the mother of all short covering rallies.
Dave
Circumstances are temporary, as are prices, as are causes of panic. Remember the “bird flu?” Probably not. Can anyone even remember what scared the market in May of 2006? Or March of 2005? Or October of 2005? Or in any other recent “less than 10% correction?” Those protesting that “sub-prime” will “bring down the markets” or “the economy” are just farts in the wind, and they will be looking for something else to scare you with inside of a year. Since the vast majority of traders and “investors” are ruled by emotion, I think the fear-mongers will succeed in both scaring n00bs and creating cult members.
This, too, shall pass.
The circumstances that forced selling will fade. Ask yourself, who is the smart money? The idiots that were forced to sell, or all of the willing buyers that stepped in to provide extra liquidity to the stock market?
If you’re a day trader, enjoy the volatility, it won’t last.
If you’re of a longer outlook, enjoy the lower prices on stocks: they won’t last.
For the record: several of your comments are quotes from other blogs. One is from my blog, I did not post it here. Two others are from Bill Luby's VIXandmore blog, and since he has a blogger ID, I'm pretty sure he didn't post it here, either.
It's a sad world when quotes can't attributed and people pass off others' words as their own.
yes it is a sad,sad, sad world we are living in here but nevertheless this market is going much higher lets be clear on this.
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