Spiders - June S&P E-mini Futures: Out of the e-mini last night at 1297. Switching to the June contract this morning which is trading 2 points over March. The market made a lower top yesterday so I have to conclude that it is heading down to a lower low, probably at 1265 or so. I still think the drop from the October 11 top at 1575 in cash is pretty much over and that a rally of at least 200 points is imminent.
QQQ: The Q’s have support at 41.70. A rally to 47.50 should begin soon.
TLT - June Bonds: Resistance is at 120-00 and from there I think the bonds will head down to to 112. I think TLT will drop to 88.
June 10 Year Notes: Resistance is at 119-08. I think the notes will soon begin a move to 112.
Euro-US Dollar: The market has reached the 156 target level. A big break should develop from there. Meantime support is at 149.50.
Dollar-Yen: The yen has nearly reached the 99.50 target level and a big rally should develop soon.
XLE - OIH - USO – April Crude: I think a break of at least $20 will be the next development.
GLD - April Gold: I think gold futures are headed for 1000. Support is at the 920 level in the April contract.
SLV - May Silver: It looks like the silver will make it to 2200 and then begin a big break.
Google: Google has support at 420 and I think the next big move will be upward.
6 comments:
Hi Carl,
A close today above 1345.20 would turn my model bullish. Frankly, I fully expected to see yesterday’s rally at least to that level, but the buying stopped prematurely at 1334.00 before turning lower once more. My original 1324.00 short was a wash, so I tried again after that abbreviated rally attempt. I was able to short again at 1325.00. This was already after a 9-point drop from the high, not the best entry price, but my model was still pointing lower, and this time it was just a 20-point risk.
As far as a bottom is concerned, no one has a clue where that will actually be, I certainly don’t, but I would not be surprised to see the SP’s move considerably lower before any meaningful bottom is in place. With your permission, I will post here when my buy signal appears.
Have a profitable day.
Many thanks.
PM
Carl, I have an incredible respect for your blog and analysis but recently it doesn't really make sense calling for new bull market highs soon. The data doesn't support that at all. But, after the next leg down, will you throw in the towel? If you do, please post it as that will be the day I buy.
Hank
Bearish sentiment has reached same levels of 1998 and 2002 lows.
Advisors Sentiment
12 March 2008 By Mike Burke & John Gray
Overview
There was a dramatic shift in the sentiment readings this week with many of the previous bulls throwing in the towel ?en masse?. Their number fell more that 10% and they are now far outnumbered by the level of the bears.
The bulls crashed all the way to 31.1%, from 41.9% last week. That is their lowest readings since October 2002 when we saw 28.4% on the 11th and 31.0% on the 4th. That was smack at the last bear market bottom which lasted from that July through early March 2003. That period proved to be an excellent entry area as the Dow Jones Industrials wer trading around 7,500 and preparing for a multi-year bull market.
The bears jumped up to 43.3%, from 36.6% last week. Their latest reading is just above their peak from 12-October-2002 when they totalled 43.2%.
The market turned up quickly after those readings in 2002 and the bulls surged to 50.6% just four weeks after their low reading as the DJIA rallied over 700 points. In that same time frame the bears fell down to 28.1%.
The remaining 25.6% of the advisors are classified as correction. There number rose from 21.5% a week ago.
The current sentiment readings are great and very supportive of the idea that a broad new market bottom is in the process of forming.
The sharp increase in advisor pessimism could be blamed on tumbling index action and the increased belief that the economy is in a recession. All three primary stock averages continue to trade below their declining 200-day moving averages and show penetrations of major support. Last week?s acceleration to the downside was enough to cause the latest shifts.
The spread between the bulls and bears is -12.2%, a sharp drop from +5.3% a week ago. This is also the first negative difference since October 2002, shown on the chart as the prior move below the ?O? line. The recent readings remain bullish. There has been and an almost +55% shift in the sentiment spread from the early October 2007 market high. That included a very negative +42.4% difference.
I THINK WE ALREADY BOTTOMED
MAKING ANY NEW LOWS NOW WOULD JUST INCREASE THE SELLING PRESSURE .
NEXT CYCLE PEAK IS STILL DUE INTO OPTIONS EXPIRATION . THIS MKT IS BECOMING MORE AND MORE OVERSOLD FROM WHAT IM LOOKING AT .
THE 400 POINT RALLY DID NOTHING
TO RELIEVE THE OVERSOLD READINGS
SORRY FOR CAPS
JOE
there are two topping patterns on ES to deal with. The double top targets 1200 and so does the triangle breakdown we had recently. There is a bottom pattern trying to form on the 3000 tick chart that I trade. The bounce at 11 am this morning just shows the lack of conviction by either side at this point. In order to move 200 points higher you will need quite a large base to form here.
regards...
Hi Carl,
My model is giving me an ASAP buy signal. So I covered my short March at 1315.50 and went long the June at 1311.50 just moments ago.
I think we may now see that long awaited rally.
Many thanks.
PM
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