Spiders - September S&P E-mini Futures: The e-minis broke below 1225 last night and the next chance for a rally will be from the 1208 level. There are many bullish divergences in the advancing issues numbers which themselves are at extreme “oversold” levels. This together with the gloomy state of sentiment convinces me that an very big rally is imminent and that this mini-bear market is near its end.
QQQ: Support remains at 44.00. Resistance stands at 47.50. During the next few months the market should rally to 55 or higher.
TLT - September Bonds: Support is at 115-00 and as long as that holds I’ll stick with my 118-00 upside target.
September 10 Year Notes: Support is at 113-24 and as long as that holds I’ll stick with my 117-16 upside target.
Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80.
Dollar-Yen: The yen is headed for 103.50. From there the rally to 112.00 will resume.
XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133.
GLD - August Gold: I think the market is headed back to 1000. Support is at 915.
SLV - September Silver: I think silver is the way to the 2100 level.
Google: GOOG should find support at 506 or so and the next development will be a move to new bull market highs.
20 comments:
Carl, we're still progressing toward the timing super-cluster of recurring durations on Monday, possibly bottoming a day early on Friday. More downside until then. Just a question of how much.
I am amazed at all the people with lots of market experience through out the years, having been through BEAR markets, really have no clue at what is actually going on...
Its also amazing to see what the US has done in the last decade... If you had bought the S&P in 2000 and held it until today, your return is ZERO!!!
I notice that you removed your guesstimate of S&P 500 at 1500. That still stand? And a question popped in my head, what would you need to see to change that guesstimate?
i think the eurusd has topped out and is ready to fall yet. Target is 1.5600 and i doubt we should revisit the all time highs for enough time to come. Crude oil is headed for 121 and 96 after while 144 is strong resistance. Good trading all !MC
today looks like the big drop we have been waiting for and down under 11K... u the man Carl!
you no longer have your guessestimate for the S&P at 1500-1650!
Carl,
Check out what just happened to GLD and USO.
Carl Good morning
I do not think for one minute we are in a mini bear market - we are heading for the biggest world-wide depression since 1930. I am writing from the Uk and things are moving in an identical way to the US - house prices are dropping at 2% a month, 10,000 people are being laid of a day - this isnt just a passing whim.
Even as Roger Bootle wrote yesterday, we have a 35% drop in house prices here, we only end up with price/earnings ratio at the average. In the last drop in 1990's, we went to 25% below the average.
Just imagine the financial damage of a 50% drop in house prices.
I think we have much much further to fall. Saying that, do I think we can have a major bounce - yes and from here right now.
I believe we saw the bottom and could easily move past 1300 or much further in a rally lasting 2-3 months so people forget the bad news again but long term, no doubt in my mind - a 50% drop in all equity markets and this is going to last 10 years. I also think we saw the top in eur and silver/ gold a couple of hours ago.
Best luck to everyone and thx for the blog and your time.
Catherine UK
I take it the mid point of the box @ 1205.5, refers to a 67 point box i.e 1239 to 1172? Also,is your traget now 1172 or 1205? I had told you earlier that S&P 500 will bottom out 1177- resting at the double top formed in Q1'02. Looks you are too are heading there, albeit slowly.
Catherine UK, seems rather insightful to me. I am also very bearish, but started buying yesterday as it seems we are due another bounce.
Hi Carl,
The short position reinstated just yesterday at 1235.00 was covered today at 1226.00. The rally from the 1201.00 level was undeniably impressive and is clearly indicative of a basing action.
Despite the selling we’ve witnessed over the last few days, a Friday close above 1243.00 buy signal still remains intact. We must close ABOVE that price or I will wait for the next signal.
Thanks.
Kindest regards,
PM
Gann "box theory":
http://members.cox.net/2.cs/BKX%207-15-2008.gif
Also SPX is down one square of 360 from the ~1560 high to 1200: (4.333*360) - 360
Look like another rally tuesday just like last week, at this rate we could be down to spx 1150 by next monday
Carl
Catherine UK said
.. 'no doubt in my mind - a 50% drop in all equity markets and this is going to last 10 years...'
Is that 50% from now or in 2/3 mnths or over 10yrs...and how does she arrive at that forecast?
regards
I still say we are already in the descent of the domed house....and Carl is in denial...LOL I also think we will see at least 10550 on the Dow. Kind regards, Janet
Carl,
Your tenacity is fascinating. I have to say that I come to your blog daily just to see if you are still maintaining a bullish posture.
It seems as if though every time gold breaks to a new high or the averages break to a new low you double down (not with money but in your determination).
You started off with what appeared to be uncanny predictions on time and price but now it's just like that Monty Python skit with the bad Knight having his arms and legs lopped off.
Anyway - the more you are wrong the more I am drawn to read this blog. It's like listening to Prechter all through the 80's & 90's fantasize about his deflationary spiral that never came.
Anyway - I profoundly disagree with your assessment of the market. We have been in a secular bear market since 2000 and secular bull market for commodities since 1998.
Those trends remain in place. The highs in the Dow simply have not been maintained.
Of course - any day now - we are due for a vicious counter trend rally.
Any day now. We're just too over sold to not have it.
Please do post an update to your Domed House theory with some long range estimates on where the markets will be.
Hi Carl,
Considering the sell-off during the last hour of trading and looking at your charts and applying your box theory, it sure looks to me like 1164-1172 is where we're headed before we get a significant rally. All three of your box charts line up in that range. Also, 1172 is a 50 percent retracement of the of the entire 5 year bull run from October, 2002 to October 2007. Looks like we'll work our way down to that number over the next two or three days.
Greg
Just to answer 2.01, I think that we will go down at least 50% in stock indexes and that the bear market will last 10 years.
Why - I think we will drop at a minimum to 2004 low of 800 in the snp and that is 50% approx - I base this on the fact that I also see housing drop 50% based on price/average wage calcs and I see this as the worst crisis for 70 years so to take out the 2004 lows will be a minimum. (the housing crisis will impact all financial institutions bankrupting many and impact consumer spending dragging all earnings down worldwide)
I said 10 year as I think the housing market works in 7-10 year cycles hgh to low but the time scale is not really the issue for me. I follow Elliot Wave and believe that we completed a major 5 wave cycle in Oct 2007.
Elliot Wave International for example forecase the dow below 7200 and have been forecasting that since the high in Oct 2007.
However saying that does not preclude major bear market rallies and I do see one coming up. However I will not be trading from the long side. I will sit out flat until I perceive a new place to sell. I am also a much longer term trader that some I think - for example I have been short continually since Sept (prehigh after the first China crisis in Aug) including sitting out the very painful rally from March to May.
Catherine
Just one other thing answering Greg - a lot of people are looking for 1170 ish level. I would have thought the best strategy is to flatten shorts and do nothing if you believe there is only another 30 points left. Dangerous to be short and cannot confirm the bottom is in so catching a falling knife against the long term trend trying to get long. There are going to be lots of better levels than here.
Pretcher will be so right now for the big picture - everything will deflate.
Catherine
Carl,
I think the S&P will have a short term bottom tomorrow (7/16/08) at around 1196 due to price and time squaring at 1196.
Catherine,
EWI has targets long term MUCH lower than 7200, and I haven't agreed with their wave counts for years, and I still don't. The wave count they need to look at now, is a 3-3-5 in the Dow from the all time highs, which is nearly complete. The first "3" is an ABC from Oct. to Jan. The next 3 is the ABC from Jan to May. My count now has us very late in wave 5 of C. The subwaves of this 3-3-5 also fit in very well. Is it possible that 3-3-5 is wave A of a much larger pattern? Anything is, it's possible I could win the lottery tomorrow (not really, I don't play). But they have forced counts like that for years. Take one move at a time, and let the market tell you where it is, and look at the pattern. As one who has practiced Elliott Wave for many years, the market RARELY IF EVER follows an expected pattern. If you follow EWI enough, you'll notice that they constantly adjust based on data. That's just the way it is. A break of the old all time highs in 5 would negate the larger degree decline, IMHO. I would be very careful tying real estate to the S&P, as the S&P is not a real estate index. Also, when bubbles burst, they tend to happen much more quickly than 7-10 years. The Dow took 3 years from 1929-1932, and the Nasdaq took almost 3 years earlier this decade, and had a very similar pattern.
One comment on sentiment. Instead of just measuring bulls and bears, they should measure the hubris of each side too. It is interesting how few bulls there are, and how a good number of the bears actually ridicule them. Talk about overheated sentiment. And yes, that happens in reverse, think 2000.
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