Thursday, October 09, 2008

Guesstimates on October 9, 2008

Spiders - September S&P  E-mini Futures:  The e-minis will probably drop into the 930-40 range before a rally of 200 points or so begins. For the moment the market is stuck in a 963-1045 trading range. 

QQQ: The Q’s should find support at 31. 

TLT - December Bonds: I think a big drop is underway in the bonds. It should carry the market back to 111 or lower. 

December 10 Year Notes: The notes are now headed for the 110-111 zone. 

Euro-US Dollar: The trend has reached the 135 target level. A rally to 139 is the next likely development. 

Dollar-Yen: My revised 99.00 target has been reached. I think this market will stabilize and the yen will soon begin a big rally. 

XLE - OIH - USO – November Crude: Next downside target is 75. Resistance above the market is at 97.00.    

GLD - December Gold: Gold still has resistance at 935.  I think gold will soon drop to 600. 

SLV - December Silver: Resistance is at 1390. Next downside target is 900.   

Google: Google should find support  near 315 after which a big rally can start.  

38 comments:

Anonymous said...

Carl,
You mention a rally in the yen. What do you mean by that since the cash yen and futures move in opposite directions. Are you looking for the yen to move back in the directon of 112 or lower than the 99?

Anonymous said...

Carl, you mention 930/940..I think the next attractor is the 1987 'crashline'..you can see in the link attached..the daily, the weekly and the monthly got eachtheir own dynamic stucture..
http://fredwilhelmus.googlepages.com/crossovers

Anonymous said...

Ex, I am indeed a day trader. I trade emini index and commodity futures so why wouldn't I be a day trader. Since eminis are cash settled daily what is the real purpose in holding overnight? When I want to position trade I do so with options. If you notice I said a break of a trend line signaled that a change of trend is imminent not definite. My entries are based on achieving the highest probability for success due to realizing when a trade is no good very early. Following the direction of the major trend allows me to be profitable even when I do not get the best entry. I use many more tools to justify my entries such as volatility, ATR, price action, as well as time of day. Any trader that has traded for any amount of time knows that when you are right on a trade your profits will be quickly realized. The only thing worse than buy and hold IMHO...is trade and pray. My trading plan was created by me, but even the best trading plan is no good if the trader doesn't possess the discipline to adhere to it. My risk/reward, my entries, exits, and stops are all done before I enter a trade.

As for the trader(Operator)that said following a trend means that you will miss both the bottom and top, you would be correct. Show me a trader that catches the bottom and the top and you have just shown me a liar. Show me a trader that attempts to catch the bottom and the top and you have just shown me someone who will not be a trader very long. As always I enjoy the discourse. Keep up the good work guys.

Anonymous said...

Hi Carl,

The 7/2006 low to the 7/2007 high was 250 trading days. The 10/2007 top to yesterday = 250 t.d., with one day leeway possible. Another possibility targets Monday 10/13, + or - one t.d.

Anonymous said...

though i am an uneducated peon with no degrees except experience.. i make my living as a trader...EVERY trade i take is based on a predefined set of entries that are designed to catch the maximum number of traders looking wrong way at extremes...each entry based on the geometry offers 5/1 reward risk..strictly as a by product of the tools, it sometimes catches tops and bottoms... so i agree that randomly picking tops and bottoms is for fools... but i disagree that trading at the extremes based on a rigourously defined set of tools is not done by skilled traders .. i do not post on open forums for a reason... years ago i did... my work came back to me in a mass mailing'' secrets of the billionaire traders''word for word .. all my charts..

Anonymous said...

Ι think the bear market is over.

The 960 is the final support.

Anonymous said...

we need more magazine covers!@!!!!@

Anonymous said...

Louise Yamada's has 960 as her final target.

Anonymous said...

Carl I am picking bottom at 940!

Unknown said...

Where did Yamada say that 960 is her final target? thx

Anonymous said...

Dennis .. on Bloomberg a few weeks ago .... I made a note of it at the time... personally, I didn't think we'd get there!

Anonymous said...

Other than during the Great Depression, the Dow has generated a 100-day rate of change below -29% 4 times before the present: Nov of 1917, Oct. 1974, Oct '87, Oct. '02.

In each case the structure being developed was a double bottom (usually the very sharp ROC decline was part of the first low) from which developed fairly rollicking rallies.

During the Depression this condition was more frequent but usually led to significant counter-trend rallies, which failed, though those rallies were not guaranteed by the presence of this condition.

Anonymous said...

I think I'm about to toss my cookies. I'm hoping that this is a contrarian indicator, that I will ralph at the lows.

severdog

Anonymous said...

We may be too early in this recessionary cycle for this to be the low. Many fail to realize the impact that the housing bubble had as the driver of the economy. We have shipped our manufacturing base overseas and tried to create a service economy that actually produced nothing and we eventually began to outsource many of the service jobs to India. Think about the number of jobs that were created as a direct result of the housing bubble...construction, real estate agents, appraisers, mortgage officers, landscapers, etc. We must also consider that 75% of GDP is consumer spending and with wage growth stagnant for the past decade we can safely conclude that most spending has been due to readily available credit. Then once we consider that credit will be less available to the masses, homes continue to lose equity, and the credit worthy begin to tighten their belts we may be in for a mean reversion that lasts many years. I personally do not think that the powers that be have taken all of these things into proper consideration as they try to prevent the inevitable.

Anonymous said...

and Adam ... you had 959 as your target I believe?

Anonymous said...

Well, we just hit 959 on the SPX cash. that's a 74% retracement of the '02-'07 rally, and lines up w/ the top of the trading range that defined the bottoming process in '02-'03.

Don't know if it'll hold as support, but whether it does or not is important, in my view. If yes, then here comes a bottoming process on top of that number. If no, then we could easily see the lows of that range tested, below SPX 800.

Unknown said...

Thanks duncanb. I did not think we'd get there either. And now it is in the rear view mirror!

Anonymous said...

AS i stated before...

The SP should (has to) go to 910 at least to become attractive for long term investing...and it could go lower than this...

Stop trying to get the bottom, its a suicide attitude...

Balsamo

Anonymous said...

Hi Carl,

I'm still long one from 1000.00 from yesterday, I just added one more at 950.00 minutes ago. I'm a sucker for a good bargain, or maybe just a plain sucker. I still have no buy signal, but we are way over done on the down side. I plan to continue to add if the market continues lower.

Thanks.

Kindest regards,

PM

Anonymous said...

Oh well .. those levels are academic now

Anonymous said...

bend over and kiss your a$$ goodbye, 940....

Anonymous said...

Thats it, its over... This is carnage... A decade has gone by and the DOW is back to where it was in 2002!

This is suicidal for everyone

Anonymous said...

This is a very SICK and SAD market, I would suspect that we CAPITULATE either tomorrow or Monday!

Prolly have a 1000pts drop!

Anonymous said...

Hi Carl,

As quickly as this market is now moving, I already placed my order to buy my third position at 900.00 on a limit order if we get there overnight. At some point, we're going to see a bottom, maybe after we break 750.00, I have no clue, but I can certainly hold these positions, it's far less cumbersome than buying the equivalent portfolio in stocks. We're probably witnessing capitulation, or something close to it. So, I will hold my longs even if I have to roll them over into March, if need be, to see this longer term trade work.

This is an incredible long term buying opportunity, in my view, although I still have no near term buy signal yet.

Thanks.

Kindest regards,

PM

Anonymous said...

Carl,

your opinion please...

Anonymous said...

Quiet enough in here? Sounds like a "Swing low, sweet chariot" moment.

Anonymous said...

Dow's 100-day rate of change now -33.76%. The only times that has occurred before, using data going back to 1915, were during the Great Depression.

The first 3 of these were good for nice counter-trend rallies. In '31 and '32...no dice. Didn't matter.
Likewise in '37.

The market is discounting a view that all the money pumping and creative policy accommodations will not work.

Anonymous said...

AT TODAYS LOWS.....PRICE FINALLY HIT THE MINIMUM DOWN SIDE TARGET THAT HAD BEEN IN PLACE SINCE THE MAY SWING HIGH IN DIA...at the same time minimum downside targets that had been in place for weeks and months across the board in my traders were hit.. the target in BBY for example was almost two years old since the short at 55..nothing special in all this.. it is known to all the traders i know..lifted all shorts in my position account today..

Anonymous said...

Carl
kleenup2 at 10:26am -good comment.
Appreciate your input-makes sense to me-the meat out of the sandwich will do.!!
regards
Rod

Anonymous said...

I think we are all amateurs on here... I dont think the pros know what is going on in the market... Everyone is trying to pick a bottom and we have all gotten burned, myself included!

In my short experience with the market, it looks like you make money in Bull markets and loose your shirt in Bear markets!

I dont think anyone predicted the market to plunge like this in 2weeks...

Good Luck

Anonymous said...

ex,

The super bears over at Elliott Wave have been expecting this. Trouble is, they have been expecting this since the early 90's. When you cry wolf for nearly 2 decades, people just yawn and walk the other way.

Now, however, it looks like they were right, they just didn't expect the bull to run till 2000 and didn't expect such a powerful B wave from 2002 to 2007. The big C wave that is in process is behaving just like a C wave, though, now that we are in the third wave of that C. Even they don't know where 3 of 3 of C will bottom, but it looks like we're not done yet. When? I'm guessing next Monday or Tuesday for an intermediate term bottom. THE bottom may be months or years out.

If the market is a predictor of the general economy, it's looking like things are going to get rather bleak out there for the next several years. I hope I'm wrong, hope the super bears are wrong, but the market seems to be saying they are right.

Good luck all.

Greg

JavaGuru said...

So many solid comments on here from very intelligent people, kleenup, carl et al. It is a shame we have to sort through the chaff, but that is OK.

There is an anonymous poster up above who I wish would give us a nickname so we can ask him questions. To the anonymous poster who posted the 12:20 PM message today, 09 Oct 2008, and whose message begins with:

"though i am an uneducated peon with no degrees except experience.. i make my living as a trader...EVERY trade i take is "

I'm heavily researching market geometry and I have found that Pivots, and Murrey Math lines are phenomenal. The application of a trading plan with these is key. I would love to exchange ideas with you (as well as others on here).

Best of luck folks.

To the newbies, keep up the fight. I'm up almost 50% in my 401K, based on market geometry alone, revolving around a pivot system, i.e. Monthly, Quarterly, and Yearly pivots.

Anonymous said...

Hi Carl,

I was filled at 900.00, so now I have three positions, averaged in at 950.00. I plan two more positions, i.e., one at 850.00 and then the fifth and final position at 800.00 if we get there. These are mini contracts, so they come together as one large contract with an average entry price of 900.00, this is a good place to ride the next bull market when ever it comes, hopefully sooner than later.

I suppose I could always wait for the bottom, but no one knows where that is, so I'm positioning myself for that day as the market continues to move lower.

Once I have a buy signal, I will buy more aggresively.

Thanks.

Kindest regards,

PM

Anonymous said...

Amazing, guys and gals, and maybe a glimmer of hope, that Treasury yields were not at new lows today and gold is not above the March high.

Anonymous said...

I have studied and analyzed the lack of price confirmation for gold as a safe haven but then realized that I have overlooked a most important data point. When gold peaked in March the dollar was 13 percent lower. Gold is currently 13 percent lower than it was in March. If you price gold in Euros, Pounds, or Loonies then it is at an all time high. Just my perspective.

Anonymous said...

thanks kleenup2, great point

Anonymous said...

Greg,

I dont care who you ask or what everybody says now... Nobody expected the DOW to drop 3000pts in 30days... NOBODY!!!

This market is BRUTAL and out right SCARY... Peoples lives are destroyed, baby boomers have to go back to work because of this... And you are going to give me people at Elliot Wave said this 10yrs ago!

Good traders, trade both markets, up, down, and sideways... The people at Elliott Wave missed the big uptrend this past 10yrs!

I know now all the nay sayers and I told you people are coming out and saying, I told you so, why didnt they come out 30days ago and say we are going to retest 2002 lows, because NOBODY knew... Even the best charts, didnt know how bad!

Good Luck
ex

Anonymous said...

Kleenup:

Why didnt ur charts tell you that the DOW will drop 3000pts a month ago?

I know people will say we are in a BEAR market, yada yada yada... but even the so called pros on Wallstreet never would have imagined the DOW to tumble 3000pts in a month... Everyone was saying we will have a new president rally and then in 2009 we will make new lows!

Trust me, nobody knows... but good traders, trade what they see and react accordingly... im not by any means a good trader, but i have not traded badly during this downtrend... i am down about 10%, but peoples accounts are down anywhere from 30-70%, ouch!

Im sure in time, whether its 5, 10 or 20yrs the indices will recover... Something new will come into the markets, whether it alternative fuel, new tech, homes, etc., Wallstreet will find a new catalyst to run the markets up again! Everything works in cycles and Wallstreet is corrupt, greedy and fearful at the same time...

Good Luck
ex