Guesstimates on July 31, 2009

September S&P E-mini Futures: Today's range estimate is 975-990. I think the rally will carry the e-minis well over the 1000 level over the next few months.

QQQ: I expect to see 40.50 before a modest reaction begins.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: I am going to stay bullish for a move to 76 until and unless weakness below the 62.50 level develops.

GLD – December Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Update

Here is a 30 minute bar chart of e-mini day session trading. My estimate for today's day session range was 980-995. I got long near the open on a small reaction that ended at 981.50 and added to the position after the market made a new high for the day. The opening 30 minutes was very strong and since early strength generally continues for the first 2 hours or so I thought I would try hold on for a move to 1000 or so. But the market stalled a point shy of the top of my original range estimate. I didn't like the steady drift downward from the day's high so I decided to accept a smaller profit than I had originally anticipated figuring that half a loaf is far better than none at all.

One rule of thumb I find useful is that within an up trend the market often will advance into new high ground by an amount equal to either 50% or 100% of the size of the preceding reaction. In this case the reaction was 15 points and adding that to the 980 temporary top level gives 995 as a reasonable target (purple rectangles).

The move up from the 865 low of early July has not been corrected in any substantial way. This makes me think that the thrust upward from the 965-980 trading area is going to be relatively brief. I think the next break will amount to 25-30 points and will probably stop somewhere near the lower green dotted trend line. Midpoint support is at 972.

The next significant midpoint resistance level is at 1015. This is the midpoint between the September 2008 rally top at 1291 and the November 2008 low at 739.

sold longs at 989.75

long second unit at 986.25

long one unit at 982.50

Guesstimates on July 30, 2009

September S&P E-mini Futures: I think the e-minis will soon be trading in the 995-1000 zone. Today's range estimate is 980-995. I think the rally will carry the e-minis well over the 1000 level over the next few months.

QQQ: The next upside target at 39.90 has nearly been reached. I expect to see 40.50 before a modest reaction begins.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The market broke below 65.00 support but I am going to stay bullish for a move to 76 until and unless weakness below the 62.50 level develops.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

sold long at 965.75

long 1 unit at 969.75

Guesstimates on July 29, 2009

September S&P E-mini Futures: I again estimate today's day session range as 960-975. I think the rally will carry the e-minis well over the 1000 level over the next few months.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The market moved visibly above 67.50 resistance so I think it is headed to 76. Meantime support is at 65.00.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Contrary Opinion Forum

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Is the recession over?

Here is my latest post on "The Art of Contrarian Trading".

Guesstimates on July 28, 2009

September S&P E-mini Futures: I estimate today's day session range as 960-975. I think the rally will carry the e-minis well over the 1000 level over the next few months.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The market moved visibly above 67.50 resistance so I think it is headed to 76.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Sold long unit at 975.00

Lots more upside

I think we now have information which permits a reasonable projection for the next intermediate term top - one which will be followed by a break lasting a couple of months and dropping the S&P 100-150 points.

The first chart above this post shows the 10 day moving average of the daily count of advancing issues on the New York Stock Exchange. In a bull market my rule of thumb for this indicator works like this: expect an intermediate term top sometime between two and four months after the peak value the 10 day moving average reaches during an intermediate term uptrend. Since I think the latest such uptrend began from the 865 level, the peak last week in this moving average projects an intermediate term top sometime between September 24 and November 24 of 2009.

Where might this top develop? I drawn a trend channel of the weekly chart you see above. Note how the upper dash line of the channel meets the descending trend line from the 2007 top in late September near the 1120 level. That is also where we find the midpoint of the entire drop from 1576 to 666.

So I think the next intermediate term top will probably develop sometime between late September and late November near the S&P 1120 level.

Bubble in China ?

Here is my latest post on "The Art of Contrarian Trading" .

Long one unit at 969.50

Guesstimates July 27, 2009

September S&P E-mini Futures: I estimate today's day session range as 968-985. I think this rally will carry the e-minis well over the 1000 level over the next few months.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The market moved visibly above 67.50 resistance so Ie think it is headed to 76.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Why I got in and then out

Here is a five minute bar chart today's e-mini day session. In the up trend from the 865 low there had been two previous breaks of about 15 points. A third break of that size from yesterday's high at 976.50 would have carried to the dotted green line you see on the chart. When the market is strong is tends to stop before it gets to an exact resistance level. So when the e-minis made new day session lows I got long at 963.00.

I was prepared to buy the second unit near the low of my range estimate for today of 960-75 (blue rectangle). Instead, the market rallied immediately. I sold my long unit after I saw what I thought would turn out to be a volume climax bar (red arrows).

I am generally a pretty aggressive profit taker. My aim as a trader is to take advantage of fluctuations around an underlying trend. But I get even more aggressive taking profits after an 8 day, uncorrected up trend such as the one that began from 865. I have found that people tend to place way to much emphasis on how they get in to a market position. It is my view that learning to accept profits at the right time (which will depend on the position of the market relative to its underlying trend) is of equal or greater importance.

sold long unit at 969.75

Long one unit at 963.00

Guesstimates on July 24, 2009

September S&P E-mini Futures: I estimate today's day session range as 960-975. I think this rally will carry the e-minis over the 1000 level over the next few months.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The trend in crude oil is now downward and will carry the market to the 53.00 level. Resistance above the market is at 67.50.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Midpoint support and resistance

Here is a 60 minute bar chart showing day session e-mini trading during the rally from the 865 low point. I think the market's action over the next few days will be contained by two midpoint levels that I have drawn on this chart. The higher one (red dash line) is the midpoint between the 666 low and the September 2008 rally top of 1291 and it stands at the 979 level. The lower one (green dash line) is the midpoint between the October 2008 high of 1067 and the November 2008 low of 739. It stands at 952.

My best guess is that the initial break will carry the market down 10-15 points - the biggest drop on the way up has been 15 points (twice). Another rally to slightly higher highs should then develop and be followed by a bigger break - maybe 25 points or so.

I have drawn a trend line from the 865 low - a so called 2/3 speed line - it intersects the 940 level today, 2/3 of the way up from 865 to 976. Such trend lines are often useful when the market has an uncorrected advance as it has had recently. In any event, I note that a 25 point break from 979 would carry the e-minis down to that trend line on Monday or Tuesday.

After this sideways action I expect the e-minis to begin a move that will take them over the 1000 level.

More bull market evidence

Here is my latest post on "The Art of Contrarian Trading".

Climactic volume

Here is a five minute chart of e-mini day session trading. I think we have just seen a short term volume climax (red arrows).

This implies that the market is near it high for the day and probably near the point at which it will begin a break that lasts a day or two. I think such a break is imminent for two reasons. First of all, the e-minis have risen eight consecutive days without breaking a previous day's low. This is an unusually long streak - a long term sign of strength but a short term warning of an imminent reaction. The second reason I think a drop lasting a day or two is likely is that today was an obvious breakout day to the upside. As such it will attract a lot of attention and this is likely to give longer time frame traders a chance to sell into strength.

Even if the market does break for a day or two here, I don't think it will go straight down. Instead I think we shall see some sideways trading above the 960 level first. I want to be a buyer on the first reaction that matches the size of yesterday's drop (purple rectangles). Support right now is at the midpoint between today's high and yesterday's late reaction low (red dashed line).

sold long position at 964.50

Long second unit at 958.25

long one unit at 954.00

Guesstimates on July 23, 2009

September S&P E-mini Futures: I estimate today's day session range as 948-965. I think this rally will carry the e-minis over the 1000 level over the next few months.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The trend in crude oil is now downward and will carry the market to the 53.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Why I got in (and out)

I just sold my long position at 951.75. (I added the chart about 5 minutes after this post first appeared.) The market had held support at 951.50 (purple dotted line) but I didn't like the fact that it failed to bounce up away from that level as soon as it was hit. Instead the ES hovered there, even edging a bit lower at times. Then we saw a rally to 954, but a rally on relatively low volume. In the last hour of trading the market then put in a wide range, high volume down bar from this lower top (red arrows). This kicked me out.

Why did I buy the apparent breakout earlier? Well, as you know I am bullish on this market. And it wasn't showing any tendency to react. The real danger I saw was that it would run up 10 or 20 points without me, and I was willing to accept a modest loss to guarantee that I wouldn't be left behind in that event

sold longs at 951.75

Long second unit at 955.75

Revised range estimate

Here is a five minute chart of e-mini day session action. The e-minis have had a run of seven straight bullish days, yet the market still creeps higher. I think this is very bullish action. It is as if the stock market is determined to drag every bear and reluctant bull, kicking and screaming, back into a fully invested position. I think we shall see the e-minis trade well above the 1000 level sometime during the next two or three months.

You can see the sequence of higher lows on this chart. Each reaction is shorter than the last. I think we have seen the day's low so I am revising my range estimate to 945-965 (blue rectangle) and think that the day's initial rally will prove to be about half of the day's range (purple rectangles). I now expect midpoint support near 951.50 to hold (purple dotted line).

long one unit at 955.25

Guesstimates on July 22, 2009

September S&P E-mini Futures: I again am going to estimate today's day session range as 940-960. I think this rally will carry the e-minis into the 965-80 zone and eventually over the 1000 level over the next few months.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

September Crude: The trend in crude oil is now downward and will carry the market to the 53.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Why I got out

Here is a five minute bar chart of day session e-mini trading. I just sold my long position at 946.25. Here was my thinking.

In my last post I said that I had revised my range estimate for the day to 940-954 (blue rectangle). So I was not expecting a rally to new highs today. So if the market wasn't going to new highs today, where might it stop? I saw midpoint resistance at 948.50 (purple dotted line). The rally had already gone a little further than the rally earlier today (purple rectangle). Yesterday's close, a common resistance level on down days, stood tat 949. And the rally from the day's low had struggled upward, never developing good volume or acceleration upward.

So it seemed wise to accept a small profit, record today's results in blue ink, and let someone else enjoy the rest of the day holding my longs.

Sold longs at 946.25

Long second unit 942.50

Long one unit at 941.25

Reaction low

Here is a five minute bar chart of the last few e-mini day sessions. I estimated this morning that today's day session range would be 940-960 (blue rectangle). Now I think we have seen the high of the day, but I also think that the drop from this morning's high is nearly over. Why?

The biggest break on the way up from the 865 low was 15 points, and a break of that size from this morning's day session high would halt at 939 (purple rectangles). You can also see a short term trendline (green dashes) which currently stands near 940. Midpoint support is at 941 (purpled dotted line). Finally, the low 0f the trend channel encompassing today's drop stands near 939.

I conclude that the 939-941 zone is strong support. Whether or not it can support a rally to 960 remains to be seen.

Some of you may wonder why I got long at 948 earlier when I had predicted a 940 low for the day. The reason is important to keep in mind. Never trade as if your forecast is sure to come true. Instead you have to weigh probabilities, the evidence before your eyes, and compare the likely gains and losses of alternative courses of action. After the initial break this morning I noticed that it carried the market down about 9 points - reactions during the past few days have run 7-10 points. I was bullish and didn't want to leave a good profit on the table if the trend should turn out to be even stronger than I thought. So I bought a reaction that carried the market about halfway down to its earlier low at 945. I had to take a small loss, but I will do the same thing in the same circumstance next time.

Sold long at 944.50

Long one unit at 948.50

Guesstimates on July 21, 2009

September S&P E-mini Futures: I think this rally will carry the e-minis into the 965-80 zone and eventually over the 1000 level over the next few months. I estimate today's day session range as 940-960.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

EX trader

This fellow has made a number of snide remarks about me during the past year, including one (the very last one below) which was truly stupid. I thought you might like to see his forecasting record over the past week. I seriously doubt that any of these "shorts" were actual entries.

___________________

extrader said...

tomorrow should be a down day in the SPX... coming up against resistance at 907-912-918!

cant see it running higher here... puppet masters pumped it up... have support at 890... these are SPX support/resistance not ES...

Good trading
ex

7/14/2009 03:58:00 PM

extrader said...

SHORT 914 ES

7/15/2009 09:36:00 AM

extrader said...

SHORT 919 ES SECOND

7/15/2009 10:36:00 AM

extrader said...

Fermin,

Yes the down day was for Today WED.

SHORT 924 ES - LAST ONE

7/15/2009 01:43:00 PM

extrader said...

that 10pt gap on the chart will need to be filled sometime...

7/16/2009 01:32:00 PM

extrader said...

SHORT 932 ES

7/16/2009 02:17:00 PM

extrader said...

SHORT 934 ES - SECOND

THIS IS GOING DOWN BIG TIME!!!

7/16/2009 02:29:00 PM

extrader said...

SHORT 936 ES - LAST ONE

AVERAGE IS 934 STOP IS AT 940...

7/16/2009 02:51:00 PM

extrader said...

SHORT 941.50 ES

7/20/2009 01:16:00 PM

extrader said...

SHORT 943 ES - SECOND

7/20/2009 02:26:00 PM

extrader said...

This market is about to turn to the downside... Rally is over!

7/20/2009 02:28:00 PM

extrader said...

SHORT 943.50 ES - THIRD N LAST

7/20/2009 03:01:00 PM

extrader said...

why did u lose a point and half? u could have sold it at 947.50!

7/20/2009 03:21:00 PM

Sold long position at 946.25

At 10:50 am

Here is a five minute bar chart of day session e-mini trading. My range estimate for the day is 935-950 (blue rectangle). There should be pretty strong support at 935-36 for three reasons.

First, the short term green dotted trend line will enter that zone in an hour or so. Second, the midpoint of Friday's reaction is 936 (dotted purple line). Third, a reaction from today's high that equals the size of Friday's reaction would carry to 935.50.

I think this market is very strong and that we are still in the early stages of a move that will carry the S&P well over the 1000 level.

Long one unit at 938.25

Guesstimates on July 20, 2009

September S&P E-mini Futures: I think this rally will carry the e-minis into the 965-80 zone and eventually over the 1000 level over the next few months. I estimate today's day session range as 935-950.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Still expecting a move to 1070. Support is at 900.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

New Bull Market

Take a look at my latest post on "The Art of Contarian Trading".

Guesstimates July 17, 2009

September S&P E-mini Futures: I think this rally has strong legs and will carry the e-minis into the 965-80 zone and eventually over the 1000 level over the next few months. I estimate today's day session range as 923-940.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Support at 920 was broken. I want to give this uptrend the benefit of the doubt so I will wait for weakness below 900 before I conclude that the market is headed much lower.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Near high of day

Here is a five minute chart of e-mini trading over the past two day sessions. In my last post two hours ago I said that I thought the market still had a good shot at the top of my range estimate (blue rectangle) at 935 within the subsequent hour or two. The e-minis are within a point of 935 as I write this and I see a small volume climax bar on this chart (red oval) near the high.

My best guess is that the market will stall near 935 and then break 15-20 points. A 15 point break (purple rectangle) would be as big as the biggest reaction on the way up from the 865 low.

Update

Here is a five minute bar chart of day session e-mini trading covering the past couple of weeks.

My range estimate for today is still 915-935 (blue rectangle). I still think this market has a good shot at 935 over the next hour or two, but I also think a break of about 15 points, the same size as the last significant reaction (purple rectangles) is likely to begin from today's high.

There is no midpoint support in the 915-920 zone. But I see a steep trend channel up from the 965 low which crosses the 915-20 zone late today and early tomorrow. My best guess is that the upcoming reaction will find its low near one of the two lower channel line I have drawn.

I think the e-minis are in the very early stages of a strong uptrend which will last into October and carry the market well above the 1000 level during that time.

Help me out here

I know a number of you have bought my new book "The Art of Contrarian Trading". To you I offer my thanks!

Every author wants feedback on his work. If you have read my book the best way to do that is to post a review on Amazon. Just click on this link which takes to to the spot where you can write a review of my book on Amazon. It doesn't have to be long - just a few sentences would do. Tell people what you think of the book, what you liked about it (or didn't like). Pretend you are explaining to a friend the strong and weak points of the book.

If you are too shy to write an Amazon review, then why not put your thoughts about the book in an e-mail to me- send it to CarlFutia99@gmail.com.

Thanks so much for your help!!

Guesstimate on July 16, 2009

September S&P E-mini Futures: I think this rally has strong legs and will carry the e-minis into the 965-80 zone and eventually over the 1000 level over the next few months. I estimate today's day session range as 915-935.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. I think a swing to above the 5.00% level is underway.

TNX (ten year note yield): Support is at 3.25%. I think a swing up to 4.30% is underway.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Support at 920 was broken. I want to give this uptrend the benefit of the doubt so I will wait for weakness below 900 before I conclude that the market is headed much lower.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

The dog that didn't bark

Here is an hourly chart of the e-mini day session for the past six weeks. The rally from Monday morning's early low has been almost uncorrected - a very unusual show of strength. In my judgment the Goldman Sachs and Intel earnings reports were not by themselves enough to push the market up like this in normal circumstances. But circumstances are not normal. There is a very large investment crowd that is betting that this market will go a lot lower because the economy is deteriorating. The earnings news has put a small hole in that particular balloon - the economy may in fact not be deteriorating. And so many are so under invested that it doesn't take much to scare them back into the market. I think there is much more portfolio reinvestment to come as bears gradually give up the ghost. This market is headed much higher.

Update

Here is a 60 minute bar chart of e-mini day session trading for the past 6 weeks. The e-minis have aready rallied above the high of my range estimate for today (blue rectangle). The market has reached the average level (923) of several highs and lows that developed during the past six weeks (dashed red line) and is just below the 928 high (red oval) of the big rally on the way down to the 865 low. My guess is that the e-minis are about to begin a reaction which might last as much as a day. The worst I see on the downside is a drop about equal to the 15 point drop on the way up (purple rectangles).

As you know I think this market is headed for 965-80 and eventually above the 1000 level over the next few months.

Guesstimates on July 15, 2009

September S&P E-mini Futures: After yesterday's day session close the e-minis rallied to and above resistance which stood in the 905-910 zone. This is one more piece of evidence that the current rally will continue at least into the 965-80 zone. Meantime I expect today's day session range to be 900-920.

QQQ: The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. The next big move will be a swing upward in yield to above the 5.00% level.

TNX (ten year note yield): Support is at 3.25%. I think that the next swing up is about to begin and should take the yield on the notes to 4.30%.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Support at 920 was broken. I want to give this uptrend the benefit of the doubt so I will wait for weakness below 900 before I conclude that the market is headed much lower.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

Sold second long unit at 901.75

Revised range estimate

Here is a five minute bar chart of today's e-mini day session. I have slightly revised my range estimate for today to 892-910 (blue rectangle). If this market is going to get close to 910 today I think it will hold midpoint support at the dotted purple line. If this support fails then I would expect a drop to 890-92 followed by a rally to 900. But in this latter case I think we would then have already seen the high for today.

Sold one long unit at 900.00

Long second unit at 894.00

Long one unit at 894.50

Guesstimates on July 14, 2009

September S&P E-mini Futures: Today's day session range will be 890-910. The e-minis are in the early stage of a move which will carry into the 965-80 zone.

QQQ: Support is at 34.00. The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. The next big move will be a swing upward in yield to above the 5.00% level.

TNX (ten year note yield): Support is at 3.25%. I think that the next swing up is about to begin and should take the yield on the notes to 4.30%.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Support at 920 was broken. I want to give this uptrend the benefit of the doubt so I will wait for weakness below 900 before I conclude that the market is headed much lower.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

The next few days

Here is a 60 minute bar chart showing the last two months of e-mini day session trading.

The market has bounced off of support at 867. I think it is headed for the 965-80 zone. But I also think that there will be reactions along the way. I am trying to guess where the first reaction of 20 points or so is likely to start.

The drop from the June top was contained by a very clear trend channel (red dotted lines). A rally back to the top of the channel would now be the obvious expectation. What interests me is that right near the top of the channel there are three other resistance levels. The first is midpoint resistance at 906 (purple dotted line) based on the big rally on the way down to the 865 low. That rally was about 44 points in length and a rally of the same size would carry the market to 909 (purple rectangles). Finally, the midpoint of the entire reaction is at about the 910 level (red line). If the current rally keeps up its pace (rising green line) it should reach the 905-10 zone in a couple of days (green oval). From there a reaction of 15-20 points to a higher low would be a normal expectation. Should the market blow right past that concentrated resistance it would be an indication of great underlying strength.

At top of range estimate

Here is a five minute bar chart of e-mini day session trading for the past several days. The market has rallied to the top of may range estimate for the day (blue rectangle). In doing so it put in what could well be a wide range, volume climax bar (purple oval and price bar immediately above the high volume bar). The 889 level is midpoint resistance defined by the rally that preceded the low at 865.25 (purple dotted line). Moreover, the market has rallied to the upper parallel of a clearly defined trend channel (green dotted lines).

These are all reasons to expect a reaction to start from approximately the 890 level. If one does develop I doubt that it would carry the e-minis down more than 8-9 points, a little less than the size of the reaction we saw early this morning (purple rectangles).

I think the market has begun a rally that will take it into the 965-80 zone over the next few weeks.

A contrarian goes to Barnes and Noble

Here is another post on "The Art of Contrarian Trading".

Sold one unit at 883.25.

Light the torches, grab your pitchfork !!

Here's my latest post on "The Art of Contrarian Trading".

Long one unit at 877.75

Guesstimates on July 13, 2009

September S&P E-mini Futures: I think the market is building a base in the 865-885 zone. Today's day session range will be 875-890. The e-minis are in the early stage of a move which will carry into the 965-80 zone.

QQQ: Support is at 34.00. The next upside target is 39.90.

TYX (thirty year bond yield): Support is at 4.20%. The next big move will be a swing upward in yield to above the 5.00% level.

TNX (ten year note yield): Support is at 3.25. I think that the next swing up is about to begin and should take the yield on the notes to 4.30%.

Euro-US Dollar: There is no sign of a top. Support is at 137.50 and I think the market will continue upward to 146.00.

Dollar-Yen: The yen has reached the 92.50 downside target and soon will begin a move up to 105.00.

August Crude: The trend in crude oil is now downward and will carry the market as least to the 55.00 level. Resistance above the market is at 65.00.

GLD – August Gold: Support at 920 was broken. I want to give this uptrend the benefit of the doubt so I will wait for weakness below 900 before I conclude that the market is headed much lower.

SLV - September Silver: Silver is headed to 1700. Support is at 1250.

Google: Support is at 395. Next upside target is 500.

High of day

Here is a five minute bar chart of e-mini day session trading. Today's range estimate is the blue rectangle. The market rallied from its open at 872.50 all the way to 880.25. This was just a shade above the midpoint of yesterday's day session range which coincided with yesterday's close (purple dotted line) - both useful resistance levels.

Then sellers entered the market (red arrows), putting in a wide range down bar on heavy volume. This looks like a decisive rejection of the 880 level and makes me believe that today's day session high has been established. I now think the market will drop to or perhaps a little below its recent low at 865.25. In my view this action is all part of a base building process which I think will be completed next week. The next big move should be upward into the 965-980 range.