Tuesday, December 22, 2009

Guesstimates on December 22, 2009

March S&P E-mini Futures: Today's range estimate for the March contract is 1102-1116. The market remains stuck in a trading range between 1080 and 1115. I still think a visit to the low end of this range, possibly as low a s 1075, is likely before an upside breakout can develop.

QQQ: Upside target is 47.50.

TYX (thirty year bond yield): I think this market has begun a move to 5.00%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.30%.

Euro-US Dollar: A drop to 140 is underway.

Dollar-Yen: The drop below the 87.00 level is starting to look like a false breakout. A move above 91 will mean that continuation up to 100 is likely.

January Crude: I think that crude is headed down to 50.00. Resistance is still at 75.00.

GLD – February Gold: Gold closed below 1100 support yesterday. This means the trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - March Silver: I now think silver has started a down move that will carry it to 10.00 over the next few months.

Google: Support is now at 565. This step upward will carry to 610.


me said...

It's heading toward and sustains at 1120's in two more days and then a small pullback and then it goes to 1140's.

Reza said...


do u have any thoughts about IYR

George said...

Carl, I would like your opinion on this interpretation of the recent decoupling of the dollar and equity:

The dollar is rallying but the market is up. That can imply the borrowers (short the dollar) do not care to pay it back by selling equity because they think the rally is temporary. A contrarian would find that longer term bullish for the dollar.

Do you believe that is a valid assessment? I don't know how "sophisticated" carry-traders are supposed to be.

Kishore said...

George, contrarians are right only at the turning points, when the sentiment is extreme. For the rest of the time, they are wrong.

kleenup2 said...

George the whole "carry trade" and dollar correlation theory has never held water. The fallacy that the rally has been fueled primarily by dollar weakness has been widespread. If that were true why has virtually every stock market also gone up in lockstep. For the currency correlation to past muster shouldn't the Japanese market or Eurozone markets have been declining as their currencies appreciated? Stop watching CNBC...your account balance will thank you for it. Secondly what would lead anyone to believe that carry traders then put the money into the US market as opposed to any number of other investment vehicles? Correlation and causation are vastly different things.

Kishore said...

kleenup2, well said!

The direct relationaship between bonds and the stock market should be more valid. Bonds are crashing. By going up stock market is currently diverging from the bond market.

The stock market should pull down to comply with the bond market as a tail can not possibly, for long, wag the much larger dog of the bond market.

Moreover, the biggest danger to the stock market is from debt defaults. The current level of debt can not be sustained or be without ill effects for long.

Kishore said...

The stock market is the smallest of the three market, i.e. stock, bond and currencies.

The ES Futures contracts give a lot of leverage to manipulation of the stock market.

The Book Trader on the ES contract provides evidence of the manipulation at critical support levels and at critical times.

Only very deep pocketed manipulators can provide the ghastly number of bids at those critical support levels and times. The bulls are really scared of a crash!

Adsense said...

the de coupling of the dollar could be explained as foreing money coming into the usa which would be short to medium term bullish stocks , higher intrest rates usually are bullish the stock market not bearish .
look at a simple moving average of intrest rates overlayed on the dow and you will see what im talking about