Friday, January 29, 2010

Guesstimates on January 29, 2010

March S&P E-mini Futures: Today's range estimate is 1074-1094. The electronic low early this morning was 1070.50. There is still a 50-50 chance that the market will hit 1060 before a sustained rally starts, but I am expecting the correction to end today or Monday. I also expect to see the ES trade up above 1200 during the next couple of months.

QQQ: This corrective phase should be followed by a rally to 50.00.

TYX (thirty year bond yield): I think this market is headed for 5.00%.

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

Euro-US Dollar: Resistance above the market is at 144.00. Support is at 137.50. Looking further ahead I think that a drop to 125 is likely over the coming months.

Dollar-Yen: A rally to 100.00 is underway. Support is at 90.00.

March Crude: I think the market is headed for 50.00.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months. Resistance above the market is at 1170. Any strength above that level would mean that the market is instead headed for 1250.

SLV - March Silver: I now think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is at 19.40.

Google: Support is at 545. The next significant move should take GOOG above 700.

26 comments:

jeff said...

Carl

the top is in and to put my Mendy where my mouth is, if we make new highs, I'll give 500 dollars

if not, you give me 500

khoekz said...

Jeff,

Can I get in on this action? I'll gladly take your money. I bet within 6 months we will see new highs, with ease.

I have my $500 ready and waiting.

Kishore said...

Is n't the market itself enough of a casino?

Kishore said...

It looks like we are heading for 1098 on ES, as high for the day.

TAE said...

You guys are trashing the argument that there is only a loose relationship between trading and gambling! I hope my wife doesn't see this!

jeff said...

You're on

i also bet we don't above1130

Kishore said...

We have broken the downward trendline on the 30 minute chart.

Is this the beginning of a big rally from here on?

But how about a retest of the RTH low at 1074??

Laurence said...

Google support at $545? Closed at 535 yesterday.

Kishore said...

Market action is totally mind-boggling. It does not care for good news. It does not even care for the market breadth, which is at a respectable ADV/DECL of 1920/970. What a casino!

John said...

USD just driving this market into the ground...carry trade getting crushed...

jeff said...

in total agreement that we see a rally in the ensuing days.

personally, i'm looking for a classic 'ABC' retracement that is almost random. i expect this choppy trade to the upside to last for a week or so. But net-net, I'm looking for us to go no higher than around 1130. Anything material above that point that has any volume behind it will have me eating 'crow'.

Kishore said...

John, but Open Short Interest on $DXY is increasing just as fast as the dollar index itself. Some people are still shorting it.

It looks like no one is afraid of getting killed no more.

It appears that when our money in the bank earns zero interest, our risk threshold becomes infinity, leading to bankruptcy. Bernanke is "smart"!

Kishore said...

We are witnessing a pounce on every little bounce. Not a good sign!

dcatlowpj said...

I read a ton and there is considerable confusion on the Elliott forums, and the other theoretical columns. Let price action rule. For those of you who want to know about it: Al Brooks.

Clean 5 minute chart, no distractions, simple 22 EMA line, and little micro-trend lines.

Win said...

Carl,

I am long PMs for a bounce (SLV circa $15.9), along with the market. I agree that it's coming soon. The Russell got out of its rut (pun intended) yesterday, and I think the rest of the market will on Monday.

Win said...

Buying QQQQ calls here at $42.9. Bottom of $1.30 box from circa $44.20. Wish me luck!

Smarty Pants said...

Hi
Can someone tell me how Carl arrives at 1060 as a possible bottom or S/R or whatever?
Thanks a bunch

TA.Stockman said...

Jeff and khoekz:

You two forgot one key ingredient...
time-frame.

I think Jeff will lose this bet, 100%. The market is bound to hit new highs sooner or later. It may reach new lows, but that's not the bet, now is it? ;)

Wags94596 said...

The market ended Wave 4 after the first hour of trading and then started Wave 5.

Inside of Wave 5, we completed 3 subwaves today and should see the low for this ENTIRE sequence sometime on Monday.

Win said...

Sorry to litter your comment section today, Carl. I just redrew boxes on the Qs; they're $2 boxes, and 42.7 is the bottom of the one we're currently in. Thank you so much for all you do. I hope to be contributing more, as I make more. You're the man!

jeff said...

Stockman - I also believe this market will break the March 2009 lows before it even considers a move up to old highs.

I know Carl is very knowledgeable, but does not like subscribe to Elliott Wave Theory, but as part of Grand Supercycle Wave IV Count, last year's upside is simply a bear market rally in the grand scheme of things. When you look out on the weekly charts, Grand Supecycle III ended in 2007 and has formed an ABC count. Supercyle A went from 2000-2002, Supercyle B went from 2003-2007 and Supercyle C started in late 2007. And within Supercyle C, there will also be a sub ABC wave formation. Sub wave A down(2007-March 2009), Subwave B up(March 2009-January 2010) and now C wave down, which will ultimately end this Supercyle C and Grand Supercyle IV before we are off to new all-time highs sometime after 2020..

To help confirm to me that Wave C has started, I look at the intermediate term indicators and there are huge bearish indicators. As such, I think this dip is completely different than all of the other dips we saw in the market since March. Contrary to Carl's optimism for 1200+ on the S&P within the next couple months, I had the following contrarian indictors:

1. Weekly MACD has rolled over
2. Slow Stochastic has rolled over (when this breaks 80 on the way down, the fall will intensify)
3. The 1150 mark represented the third line from the 2007 S&P highs (1576 in October 2007 and 1440 in May 2008) and what a coincidence it has now just rolled over.
4. The market has continued to rise on lower volume and fewer and fewer stocks making higher highs (see item#1). This is a classic sign of a tired market.
5. Bernanke was recently made Time Man of the Year. Carl can attest this is a classic contrarian indicator he has reached his peak of his career.
6. The Dumb Money index reached an almost 80% reading, meaning all of the Dumb Money was 'all in' long.
7. In November 2009, the Bearish investors intelligence indicator reached the low teens (this has only happened a few times in many years), meaning there is no one else to cover.
8. The market is falling on 'good' earnings reports'. Compare this to the times when the market rallied on 'bad' earnings'.
9. The Euro and Oil peaked in late November. These are classic leading indicators of the S&P as I have mention many times on Carl’s blog. .
10. The dollar bottomed in November 2009 and has started to rise. This is considered a safe-haven and compared to all other world currencies, is still the choice of investors. And we all know when the dollar is going up, indices are going down.
10. Many other foreign exchanges (i.e. DAX, FTSE) hit their respective 50 month moving averages (prominent resistance) and have started to fall over.

Elliott Wave is looking for the S&P to hit 100 in the next couple years. Personally, I’m looking for the index to 470, which would complete a very large “M” formation on the monthly charts that dates back to 1995. Regardless, I have just started my short index trades and will slowly add more and in the months ahead.

RBharol said...

Carl,
Can you please point me to where I can learn to draw these boxes and what do they mean?


regards

Pelican said...

hi guys,
remember tomorrow is full moon.. just google the "moon cycle phase human emotion mood" and you will understand what is going on today... next week is critical for the bulls.. if bulls cannot muster strength after the full moon then get ready to reverse the trade. just my 2cents

Win said...

Pelican,

Good man. I have been watching that as well, one reason I went long here.

Dave Narby said...

@ Jeff,

I think you are right. I wish you would start a blog with your thoughts somewhere.

@ Carl,

I respect your trading (I kinda have to, you've been ruling the market since March!) but I wonder what have to say about Jeff's points, and also where the money the market needs to go higher is going to come from.

Market Karma said...

Both Jan 11th and Jan 28-29 have cyclical significance. But I do think the markets will move much higher this week from a Jan 29 - Feb 1st low. Also, for THE major cyclical top, the most prominent spike does not exist until year 2011 which i will post as we near the date. And I do think the US dollar as per the DXY index has reached significant resistance near 79.50. -MK