Thursday, February 04, 2010

Low just ahead

Here is an hourly chart showing day session e-mini trading. I had thought that last Friday's low at 1066.50 would hold. But sellers came into the market in force this morning and pushed the ES below that low.

Now I think that the drop from the January high at 1148 will end near 1058, the point where it would equal the length of the 90 point drop of June-July 2009 (blue rectangle). It is worth noting that the 1062 level is the midpoint of the reaction from 1099 to 1026 in October-November 2009, while 1054 is the midpoint between the May 2008 top at 1442 and the March 2009 low at 666.

So I expect the ES to sink into the green oval later today or tomorrow on the employment number. But I also think that this is the last gasp of the corrective move downward and that a rally to 1200 will soon be underway.


PM said...

Hi Carl,

Needless to say, my buy signal will not likely be confirmed today, we need to see a close today above 1088.10 and this is not likely from the way things appear. So, my next lower level reaction point is 1054.60 (give or take a few ticks), this is not far from your "near 1058.00" mention.

If we touch 1054.60 I'm a buyer.


Kindest regards,


Anonymous said...

Look for a simple 61.8% ratio of the first leg down off the highs to get the target for this leg down... comes out to 1056 SPX.

Anonymous said...


I want to thank you for your valuable and helpful work.

Kind regards from Germany,


Bill said...

Agree with Carl.

George said...

If one were to draw the same sort of downward channel using daily bars instead, the low point is 1045 on ES. I think the market can hit it tomorrow.

jeff said...


Wave III down is underway. We should at least bounce in the morning, but the next few days are going to be ugly for the longs.

Still sticking with my 975-985 in the next week or two.

Dave Narby said...

We just violated a 13/34 EMA crossover and dropped below the 89 day EMA on the SPX.

Money markets (per Technical Take) are at the lowest levels in months.

Carl, I have asked you repeatedly where you think the money is going to come from to drive this market higher, and you haven't answered. I really want to know what you think about this.

Macro picture is worse than it was in 2007 due to unprecedented government incompetence and bankster avarice.

Unless QE v2.0 is passed, there is no money to push this market higher, the SPX is going to 1035, AT LEAST.

Longs may do OK on some day trades, but the trend has changed.


jeff said...


You haven't discussed it, but I find it interesting the direct relationship of falling oil, a falling Euro, a rising dollar, and a falling S&P.

With your expectations of oil headed down to 50, this fits perfectly with my bearish stance on equities and the demand for safe harbor instruments such as the dollar.

jeff said...

S&P down 3%
Oil down 5%
Dollar up 0.5%
Euro down 1.1%

Smarty Pants said...

I find the MACD chilling, 1030 could be in the cards befor the MACD turns$SPX&p=60&yr=0&mn=3&dy=14&id=p95922428144&a=183217720

Dave Narby said...

I would just like to add

Per - NYSE A/D ratio currently at 0.1113 - this is not a typo.

After 1025-1035, next stop is 980(!).

willyc said...


You should listen rather than speak. Your claims have been wrong for as long as I've been reading this website.

ga said...

Why exactly do you believe this market will be at 1200 in 3 months. Everything else seem to be rolling over to support more downside.

janet said...

I enjoy reading everyone's differing opinions. In the counsel of many wisdom is found. (The Good book) (Bible)

PM said...

Hi Carl,

We did reach the 1054.60 level, in fact the market went even lower, I went long at 1053.00.

I will risk a few points and then dump it if this level fails to hold.


Kindest regards,


Larry said...

Gold, dollar, equities; there is a direct correlation. How can gold be projected to move to 875 while equities move north toward 1200? Hasn't worked that way in the past. Is there a new "normal" in play?

Carl Futia said...


January 1980 - gold 850, Dow 870

January 1999 - gold 285, Dow 9100