sold one unit at 1164.25

Long one unit at 1166.25

The Sweet Spot

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

Day's low is in

This morning two pieces of news hit the market. At 8:15 am the ADP employment report came out and knocked the ES down from 1169 to 1163. The market then rallied until the Chicago Purchasing Managers report was released to subscribers at 9:40 am. This news knocked the ES down from 1167 to 1161. Yet 45 minutes later the e-minis have rallied to 1168, a new high for the pit session today.

I think this is a very bullish response to negative news. It is telling me that the day's low point has been established. I think the up swing that has begun today will carry to 1185, but that the best part of the move may not start until next week - Friday is a holiday in the US and trading has been narrow and dull all week.

Guesstimates on March 31, 2010

June S&P E-mini Futures: Today's range estimate is 1155 - 1166. The market is still stuck in a 20 point trading range but I think a strong move upward will begin soon. The ES should reach 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

Here is a 30 minute bar chart showing e-mini day session trading. I thought the market was going to move to new highs today but instead sellers came in just below the last top. The question now is just how far will this drop go.

Since the ES has established a lower top the normal expectation would be that a lower low will follow. The normal target then would be the lower green oval in the 1150-55 zone which lies on the lower line of the descending trend channel I have drawn.

The only fly in the ointment is the fact that trading activity has been quite low this week due to the Passover holiday yesterday and Good Friday (the US markets will be closed this Friday). So there is a one in three chance that the drop from today's high will end at a higher low instead. This higher low would occur near 1161 and the lower boundary of the rising trend channel I have drawn.

In either event I do think a strong rally is about to begin. The initial upside target will be 1185 but I expect to see the ES trade above 1200 in April, probably to 1225.

sold both units at 1168.50

Guesstimates on March 30, 2010

June S&P E-mini Futures: Today's range estimate is 1168 - 1180. I think a strong move upward has started. The ES should reach 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

I plan to carry my long position overnight. Today's range broke Friday's high and was concentrated in the upper part of Friday's range. Since Friday's low occurred at good support as depicted in this chart I take today's activity as evidence that an up swing has started. The initial upside target is 1184 and I expect the ES to have traded much higher than that by the end of April.

Long second unit at 1168.25

Long one unit at 1168.50

Guesstimates on March 29, 2010

June S&P E-mini Futures: Today's range estimate is 1163 - 1175. I think a strong move upward has started. The ES should reach 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

Here is a 30 minute bar chart showing day session e-mini trading. I think the drop from yesterday's high at 1176.50 will end late today or on Monday. I expect the low to develop somewhere in the green oval, i.e. in the 1154-56 zone. This marks the confluence of the two lower channel lines I have drawn on this chart. It is also midpoint support (purple dotted line). Finally, a reaction which ends in that zone will be only a tad bigger than the previous reaction you see on this chart.

Early next week I think a move upward will start. I expect the market to be much stronger than it has been during the past 10 days. The first step upward will probably carry to 1185. By the end of May I think the ES will have reached or exceeded the 1225 level.

Guesstimates on March 26, 2010

June S&P E-mini Futures: Today's range estimate is 1156 - 1169. I think another day or two of trading sideways or a bit downward is likely here. But I also think a strong move upward will begin next week. The ES should reach 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 is underway.

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: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

late update

Here is a 30 minute bar chart showing day session e-mini trading. The break I saw coming in my last post turned out to be bigger than I expected. I now think the market will drop to 1155-57 (red oval) before another rally can start. That target zone is the confluence of midpoint support (purple dotted line), the lower boundary of a rising trend channel, and also the level at which the current reaction would match the size of the last drop (purple boxes).

Once this break is complete I expect the market to take its next step up into the 1185-90 zone.

sold one unit at 1164.50

Long one unit at 1167.25

Update

Here is an updated version of the chart I posted yesterday. As you can see the market has nearly reached the short term target zone near 1179 (green oval) which stands at the confluence of the two upper trend channel lines. I think the next development will be a reaction of about the same size as yesterday's (purple rectangles). It should carry the e-minis down to the red oval which also rests at the confluence of the lower channel line of the steeper trend channel and support provided by the last high at 1165.50 (red dash line).

Once this reaction is complete I expect the ES to resume its rally to 1200 and above. The next step upward will probably carry to 1190.

Blank post was a keyboard mistake. Sorry!

Guesstimates on March 25, 2010

June S&P E-mini Futures: Today's range estimate is 1165 - 1176. I think a move to 1200 is underway.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Shaking out the breakout buyers

Here is a 30 minute bar chart showing day session e-mini trading. Earlier this morning I thought that the break to 1161.25 was warning that a terminal thrust (false breakout) had occurred yesterday and that a correction of 20-30 points might lie ahead. But during the last 90 minutes the market has recovered all of its earlier sharp break. This negates the false breakout warning.

But the more interesting aspect of today's action thus far is that the break to 1161.25 low looks like a shakeout of the yesterday's breakout buyers. Notice the wide range bar which dropped the market three points below the first hour low and four points below the 1165.50 breakout level (red dash oval). Then notice the immediate, steady rally back above both of those levels. This is classic shakeout behavior.

This makes me think that the day's low is in place at 1161.25. The market is likely to meander the rest of the day and will probably trade higher tomorrow. My upside target for the next two or three days is 1179 (green oval), the confluence of the two upper trend channel lines I have drawn on the chart.

Why I got out

There were two reasons. First, the e-minis didn't advance above yesterday's 1169.50 close overnight. In fact, they dropped all the way down to 1162 before rallying prior to the pit open. This behavior was a warning sign. If yesterday's high volume breakout above 1165 was the start of a bigger move the market would have immediately moved above 1170 after yesterday's close.

The second reason was the inability of the ES to move back above yesterday's close after today's pit open. The morning rally only made it to 1168.75. After it rolled over I started to suspect that yesterday's breakout was a fakeout so I got out.

What now?

The market has dropped to the low of my range estimate for today, 1161. The move down showed pretty good volume relative to recent activity, but nothing spectacular. What really concerns me is the possibility that yesterday's action was a terminal thrust (false breakout) and that a reaction of 20-30 points is underway. So right now I am thinking in terms of 1156 as today's likely low rather than 1161.

My next trade will still be on the long side, probably after a reaction down into the 1150-56 zone.

sold long unit at 1166.50

Guesstimates on March 24, 2010

June S&P E-mini Futures: Today's range estimate is 1161 - 1175. I think a move to 1200 is underway. First upside target is 1175.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Breakout imminent

Here is a 30 minute bar chart showing 24 hour trading in the e-minis. The market made a couple of attempts to break below the 1160 level this morning but both failed. This looks like a bullish rejection of 1160 and I think it portends an imminent move above the high of the second, 9 point box I have drawn on this chart. If so the market should be trading near the top of its third box sometime today or (more likely) tomorrow.

Long one unit at 1162.75

Guesstimates on March 23, 2010

June S&P E-mini Futures: Today's range estimate is 1155 - 1170. I think a move to 1200 is underway. First upside target is 1175.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Going up

Here is a 30 minute bar chart showing day session e-mini trading. I think the next phase of the rally to 1200 and above has begun.

At its low this morning the market was at the bottom of its second, 9 point box down from the 1165 high. It also was finding support at 1148, the January 11 top. What followed was a fast rally (green arrow) back into Friday's trading range (blue dash oval). This is classic shakeout behavior and I think it marks this morning's low as an important one.

The ES has entered the second of a rising stack of 9 point boxes. I think we will see the market rally into the green oval near 1175 over the next few days. That level is at the confluence of the top of the third box and the upper trend channel line I have drawn on this chart. In the mean time I think support will be found near the low of the second box in the 1155-56 range.

sold one unit at 1155.00

Long one unit at 1149.00

Guesstimates on March 22, 2010

June S&P E-mini Futures: Today's range estimate is 1145 - 1157. Overnight the e-minis dropped as low as 1146.75, just into the target zone of 1141-47 for the reaction from 1165. I expect the market to begin a move to 1200 this week.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

Here is a thirty minute bar chart showing day session e-mini trading. At the open this morning I thought the market was about to break to the upside from the top, 9 point box (top blue rectangle). But instead the ES dropped through the bottom of the box and is now trading in the middle of the second, lower, 9 point box. My best guess now is that this reaction will be 18-24 points in length. It should stop in the 1141-47 range. Once it is complete I expect the ES to resume its rally to 1200.

sold long unit at 1154.50

Long one unit at 1156.75

sold one unit at 1159.50

Long one unit at 1163.25

Guesstimates on March 19, 2010

June S&P E-mini Futures: Today's range estimate is again 1157 - 1170. I no longer think that the ES will break yesterday's low at 1156.25. The ES should reach the 1200 level by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

A little more on the downside

Here is a five minute bar chart showing day session e-mini trading. I started the day thinking that the midpoint of today's range would be higher than yesterday's, but once the market broke yesterday's low I gave up that notion. Now I think the ES is in the midst of a reaction that will be about as big as the last reaction which carried from 1152 to 1136.50 on March 12 and 15 (purple rectangle).

The downside target is the green oval, roughly the 1151-53 zone. This marks the confluence of the lower trend channel line, the purple rectangle and is also midpoint support defined by the reaction after the Fed meeting earlier this week.

Once this minor reaction is out of the way the advance to 1200 and higher will resume.

sold long unit at 1159.25

repurchased one unit at 1161.25

sold one unit at 1159.25

Long one unit at 1161.75

Guesstimates on March 18, 2010

June S&P E-mini Futures: Today's range estimate is 1156 - 1170. The ES should reach the 1200 level by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

sold long unit at 1161.50

Long one unit at 1161.50

Updated range estimate

During the past month the e-minis have rallied 80 points. Yet the market has been very quiet during this rally. Volume has been moderate and pit session volatility has been low.

I find this remarkable market behavior. Today, for instance, the ES is trading at new bull market highs. Volume has been very moderate and the market has traded in a five point range over the past two and a half hours. One thing I have learned over the years is that short term tops of any importance generally occur when trading activity is relatively high and intraday volatility is relatively high. Advances generally end with a bang, not a whimper.

So I have to conclude that the 20-30 point reaction I have been looking for is not here yet. Instead I think the ES will reach 1175 before any significant break of more than 10 points develops.

I am revising today's range estimate to 1157-1170.

Guesstimates on March 17, 2010

June S&P E-mini Futures: Today's range estimate is 1147 - 1161. The ES should reach the 1200 level by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

sold long unit at 1154.75

Repurchase one unit at 1151.25

Why I got out

I was bothered by what I saw in these two charts. The lower chart is a five minute bar chart of day session e-mini trading. You can see that this morning the market took a peek above its previous day session high at 1150. At first I thought we were seeing a high volume breakout (red dash oval and red arrow). But then the market stalled and started to drift lower - raising the real possibility that the high volume marked the end of a move, not a breakout.

Normally this alone would not shake me out of a position. But I was also worried by what I saw in the top chart. This shows the daily count of the advancing issues on the New York Stock Exchange. You can see that so far today, despite an apparent upside breakout, the number of advancing issues remains visibly lower than on previous up days. This bearish divergence at the top of a rally accompanied by potentially climactic volume near the last top sealed the deal for me. I stepped out of my position.

I still am very bullish and intend to get long again, even at a higher price if necessary. But the Fed announcement comes out at 2:15 pm New York time today and I am hoping that it will give me a chance to reestablish my long position on a break.

sold both units at 1150.75

long second unit at 1147.75

Guesstimates on March 16, 2010

June S&P E-mini Futures: Today's range estimate for the June contract is 1143 - 1158. The ES should reach the 1200 level by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

I just went long one unit because the market has been holding at the low of my range estimate of 1136-48. Yes, I know, I was looking for a break down into the 1120-30 range. BUT, the trend is up and the market has traded very quietly at the bottom of a low volume break from 1152. I just don't see much selling pressure and I don't want to be left behind by a rally just because a prediction of mine ("down to 1120-30") didn't work out.

Long one unit at 1139.25

Guesstimates on March 15, 2010

June S&P E-mini Futures: Today's range estimate for the June contract is 1136 - 1148. I think a drop into the 1120-30 zone is imminent. Looking further ahead, look for the ES to reach the 1200 level by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Worrying about you

I have noticed in some recent comments that people with little or no market experience are thinking about following my trades using ETFs or (worse) futures. DON'T DO IT. You are almost guaranteed to lose money and a lot of sleep in the effort.

Take a look at this post which was one of the very first ones I put up on this blog when I started blogging five years ago.

I don't think the trades I post on this blog will give a useful edge to amateur speculators. There are just too many ways that you can muck up your results because of emotional reactions to market movements and to the losses and (yes !) to the profits that will occur. If you have little experience speculating you should NOT be risking real money by following the trades I post on this blog.

Reaction imminent

As you know I think a 20-30 point break in the e-minis is imminent. Here's why.

The first chart above this text is a daily chart of the June e-minis. You can see that the advance from the February 5 low near 1040 neatly divides into two equal boxes (purple rectangles). Not only are these boxes the same height (72 points) but they are both 10-11 days in duration.

Today in pre-opening trading the ES hit the top of the second box at 1152 as well as the top of the green dash trend channel I have drawn. Both of these price points are just a tad above the January 11 top. These considerations all suggest that the market has hit resistance strong enough to produce a break as big as the one that separated the two boxes in this chart, i.e. a three day drop of 25-30 points.

There is other evidence that the market is getting a little tired. The second chart shows a five day moving average of the equity put-call ratio. You can see that it has just dropped to the lowest level in more than a year. This is a sign of overdone bullishness and itself is enough to suggest a break dead ahead.

The third and fourth charts show the 5 (purple line) and the 10 (red line) day moving averages of the daily count of the number of issues traded on the New York Stock Exchange that advance in price. Notice that both these oscillators are at "overbought" levels. At the very least this suggests that the pace of the advance is about to slow. The 5 day average is in fact hovering below the highest level it had attained during the current rally - this is a minor bearish divergence and itself suggest that the upcoming break will be the biggest seen in the past 5 weeks.

However, looking further ahead I think both of these advancing issues oscillators are telling a bullish story. They have both reached new highs for the rally from the February 5 low and the ES has reached a new high for the bull market which started last year. This combination means that the rally that started from the February 5 low will continue for at least a month and possibly for as much as four months. After the this brief reaction is complete I expect to see the market enter the 1200-50 range in that time frame.

Guesstimates on March 12, 2010

June S&P E-mini Futures: Today's range estimate for the June contract is 1143 - 1156. I think a drop into the 1120-30 zone is imminent. Looking further ahead, look for the ES to reach the 1200 level by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

Early this morning I thought that the market had shown its hand and was in the early stages of a 25 point break. But there was no follow through at all. Instead, after taking a peek below yesterday's low, it started to rally and made new highs for the day. Since then it has made two higher lows on my 5 minute bar chart and is holding above today's midpoint at 1138.00.

All in all it looks like the ES is preparing for a move to new rally highs (above 1143.25 in the June contract). I think we shall probably see a 1149 print. But I also think a 25 point break is imminent and is likely to start shortly after the market establishes this new rally high.

sold both units at 1137.50

Long second unit at 1139.75

long one unit at 1140.50 - going with the flow

Guesstimates on March 11, 2010

June S&P E-mini Futures: Trading activity moves to the June contract at the pit open. Today's range estimate is 1123-1139 for the June contract. I now think a 20-25 point break has started but I expect it to be brief and end near 1120. Look fort the market to reach 1200 by the end of May.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

The market has entered the target zone outlined by the green oval in this chart. But I still see no convincing evidence that a 25 point break is underway. In fact I think it is more likely that the e-minis rally as high as 1156 before such a break begins.

sold long unit at 1146.75

Long one unit at 1140.75

Guesstimates on March 10, 2010

March S&P E-mini Futures: Today's range estimate is 1136-1150. I expect the market to reach 1200 over the next three months. Remember that activity will begin to move into the June contract at tomorrow's pit opening.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

sold both units at 1143.25

Update

Here is an hourly bar chart showing day session e-mini trading. It is an updated version of the chart I last posted here.

As you can see the market is approaching the top of the third box in a stack of 36 point boxes (blue rectangles). The January 11 top was at 1148 (dash red line). The top of the green trend channel is roughly 1150 today. I think the market is about the enter the short term target zone outlined by the green oval.

Once this target zone is reached I expect the next significant development to be a break about as big as the previous break from 1112 to 1084 (purple rectangles). That should bring the ES down to the lower trend channel line too, as well as to midpoint support near 1127 (the midpoint between the 1587 high and the 666 low). Once that reaction is over I expect the market to resume its advance to 1200 or higher.

long second unit at 1138.75

Guesstimates on March 9, 2010

March S&P E-mini Futures: Today's range estimate is again 1131-1145. I expect the market to reach 1200 over the next three months.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

Quiet

The e-minis have traded in a 4 point range thus far today. The market is unusually quiet. It has been my experience that temporary tops occur when activity is relatively high, not when it is relatively low. So the market's dullness makes me think that prices have to advance further before a reaction as big as 20 points can develop. For the time being I see support in the 1131-33 range. I think we shall see the e-minis trade above 1150 during the next couple of days. This would be a breakout above the January 11 top at 1148 and should bring with it a noticeable jump in activity.

long one unit at 1138.50

Mutual fund flight

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

Guesstimates on March 8, 2010

March S&P E-mini Futures: Today's range estimate is 1131-1145. I expect the market to reach 1200 over the next three months.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months. The market has moved substantially above 1120 resistance but I expect it to stall in the 1150-60 range and then head lower. Strength above 1160 would mean that it is headed instead for 1300.

SLV - May 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 now 18.30.

Google: A move that should take GOOG above 700 is underway.

sold both units at 1137.25

long second unit at 1126.50

Guesstimates on March 5, 2010

March S&P E-mini Futures: Today's range estimate is 1126-1140. The employment number came in pretty much as expected and as I write this the market is trading about 7 points higher than yesterday's pit close. I expect the market to reach 1200 over the next three months.

QQQ: A rally to 50.00 is underway.

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: This market is now headed for support near 131.00. Resistance above the market is at 141.00. 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.

April Crude: I think the market is headed for 50.00. Resistance is in the 81-83 range.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months. The market has moved substantially above 1120 resistance but I expect it to stall in the 1150-60 range and then head lower. Strength above 1160 would mean that it is headed instead for 1300.

SLV - May 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 now 18.30.

Google: The next significant move should take GOOG above 700.