Here is an hourly chart showing 24 hour trading in the e-minis. The market has bounced off the initial target near the descending red trend line around the 1100 level. It has dropped about 23 points from its high this morning made after the initial employment claims number came out. This is just a tad less that the previous biggest reaction of 25 points (blue rectangles). Today's low (thus far) is just a couple of points above the rising green dash trend line. So I think the market is going to be supported near 1075 (lower green oval) and then begin another swing upward.
The next upside target is roughly 1130 (higher green oval). That level is near the top of the rising trend channel and at the level of the June 21 high of 1129.75 (horizontal red dash line). It is also worth noting that 1127 is the midpoint of the 2007-09 bear market which dropped prices from 1587 to 666.
I think the ES is in the very early stages of an extended up move. I think this move upward will last into the first part of 2011 and carry the S&P 500 to at least the 1340 level.
5 comments:
In addition to the initial employment claims report, do you factor in the the Philadelphia Fed Index for July which hit 5.1, which is below the reading of 10.0 that had been expected by economists? The July reading is also down from the prior month reading of 8.0. And the other thing is Bernanke finasaid yesterday that it will be 5 to 6 years before we recover significantly.
Carl,
Nice blog. Channeled from Pug. What do you think of lower highs and lower lows we are having for last three months.
Thanks,R
keep in mind we rallied ~9% from the Jul 1 low through 7/13’s highs (~1100) but are now running into some tough technical levels (namely the 1100 level). A lot has been made of the fact that “good earnings are causing sell-offs”, which is true looking back over the last couple days (INTC, CSX, AA, MAR, LSTR, etc), but earnings sentiment had brightened in the last week thanks to the bullish STT/Samsung updates (both out 7/7).
The sell-on-the-news reactions seen has been more light profit taking vs. heavy long-only selling or aggressive shorting; the corporate data continues to come in strong and while there are red flags (like tech inventories, etc), investors are pleased w/earnings so far. The M&A calendar has also been more active.
O/n to now I made 28pts in ES_F but Sir,credit goes to all your teachings--So Kind You are!
Stay Safe and Sound!
Carl,
Did you catch the action in TNX and TYX today? Would love your thoughts.
Crude Oil rallied along with stocks into the close, finishing with a
small loss for the day. Natural Gas was flat in the afternoon after trading higher in the morning after the EIA Natural Gas Storage Change came in at a small build than
expected. Both Gold & Copper were stagnant during the afternoon and ended theday with small gains..
GoodNight,Sir.
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