Guesstimates on October 29, 2010

December S&P E-mini Futures: Today's range estimate is 1174-86. I believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Guesstimates on October 28, 2010

December S&P E-mini Futures: Today's range estimate is 1182-95. I believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

interest rates are headed up

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

Update

Here is an hourly chart showing 24 hour e-mini trading. Yesterday I thought that the market was headed up to 1200 from its early 1174 low. But instead sellers took control of the market overnight and today the ES has dropped as low as 1168.25 so far.

This drop from the 1193 high looks like another normal reaction in the uptrend from the late August low at 1037. There have been several corrections of 25-30 points since then. The 1165 level is support because there the ES would match the size of its last drop (blue rectangles) and reach the lower boundary of the trend channel I have drawn.

I expect the market to make a low in the green oval target zone and then begin a swing up to 1200.

Guesstimates on October 27, 2010

December S&P E-mini Futures: Today's range estimate is 1174-1189. I believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

trend still up

Here is an hourly bar chart showing 24 hour e-mini trading. As you can see yesterday's high fell short of my 1200 target at the top of the red trend channel, but today's low at 1174 (and I do think this is the low of the drop from yesterday's 1193 high) did not reach the low of the channel either.

This makes me suspect that a new, steeper channel is in the making and I have drawn it in green on this chart. If I am right the market will rally to the green oval, the confluence of the upper channel lines and the April 2010 top at 1216 (red dash line). This upside target is the 1210-16 zone.

I still think that the ES is headed for 1300 and higher by April 2011.

Guesstimates on October 26, 2010

December S&P E-mini Futures: Today's range estimate is 1175-1189. I believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Guesstimates on October 25, 2010.

December S&P E-mini Futures: Today's range estimate is 1181-95. I believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

headed higher

Here is an hourly bar chart showing 24 hour trading in the e-minis. I think the market is in the process of breaking out from its 1155-1182 trading range to the upside. There were three tops in the 1180-82 zone and the first peek above that zone yesterday attracted sellers who pushed the market back down to 1167.

I think the market is headed back up today and within a day or two should reach the 1200 level (green oval). That level is at the top of the trend channel I have drawn. Note also that the move up from 1155 on Tuesday to 1186 yesterday was 31 points (first blue rectangle). A 31 point rally from yesterday's low at 1167 would carry the ES to 1198 (second blue rectangle).

Once the 1198-1200 target zone is reached I think a reaction back down to the support at those three tops (green dash line) will become likely. But once the reaction is complete the market should embark on its breakout move to over the April top at 1216.

Guesstimates on October 22, 2010

December S&P E-mini Futures: Today's range estimate is 1174-89. I believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Headed higher

Here is an hourly bar chart showing 24 hour e-mini trading.

The drop this past Tuesday to 1155 was a shakeout (red arrow) - a false breakout below the 1162 support level which defined several preceding highs and lows (lower green dash line). Shakeouts usually are followed by fast, extended moves in the opposite direction. I think the ES is now headed for the top of the trend channel I have drawn (around 1200). After a drop to support (higher green dash line) I think the market will resume its move above the 1216 level of the April 2010 top.

Guesstimates on October 21, 2010

December S&P E-mini Futures: Today's range estimate is 1173-87. I now believe the ES has started a breakout move that will carry it above the April top at 1216 over the next two or three weeks.

QQQQ: Upside target at 51.00 has been reached. Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved above 140 but shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Guesstimates on October 20, 2010

December S&P E-mini Futures: Yesterday's drop below the trading range low of 1162.50 looks like a shakeout. Today's range estimate is 1163-77. I think the ES is headed into the 1185-90 zone where it will stall once more. The ES will move above 1216 over the next few weeks.

QQQQ: Upside target at 51.00 has been reached. Support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved above 140 but shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Update

Here is a one point box, five box reversal chart showing e-mini trading for the past couple of weeks.

The ES broke below the 1162.50 low of the trading range formed during the past four days on very high volume. I think the market will soon establish the low of what I envision will be a trading range extending from 1145 to 1190. The green dash lines on this chart represent my best estimates of support levels based on the principle that support during a correction is often found at the levels of temporary tops on the way up.

The trading range that is forming will build a base that will support a breakout above the April top at 1216. I expect to see the ES above 1300 by early April, 2011.

Guesstimates on October 19, 2010

December S&P E-mini Futures: Today's range estimate is 1162-76. Yesterday's brief move above the last top at 1181 looks like a terminal thrust. I think the ES will drop for a couple of days before a swing up to and above 1182 can develop. The ES will move above 1216 over the next few weeks.

QQQQ: Upside target at 51.00 has nearly been reached. support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved above 140 but shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

update

Here is a 60 minute bar chart showing 24 hour e-mini trading for the past three weeks.

The trend is still upward. The ES has been trading sideways between 1162 and 1181 for four days and I think this trading range will be broken to the upside. I suspect that before that happens the market will pay a brief visit to the lower end of the range. Then it should rally to the top of the trend channel I have drawn - about 1195-1200. Then another drop to the top of the current range and possibly to the low of the current range.

I expect a move above the April top at 1216 to develop after the next 30-40 point reaction occurs. Ultimately I think the S&P will trade well above the 1300 level by April 2011.

Guesstimates on October 18, 2010

December S&P E-mini Futures: Today's range estimate is 1168-82. From the 1185-90 zone a break of 30-40 points lasting a few trading days is likely. The ES will move above 1216 over the next few weeks.

QQQQ: Upside target at 51.00 has nearly been reached. support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved above 140 but shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Guesstimates on October 15, 2010

December S&P E-mini Futures: Today's range estimate is 1174-87. From the 1185-90 zone a break of 30-40 points lasting a few trading days is likely. The ES will move above 1216 over the next few weeks.

QQQQ: Upside target at 51.00 has nearly been reached. support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved above 140 but shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

A word about the dollar and the stock market

I normally don't talk about economic considerations on this blog. But the current situation calls for a few words.

Six months ago there was hope that fiscal policy - government spending - would pull the U.S. (and the world) out of the recession. At the time various Federal Reserve governors were giving speeches which indicated that the Fed would soon start contracting its balance sheet and withdraw liquidity from the U. S. and world economies.

But now it seems clear that there is no hope of any more government "stimulus" either in the U.S. or abroad. Partly for this reason the Fed Governors have started talking about adopting a price level of nominal GDP target instead of an interest rate target to guide their policies. This sort of change would mean a lot more quantitative easing ahead, liquidity injections that would continue until economic growth resumed and unemployment dropped.

More liquidity in the U.S. economy means a lower dollar and a higher - much higher- stock market. You may not agree with the Fed policy, but if it is implemented you can expect to see the dollar index at 66 (currently 77) and the S&P at 1500 (currently 1170) within the next 9 months.

Three Peaks and a Domed House - redux

I last discussed George Lindsay's Three Peaks and a Domed House formation in this previous post. Since then a new point 14 has developed. You can see how I have relabeled the formation with its new point 14 - the August 25 low - in the daily chart of the Dow above.

The schematic below the Dow chart locates the market within the entire formation. A breakout above point 7 is due soon. The top of the domed house, usually the end of the bull market, is due 7 months and 10 days after point 14. This project to roughly April 6, 2011 by my calculations. A top then would also be a little more than 2 years after the start of the bull market in March 2009. This is the time span of one of Linday's basic advances and this reinforces the expectation of a bull market top in April 2011.

The entire corrective move since April 2010 looks like a classic Lindsay middle section which we later can use to apply the Lindsay counts from the middle section. But these counts are really only useful for predicting the date of the next bear market low and can't be produced until we see where and when the bull market high is established.

Guesstimates on October 14, 2010

December S&P E-mini Futures: Today's range estimate is 1168-80. The upside target of 1175 has been reached. From these levels a break of 30-40 points lasting a few trading days should be the next development. The ES will move above 1216 over the coming months.

QQQQ: Upside target at 51.00 has nearly been reached. support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved above 140 but shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Upside target at 23.80 has been exceeded but there are no signs of a top. Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Update

Here is a 30 minute bar chart showing 24 hour trading in the e-minis. I last commented on this chart here.

The market is nearing the top of the green trend channel and should enter the green oval today or tomorrow (1181 or so). After that a drop that matches the last reaction - about 18 points (blue rectangles) should develop and find support at the confluence of the lower trend channel line and support provided by two tops near 1164 (green dash line).

I think there is reason to anticipate a bigger reaction than 18 points, though. First of all, a rally from the August 25 low at 1037 that matched the size of the initial rally off of the July 5 low at 1003 would have carried the ES to 1062, a level that so far has been exceeded by 13 points. Of even more importance is the fact that the May 13 top in the June '10 e-minis was 1074.75. Thus we have two resistance levels nearby, either one of which could easily produce a 30-40 point break.

But the technical condition is more dangerous than that. On my chart page you can see that the 5 and 10 day moving averages of advancing issues are both showing bearish divergences for the move up from the August 25 low. This by itself wouldn't mean that the market is about to break, but the fact that is occurs near strong resistance makes these bearish divergences significant.

My best guess is that the first break from 1181 will be followed by a slightly higher high, perhaps 1190 or so. But I also think we are entering a sideways period that will include at least one drop of 30-40 points lasting 5-6 trading days.

Such a correction would end at moderate oversold levels on the 5 and 10 day advancing issues oscillators. It would be a prelude to a decisive move above the April top at 1216.

Guesstimates on October 13, 2010

December S&P E-mini Futures: Today's range estimate is 1167-81. The upside target of 1175 has been reached. From these levels a break of 30-40 points lasting a few trading days should be the next development. The ES will move above 1216 over the coming months.

QQQQ: Upside target at 51.00 has nearly been reached. support is at 49.00. Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved close to the top of its 135-40 target zone. There is as yet no sign of a top so I think the 143 level is easily within reach.

Dollar-Yen: Resistance above the market stands at 86.50. A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380.

SLV - December Silver: Upside target is 23.80.

Google: The 440 level is now support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on October 12, 2010

December S&P E-mini Futures: Today's range estimate is again 1147-59. Next upside target is 1175. The ES will move above 1216 over the coming months.

QQQQ: Next upside target is 51.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved close to the top of its 135-40 target zone. There is as yet no sign of a top so I think the 143 level is easily within reach.

Dollar-Yen: Resistance above the market stands at 86.50. A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380.

SLV - December Silver: Upside target is 23.80.

Google: The 440 level is now support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on October 11, 2010

December S&P E-mini Futures: Today's range estimate is again 1157-67. The break below yesterday's low looks like a shakeout preceding a strong rally. Next upside target is 1175. The ES will move above 1216 over the coming months.

QQQQ: Next upside target is 51.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved close to the top of its 135-40 target zone. There is as yet no sign of a top so I think the 143 level is easily within reach.

Dollar-Yen: Resistance above the market stands at 86.50. A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380.

SLV - December Silver: Upside target is 23.80.

Google: The 440 level is now support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on October 8, 2010

December S&P E-mini Futures: Today's range estimate is again 1152-66. The break below yesterday's low looks like a shakeout preceding a strong rally. Next upside target is 1175. The ES will move above 1216 over the coming months.

QQQQ: Next upside target is 51.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro has moved close to the top of its 135-40 target zone. There is as yet no sign of a top so I think the 143 level is easily within reach.

Dollar-Yen: Resistance above the market stands at 86.50. A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

November Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380.

SLV - December Silver: Upside target is 23.80.

Google: The 440 level is now support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

update

Here is a five point box, one box reversal point and figure chart showing 24 hour e-mini trading since the July 5 low at 1003. Above it you will find a daily chart of the e-minis.

The market has recently broken above the late June and early August tops, thus completing the breakout from a head and shoulders bottom formation that I first mentioned in this post.

The standard head and shoulder projection is that the rally from the right shoulder should carry as far above the neckline at 1125 as the distance from the head to the neckline. In the current situation this projects a move to 1240-50.

The point and figure chart is telling the same story. I have drawn two counts I am currently tracking (horizontal green lines). Both project that this rally will continue to 1240 or so.

The message is clear. New bull market highs lie ahead. In fact, I think that the S&P will move pretty close its 2007 top above the1500 level before the move up from the March 2009 low at 666 ends.