headed higher

Here is a daily bar chart of the June 2011 e-mini futures over the past year. You can see that the March 2011 low near 1241 ended a drop that was the biggest since the July 2010 low at 1002. I think the March 2011 low started a swing up which will carry the market above the 1400 level. (This is actually my conservative estimate.)

On the chart above I have highlighted two previous upswings with blue dash rectangles. The first one carried the ES up 187 points and the second one carried it up 163 points. The average is 175 points and adding that to the recent 1241 low gives a target of 1416. Notice too how the upper parallel of the trend channel I have drawn also suggests a 1416 top if the market's upward move continues at its recent pace.

In my estimate the March 2011 low saw the advancing issues oscillators (you can find them on my chart page) at their most oversold levels since the July 2010 low. The ES advanced 340 points from that low to the February 2011 top. Adding 340 points to 1241 gives an upside target of 1581. Something to think about.

Guesstimates on March 31, 2011

June S&P E-mini Futures: Today's range estimate is 1318-1328. The market is now headed for 1400 and above.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: I think 83.50 is the upside potential and this target has nearly been reached. The drop to 70.00 should resume soon.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – June Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 30, 2011

June S&P E-mini Futures: Today's range estimate is 1316-1334. The market is now headed for 1400 and above.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: I think 83.50 is the upside potential and this target has nearly been reached. The drop to 70.00 should resume soon.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 29, 2011

June S&P E-mini Futures: Today's range estimate is 1295-1308. The low at 1249 in the cash (1241.25 in June ES) ended the drop from the February top. The market is now headed for 1400 and above.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 28, 2011

June S&P E-mini Futures: Today's range estimate is 1309-1320. The low at 1249 in the cash (1241.25 in June ES) ended the drop from the February top. The market is now headed for 1400 and above.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 25, 2011

June S&P E-mini Futures: Today's range estimate is 1303-1317. The cash S&P closed above 1305 yesterday. This means that last week's low at 1249 in the cash (1241.25 in June ES) ended the drop from the February top. The market is now headed for 1400 and above.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: Intervention by the Bank of Japan and the Fed rallied the yen to 82.00. I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 24, 2011

June S&P E-mini Futures: Today's range estimate is 1294-1311. I now think it is likely that the cash S&P close above 1305 within the next few days. Such a close would mean that the cash low of 1249 will hold and that the market is headed for new bull market highs.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: Intervention by the Bank of Japan and the Fed rallied the yen to 82.00. I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Apocalypse Now !!

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

Guesstimates on March 23, 2011

June S&P E-mini Futures: Today's range estimate is 1280-1293. I think the next development will be a drop to 1225-35 which should end the correction which began from the February top. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: Intervention by the Bank of Japan and the Fed rallied the yen to 82.00. I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

very bearish sentiment

Will the low made last week in the cash S&P 500 at 1249 hold? Has a move to new bull market highs already started?

I think there is enough bearish sentiment around to support a strong up move. Take a look at the charts above. The top three are the 5 day (red), 10 day (green), and 20 day (purple) moving averages of the equity put/call ratio for the CBOE (charts courtesy of StockCharts.com). The chart right above this post is a daily chart of the cash S&P 500.

You can see that the 5 and the 10 day moving averages are very close to last year's high points reached during the April - July drop. The 20 day moving average is not there yet but it is getting close. This is particularly bearish sentiment in light of the fact that the S&P dropped only 7 % from its high vs. the 17% drop in 2010.

One factor behind this increase in bearish sentiment is "radiation hysteria" arising from news of the Japanese earthquake and tsunami disaster. All the more reason to fade the bears.

Sending the same message is the latest reading of the AAII market sentiment survey. Last week's number showed the greatest percentage of bears since early last September when the market was just starting a 30% rally.

The only technical consideration which holds me back from being very bullish in the short run is the behavior of my advancing issues oscillators. You can find them on my chart page. There were no significant bullish divergences between the advancing issues oscillators and the S&P at 1249. Most significant bull market corrections end with significant divergences.

So, what now? As you can see from the S&P chart above this average has rallied almost as far as its 50 day moving average (wavy blue line on the chart). If the market is going to drop to 1230 as I expect we will not see any close above the 1305 level in the cash S&P. Any such close would turn me bullish and tell me that last week's cash low at 1249 will hold.

In either case I think the S&P will reach new bull market highs within the next two months.

Guesstimates on March 22, 2011

June S&P E-mini Futures: Today's range estimate is 1285-1300. I think the next development will be a drop to 1225-35 which should end the correction which began from the February top. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: Intervention by the Bank of Japan and the Fed rallied the yen to 82.00. I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

May Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimate on March 21, 2011

June S&P E-mini Futures: Today's range estimate is 1275-93. I think the next development will be a drop to 1225-35 which should end the correction which began from the February top. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: Intervention by the Bank of Japan and the Fed rallied the yen to 82.00. I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 18, 2011

June S&P E-mini Futures: Today's range estimate is 1268-88. I think the next development will be a drop to 1225-35 which should end the correction which began from the February top. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: Intervention by the Bank of Japan and the Fed rallied the yen to 82.00. I think 83.50 is the upside potential. After that the drop to 70.00 should resume.

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 17, 2011

June S&P E-mini Futures: Today's range estimate is 1255-85. I think this correction is pretty much over although a lower low near 1225 is probably in the cards after a rally of a couple of days. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

Dollar-Yen: The 78.00 - 79.00 range was reached and exceeded yesterday. I think the Fed will remain ahead of the Bank of Japan in terms of quantitative easing. I conclude that continuation downward to 70.00 is likely over the next few months.

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

nearing the low of the correction

Here is a daily bar chart showing the June e-mini contract going back to last November.

The market dropped below the low of the first parallel trend line I drew on this chart. In such circumstances I usually draw a second parallel an equal distance below the first one as I have done above. Right now this second parallel is at about 1225. I don't think the ES will drop that low, but it is worth noting that there is also support in the 1215-1225 zone defined by the April 2010 top and the November 2010 top.

The first drop from the February 18 top carried the market down 50 points. It often happens that the end of a downward correction can be predicted by multiplying the size of the first drop by a whole number or a whole number plus 1/2. In this case 100 point drop ( = 2 x 50) would end near 1238 (blue rectangles). So my target zone (green oval) is 1225-1240.

Once this correction is complete I expect to see the start of a strong rally which will carry the ES to 1400 or so.

Guesstimates on March 16, 2011

June S&P E-mini Futures: Today's range estimate is 1260-85. I think this correction is pretty much over and expect the final low this week. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 15, 2011

June S&P E-mini Futures: Today's range estimate is 1245-80. I think this correction is pretty much over and expect the final low this week. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 14, 2011

June S&P E-mini Futures: Downside target is 1270. Today's range estimate is 1280--1300. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 11, 2011

June S&P E-mini Futures: Downside target is 1270. Today's range estimate is 1274-1294. Once this correction is complete the bull market will resume.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude will continue upward to 112. Support is at 97.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Down to 1270 - then up

Here is a 30 minute bar chart showing day session trading in the June'11 e-mini futures.

I think the market is on its way down to 1270 or so (green oval). That is the current postion of the lower line of the bearish trend channel (red dash lines) you see on the chart. It is also the target price implied by a repetition of the length of the initial drop from the February 18 top (blue rectangles).

I think the the drop to 1270 will be completed next week. Once the low is in place I expect to see the start of an extended rally which will carry the e-minis to 1400 or so.

Guesstimates on March 10, 2011

June S&P E-mini Futures: I think the overnight swing downward from yesterday's close is the start of a move down to 1270 in the June contract. (June is trading 5 points below March.) Today's June contract range estimate is 1290-1305. I still think we shall see much higher prices within the next couple of months.

QQQ: I expect to see new bull market highs after the current break ends.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude has hit 104 so I think it will continue upward to 112.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

America in Decline ... (NOT!!)

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

Guesstimates on March 9, 2011

March S&P E-mini Futures: The market's short term trend direction is very uncertain. I really have no idea which end of the current 1292-1343 trading range will be broken first. Today's range estimate is 1317-1331. I still think we shall see much higher prices within the next couple of months.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude has hit 104 so I think it will continue upward to 112.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - May Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

crude oil redux

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

Guesstimates on March 8, 2011

March S&P E-mini Futures: The market's short term trend direction is very uncertain. I really have no idea which end of the current 1292-1343 trading range will be broken first. Today's range estimate is 1298-1315. I still think we shall see much higher prices within the next couple of months.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude has hit 104 so I think it will continue upward to 112.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - March Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 7, 2011

March S&P E-mini Futures: The market's short term trend direction is very uncertain. I really have no idea which end of the current 1292-1343 trading range will be broken first. Today's range estimate is 1318-30. I still think we shall see much higher prices within the next couple of months.

QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: Crude has hit 104 so I think it will continue upward to 112.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target.

SLV - March Silver: Silver has reached the 36.00 upside target but there is still no sign of a top. Next stop is 39.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 4, 2011

March S&P E-mini Futures: Today's range estimate is 1325-1340. I now expect a close above 1322.25 today. The recent 1292-1343 trading range should be resolved by an upside breakout. QQQ: I expect to see new bull market highs soon.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: The 102 price target was hit last week. The market is still resilient. A move as high as 104 would mean that continuation up to 112 is likely.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.

Guesstimates on March 3, 2011

March S&P E-mini Futures: Today's range estimate is 1313-1329. I think the market is about to drop into the 1260-70 zone but a close on Friday above 1322.25 would negate this conclusion. In any case once this reaction is complete I expect to see new highs for the bull market.

QQQ: A drop to 54.00 or so has begun, but once it is complete I expect to see new bull market highs.

TYX (thirty year bond yield): The 30 year bond yield is on its way to 5.40%.

TNX (ten year note yield): The 10 year yield is headed for 4.50%.

Euro-US Dollar: I think the euro will move up to 145.00.

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

April Crude: The 102 price target was hit last week. The market is still resilient. A move as high as 104 would mean that continuation up to 112 is likely.

GLD – April Gold: A move to new highs is underway. 1495 is the next upside target. Support is at 1315.

SLV - March Silver: Next upside target is 36.00. Support is at 25.50.

Google: The 540 level is support. A move that should take GOOG above 700 is underway.

Apple: Next upside target is 375. Support is at 310.