Friday, September 20, 2013

Guesstimates on September 20, 2013

December S&P E-mini Futures: Today’s day session range estimate for the December contract is 1707-1718. The ES, the Dow and the advance-decline line are all trading above their 50 day moving averages. The trend is definitely upward and is likely to carry the ES to 1775 or higher during the next couple of months
QQQ:  Upside target is 86.
TNX (ten year note yield): I think the market will move to 3.50% over the next few months.
Euro-US Dollar: The Euro is headed for 1.4000.
Dollar-Yen: The dollar-yen is headed for 107.00.
November Crude:  As long as crude holds its 50 day moving average at 105.03 I will stick with my 123 upside target.
December Gold:  The market is now headed below 1200.
December Silver: The market is now headed for 15.00.
Google: Support is at 800 and I think the next step up will carry GOOG to 975.
Apple:  The 460 support level was broken decisively but the midpoint of the rally to 513 stands at 450. A close below 450 would mean that AAPL is headed below 385. In the meantime I will maintain my bullish stance.


Kelly Blaine said...

Stanley Druckenmiller (perhaps greatest investor ever and still active) did another interview on CNBC yesterday morning. He suggested QE is the the largest 'theft' from middle and lower class in US history, furthermore, he made 2 predictions.1. Asset prices would re-price to below pre QE2 levels.
2. When QE ends, we will very likely see a market with 'no bids' under it. In laymans terms, this would likely mean a GAP DOWN as much as 20 - 30%.

Carl Futia said...

Druckenmiller is talking his book. He has been saying the same thing for at least two years now. He must have been way underinvested during the 65% rally over the past two years.

QE has generated jobs for the middle class and is raising interest rates so they can earn something on the money they save. The idea that this is theft is does not pass the laugh test.

pb said...

Another alternate view of QE from Zerohedge
What Ben Bernanke did by not Tapering was expose the fragility of the US economy for all to see. His actions, Mises Institute's Peter Klein explains in this brief clip, based on the premise that the US economy was not capable of sustaining any reduction in the $85 billion per month stimulus free-money, means once again "the economy is so dependent on artificial stimulation from the central bank... that the economy is in another artificial boom just like the artificial boom we have been trying to get out of." Critically, for all those proclaiming the US as a "cleanest shirt," Bernanke proved them wrong (and exposed the fallacy of data such as the unemployment rate and jobless claims as having any value - as we have explained). In conclusion, Klein notes "any signs of economic growth or progress that we have experienced since 2008 are solely the result of government stimulus; in other words, more malinvestment." This will not end well.

Carl Futia said...

Let me get this straight. You think 7.3% unemployment is an economic boom?

And in what sense is it artificial? Employment is increasing - real jobs. GDP is increasing, not because of more government spending but because private sector output is rising.

All the Fed is doing is convincing more and more people that it has their back and won't let another 2008-09 happen.

QE is principally a confidence boosting program. Since all real investment decisions depend on private sector confidence about future economic growth (animal spirits as Keynes put it) QE is increasing growth now because business people are slowly but surely letting to of their fears about the future.

And just where is current real investment being misdirected?

pb said...


The real unemployment number are approximately 25%. The Government does not count people that have given up on looking for work.

If the economy is so great why does the market sell off everytime that tapering is mentioned.

Carl Futia said...

I didn't say and don't think the economy is doing well any absolute standard - but the Zero Hedge quote you posted asserted just that (in the fifth line from the top of the quote) when it referred to the current economic boom. Which is it?

All I claim is that the economy is slowly improving and that this is a direct consequence of the Fed's determination to boost asset prices and bolster confidence.

The market sells off every time tapering is mentioned because investors fear the Fed is going to be content with the current 7.3% or 25% unemployment rate - an entirely reasonable reaction to the prospect of lower economic growth or even stagnation.