Guesstimates on March 31, 2014

June S&P E-mini Futures: Today’s range estimate is 1855-70. The odds favor a rally all the way back to the March 7 top at 1880.50 and beyond.

QQQ:  Upside target is 94.

TNX (ten year note yield): I think the market will move to 3.50% over the next few months.

Euro-US Dollar: I expect this reaction to end at a higher low near 1.36.

Dollar-Yen: The dollar-yen is headed for 107.00.

May Crude:  Resistance above the market is at 103. Downside target is 92 but I think that may well be only the first stopping point in a bigger decline.

June Gold:  Support at 1310 has failed. This means that gold is headed for 1050.

May Silver: Support is at 20.00 has failed. Silver is headed for 13.00.  

Google:  Support is at 1075 and if this fails a drop to 900-950 is likely.

Apple:  A drop below its 200 day moving average, currently at 502, would be very bearish. Whether or not AAPL can make it to 600 before dropping below that moving average will depend on whether or not the trend in the general market had turned downward.

Guesstimates on March 28, 2014

June S&P E-mini Futures: Today’s range estimate is 1834-1850. If the market starts spending time above 1850 yesterday’s drop below 1841 will start looking like a shakeout. Then the odds would favor a rally all the way back to the March 7 top at 1880.50 and beyond.

QQQ:  Downside target is 83.

TNX (ten year note yield): I think the market will move to 3.50% over the next few months.

Euro-US Dollar: I expect this reaction to end at a higher low near 1.36.

Dollar-Yen: The dollar-yen is headed for 107.00.

May Crude:  Resistance above the market is at 103. Downside target is 92 but I think that may well be only the first stopping point in a bigger decline.

April Gold:  Support at 1310 has failed. This means that gold is headed for 1050.

May Silver: Support is at 20.00 has failed. Silver is headed for 13.00.  

Google:  Daily ranges in GOOG are widening to the downside. Support is at 1075 and if this fails a drop to 900-950 is likely.

Apple:  A drop below its 200 day moving average, currently at 502, would be very bearish. Whether or not AAPL can make it to 600 before dropping below that moving average will depend on whether or not the trend in the general market had turned downward.

danger

Here are some charts which illustrate why I am starting to worry that the March 7 high in the S&P and the December 31 high in the Dow may be the bull market tops ending the move up from the March 2009 low.

The top chart is an hourly bar chart of the cash S&P 500 covering the past two months. I have highlighted a clearly defined, potential head and shoulders top which has formed during the past 10 days. This morning the market started to break below the neckline (red line) and if it makes further downside progress the breakout will become very obvious. It would probably be followed by a move down below the blue line which delimits the lower boundary of the trading range which has formed this past month.

Such a breakdown would be very bearish, especially in light of the point and figure chart which is second from the top. I have illustrated with red rectangles the extent of each of the tops during the past year. You can see that the sideways movement of the past month is by far the largest of these. A move down out of this sideways period would then mean that a drop  bigger than any of the past year or two, indeed bigger than any since the 2011 drop, will be underway.

The bottom two charts also underline the bearish significance of a break below the low of the March trading range.
Both of these charts show long term bearish divergences between the Dow and the S&P (which have moved to new highs steadily over the past year) and the smoothed reading of daily new highs and of the number of stocks in the S&P 500 which are trading above their 50 day moving averages (these two indicators have not made new bull market highs). This is especially worrisome in light of the fact that the current bull market has lasted 5 years, exactly the length of the already abnormally long 2002-2007 bull market.

So far I have been talking about bearish potential. There is still a chance that this potential will not be realized and that new bull market highs lie ahead. To inform this judgement I will be watching the middle two charts which show the Dow and the S&P 500. If both of these aveages slide below their 50 day moving averages (green lines) I think the stock market's goose will have been cooked. A drop of 20% or more will probably then be in the cards.

Guesstimates on March 27, 2014

June S&P E-mini Futures: Today’s range estimate is 1832-1848. If the market starts accepting prices below 1841 today, and I think it will, the prognosis will be for a drop all the way to or below the February 5 low at 1732.  

QQQ:  Downside target is 83.

TNX (ten year note yield): I think the market will move to 3.50% over the next few months.

Euro-US Dollar: I expect this reaction to end at a higher low near 1.36.

Dollar-Yen: The dollar-yen is headed for 107.00.

May Crude:  Downside target is 92 but I think that may well be only the first stopping point in a bigger decline.

April Gold:  It looks like support at 1310 has failed. This means that gold is headed for 1050.

May Silver: It looks like support is at 20.00 has failed. Silver is headed for 13.00.  

Google:  Daily ranges in GOOG are widening to the downside. Support is at 1075 and if this fails a drop to 900-950 is likely.

Apple:  A drop below its 200 day moving average, currently at 502, would be very bearish. Whether or not AAPL can make it to 600 before dropping below that moving average will depend on whether or not the trend in the general market had turned downward.