Guesstimates on May 13, 2013

June S&P E-mini Futures: Today’s range estimate is again 1624-1635. The market has moved through its long term resistance zone of 1546-87. A drop of 30-40 points is imminent but I think the 1574-1587 zone defined by the 2000 and 2007 bull market tops will now be support. I am putting aside my 10% break scenario for the time being since I see no short term technical evidence of an important top here.

QQQ:  Headed for 73.   

TNX (ten year note yield): Bond yields are going much higher as the market begins to anticipate stronger economic growth. The first upside yield target for the 10 year is 2.50%.

Euro-US Dollar: The euro is trading above its 20 day moving average and it looks like a swing to 1.40 has begun.

Dollar-Yen: I think this bull market has much further to go. The dollar-yen has been stalling beneath resistance at 100-101. Support is at 96. The next leg up should carry the market to 108 or so.

June Crude:  As long as crude does not spend much time above 100 I will stick with my view that it is headed below 70.

June Gold:  The market is back below 1465 resistance. If it stays there for the next couple of days I think gold will be on its way to the next downside target at 1200-50. In any case there is strong resistance above the market in the 1520-30 breakout zone.  

July Silver: Initial downside target is 20.00 while resistance above the market is at 27.00.  

Google: GOOG held well above support at 747, its 2007 top, during the last reaction. This is a bullish combination and makes it likely that GOOG will make it to 900 on this swing up.

Apple:  Next downside target is 350. AAPL has rallied above initial resistance at 430 and I think the rally will carry to 460.

Guesstimates on May 10, 2013

June S&P E-mini Futures: Today’s range estimate is 1624-1635. The market has moved through its long term resistance zone of 1546-87. A drop of 30-40 points is imminent but I think the 1574-1587 zone defined by the 2000 and 2007 bull market tops will now be support. I am putting aside my 10% break scenario for the time being since I see no short term technical evidence of an important top here.

QQQ:  Headed for 73.   

TNX (ten year note yield): Bond yields are going much higher as the market begins to anticipate stronger economic growth. The first upside yield target for the 10 year is 2.50%.

Euro-US Dollar: The euro is trading above its 20 day moving average and it looks like a swing to 1.40 has begun.

Dollar-Yen: I think this bull market has much further to go. The dollar-yen has been stalling beneath resistance at 100-101. Support is at 96. The next leg up should carry the market to 108 or so.

June Crude:  As long as crude does not spend much time above 100 I will stick with my view that it is headed below 70.

June Gold:  Today’s drop has put the market back below 1465 resistance. If it stays there for the next couple of days I think gold will be on its way to the next downside target at 1200-50. In any case there is strong resistance above the market in the 1520-30 breakout zone.  

July Silver: Initial downside target is 20.00 while resistance above the market is at 27.00.  

Google: GOOG held well above support at 747, its 2007 top, during the last reaction. This is a bullish combination and makes it likely that GOOG will make it to 900 on this swing up.

Apple:  Next downside target is 350. AAPL has rallied above initial resistance at 430 and I think the rally will carry to 460.

Guesstimates on May 9, 2013

June S&P E-mini Futures: Today’s range estimate is 1621-1631. The market has moved through its long term resistance zone of 1546-87. A drop of 30-40 points is imminent but I think the 1574-1587 zone defined by the 2000 and 2007 bull market tops will now be support. I am putting aside my 10% break scenario for the time being since I see no short term technical evidence of an important top here.

QQQ:  Headed for 73.   

TNX (ten year note yield): Bond yields are going much higher as the market begins to anticipate stronger economic growth. The first upside yield target for the 10 year is 2.50%.

Euro-US Dollar: The euro is trading above its 20 day moving average and it looks like a swing to 1.40 has begun.

Dollar-Yen: I think this bull market has much further to go. The dollar-yen has been stalling beneath resistance at 100-101. Support is at 96. The next leg up should carry the market to 108 or so.

June Crude:  As long as crude does not spend much time above 100 I will stick with my view that it is headed below 70.

June Gold:  The market has started to spend time above 1465 which means that it is probably headed back to breakout resistance at 1520-30. Downside target is still 1200-50.

July Silver: Initial downside target is 20.00 while resistance above the market is at 27.00.  

Google: GOOG held well above support at 747, its 2007 top, during the last reaction. This is a bullish combination and makes it likely that GOOG will make it to 900 on this swing up.

Apple:  Next downside target is 350. AAPL has rallied above initial resistance at 430 and I think the rally will carry to 460.

above resistance - still no sign of a top

Here is a daily bar chart showing the Dow industrials for the past two years.

I had expected the 2007 top at 14.279 (green line) to be strong resistance, at least strong enough to start a reaction of 10% or more. But as you can see the  Dow moved above that level, reacted back to it with a low on April 18, and has since moved above the 15,000 level. This is a sign of a very strong market, much stronger than I had expected.

Another interesting development has been the very low levels of volatility and volume which have accompanied the latest move to historical highs in this average as well as in the S&P 500. This suggests that investors are generally very skeptical that prices can move much higher than current levels.

There is still a chance that the market is currently putting in point 23 of the domed house - points 21 thru 25 often take the form of a lopsided head-and-shoulders-top (blue oval). But frankly I doubt that this is the case and even if it is there will be time to recognize it and take appropriate action.

In the meantime I expect the 14,279 level to act as support going forward. A drop back near that level would put the Dow a little below its 50 day moving average (wavy green line) which is typically a buying opportunity when the 200 day moving average (red line) is moving upwards as it is now.

How much higher might this bull market go? The first leg up carried the Dow from 6,440 in March 2009 to 12,928 in May 2011, a total of 6,488 points. Adding this to the September 2011 low at 10,808 gives a repetition target of 17,296.