E-mini Update

The market has dropped as low as 1446.75 so far today and I am long from 1463. I am very confident that the 1437.25 low will hold so I shall stay long and maintain my 1438 stop. I expect tomorrow to be a generally bullish day.

Guesstimates on November 15, 8:25 am ET

Spiders - December S&P E-mini Futures: Today I will again be a buyer at 1463 using a 25 point stop. I think that Thursday’s low at 1437 in the e-minis will hold and that the market is headed for 1600 by year end.

QQQQ: The Q’s are headed for 56.00. Support is 48.85.

TLT - December Bonds: Resistance is at 114-24 and I think that the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-28 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market will probably rally to 148.50 but I think that will be it for the euro. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: The yen should soon begin a substantial rally. Support is at 109.00.

XLE - OIH - USO – December Crude: I think crude has begun a substantial drop. Initial downside target is 74.00. USO should drop to 56, OIH to 160 and XLE to 60.

GLD - December Gold: I think gold futures still have a good shot at the 873 level which is the front month high reached in 1980. Support today is at 790.

SLV - December Silver: Silver will probably reach the 1650 level. Support is at 1435.

Google: It looks like GOOG will rally to 685. Support is at 626.

Guesstimates on November 14, 8:45 am ET

Spiders - December S&P E-mini Futures: Today I will be a buyer at 1463 using a 25 point stop. The rally from yesterday’s low in the futures has already carried into the 1492-1500 zone which is resistance because of the several temporary lows which formed in that zone between October 22 and November 5. A reaction of 25-35 points would be normal at this juncture. Yesterday’s low will hold and I think the market is headed for 1600 by year end.

QQQQ: The Q’s are headed for 56.00.

TLT - December Bonds: Resistance is at 114-24 and I think that the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-28 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market will probably rally to 148.50 but I think that will be it for the euro. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: The yen should soon begin a substantial rally. Support is at 109.00.

XLE - OIH - USO – December Crude: I think crude has begun a substantial drop. Initial downside target is 74.00. USO has resistance at 77.50. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: I think gold futures still have a good shot at the 873 level which is the front month high reached in 1980. Support today is at 790.

SLV - December Silver: Silver will probably reach the 1650 level before any stall develops. Support today is at 1435.

Google: It looks like GOOG will rally to 685. Support is at 626.

Advancing Issues

Here is a daily line chart of the number of issues traded on the New York Stock Exchange which advance in price (black line) and the 5 day moving average of this number (purple line). I last commented on this indicator here.

Notice the bullish divergence shown by the 5 day moving average and by the daily numbers during the past three days. Neither made new lows when the market averages did. Since the 10 and 20 day moving averages of the advancing issues number are both well into oversold territory and since this morning's low was above the mid-August low I conclude that the drop from the October 11 high is over.

Note that today's daily count of the number of advancing issues is higher than any of the past two months. I think this means that today's "outside day" is the kick-off for an extended advance which will carry the cash S&P above the 1600 level.

E-mini Update

For the first time in a week the market has traded above a previous day's high. I think the low at 1437.25 which was reached late yesterday will hold and that this initial rally will carry up into the 1485-90 range. From there I would expect a break of about 25 points or so. I have canceled my orders and will be looking to be a buyer after this expected reaction develops.

Guesstimates on November 13, 8:20 am ET

Spiders - December S&P E-mini Futures: Today I will be a buyer at 1443 using a 25 point stop. I think the next rally will send the market initially to 1495 and to 1600 by the end of the year.

QQQQ: Support in the Q’s is at 49.00 and the next upside target is 56.00.

TLT - December Bonds: Resistance is at 114-24 and the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-28 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market has reached resistance near 147.50 but the trend is still upward. Support is now at 143.90. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: The yen should soon begin a substantial rally.

XLE - OIH - USO – December Crude: The magic 100.00 level is nearby and I think it will trigger enough selling to send crude back down to 75.00. USO has resistance at 77.50. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: Gold has traded at 848 and is in the midst of a “parabolic” upward phase which will end without any warning. The first danger point is the 873 front month high of 1980. Support today is at 790.

SLV - December Silver: Silver will probably reach the 1650 level before any stall develops. Support today is at 1435.

Google: It looks like GOOG will now rally to 685. Support is at 626.

E-mini Update

I have just canceled all my orders in the e-minis. I expect to be a buyer tomorrow but want to wait for the early morning trading before I decide where to place my orders.

We have seen four consecutive days with lower highs and this makes me believe that the market will drop at least to 1440 before it can start a big rally.

Guesstimates on November 12, 8:20 am ET

Spiders - December S&P E-mini Futures: Today I will be a buyer at 1441 using a 25 point stop. I think the next rally will send the market initially to 1495 and to 1600 by the end of the year.

QQQQ: Support in the Q’s is at 49.00 and the next upside target is 56.00.

TLT - December Bonds: Resistance is at 114-24 and the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-28 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market has reached resistance near 147.50 but the trend is still upward. Support is now at 143.90. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: The yen has reached support at 109.50 and will probably drop a little more to 108.80 before a substantial up move starts.

XLE - OIH - USO – December Crude: The magic 100.00 level is nearby and I think it will trigger enough selling to send crude back down to 75.00. USO has resistance at 77.50. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: Gold has traded at 848 and is in the midst of a “parabolic” upward phase which will end without any warning. The first danger point is the 873 front month high of 1980. Support today is at 810.

SLV - December Silver: Silver will probably reach the 1650 level before any stall develops. Support today is at 1490.

Google: It looks like GOOG will continue down to 640 before a rally begins.

E-mini Update

Not much has happened today. In particular my buy orders haven't been filled. I have just canceled all my orders and will again try to be a buyer on Monday.

Guesstimates on November 12, 8:20 am ET

Spiders - December S&P E-mini Futures: Yesterday the e-mini futures dropped well below what I thought would be a strong support zone of 1470-80. This morning the market is again trading below that range so I suspect yesterday’s 1454 low will not hold. Today I will be a buyer at 1448 ( Spiders: 144.30) using a 25 point stop. I believe that a move to new bull market highs is about to begin.

QQQQ: Support in the Q’s is at 50.00 and the next upside target is 56.00.

TLT - December Bonds: Resistance is at 114-24 and the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-28 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market has reached resistance near 147.50 but the trend is still upward. Support is now at 143.90. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: Support at 112.40 was broken this morning so I think the yen will drop to 109.50 before a big rally can begin.

XLE - OIH - USO – December Crude: The magic 100.00 is nearby and I think it will trigger enough selling to send crude back down to 75.00. USO has resistance at 77.50. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: Gold has traded at 848 and is in the midst of a “parabolic” upward phase which will end without any warning. The first danger point is the 873 front month high of 1980.

SLV - December Silver: Silver will probably reach the 1650 level before any stall develops.

Google: Support is at 665.

E-mini Afternoon Update

I just go out of my 1474 long at 1473 and canceled my stop order. This trade illustrates why I use wide stops. The market went against me much more than I expected but still my stop was not hit and I had a chance to get out with a small loss on the subsequent rally.

I expect to be a buyer again tomorrow.

E-mini Update

The market traded 1472 a minute ago but I didn't get filled so I went long at 1474. I still am using a 1452 stop.

Trifecta from the New York Times

Here is an image of today's front page of The New York Times.

It is very unusual for the stock market or any other market to achieve headline status in a major metropolitan newspaper, especially the NYT. This headline hits the trifecta. It says that the stock market is sinking as is the US dollar. It attributes this in part to the fact that oil prices are at record highs (unadjusted for inflation) and that the housing market is in trouble (I guess that's four, not just three markets covered in one headline!)

I think this means that the stock market is at a low as is the dollar. Moreover, it suggests that oil prices are near the end of their run up and that the housing market as well and the financial sector has seen the worst.

Guesstimates on November 8, 8:15 am ET

Spiders - December S&P E-mini Futures: The e-mini futures dropped as low as 1466.75 after yesterday’s regular hours trading session. This morning the market has rallied to 1491. Today I will be a buyer during regular hours trading at 1472 or lower (Spiders 146.70) using a 20 point stop. For the moment I have no profit taking target but I do think the drop from 1587 in the futures (157.52 in the Spiders) is ending and that a move to new bull market highs is about to start.

QQQQ: Support in the Q’s is at 52.50 and the next upside target is 56.00.

TLT - December Bonds: Resistance is at 114-24 and the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-12 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market has reached resistance near 147.50 but the trend is still upward. Support is now at 143.90. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: I think the 112.40 level will hold. Looking ahead several months I expect to see the 130 level during the next 12 months.

XLE - OIH - USO – December Crude: The magic 100.00 is nearby and I think it will trigger enough selling to send crude back down to 75.00. USO has resistance at 77.50. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: Gold has traded at 848 and is in the midst of a “parabolic” upward phase which will end without any warning. The first danger point is the 873 front month high of 1980.

SLV - December Silver: Silver will probably reach the 1650 level before any stall develops.

Google: Support is at 710 and the next upside target is 760.

E-mini Update

The last hour of regular hours trading will begin in 10 minutes. My buy order at 1477 still has not been reached, and I wouldn't want to fade late day weakness today. I have canceled all my orders and will try to be a buyer tomorrow.

US Dollar

Here is a point and figure chart of the US Dollar Index. I last commented on the dollar here.

As you know I have been bullish on the dollar and wrong (so far). But the bearish consensus on the dollar is so overwhelming that I am determined to stick with my view even if I go down with the ship.

I do think that the dollar has pretty much exhausted its potential for the down leg which began from the 92 top which was established in December 2005. The market has dropped almost 2 years and about 18% from there. Moreover, the point and figure count across the top formation which I have illustrated here projects a low at 75.00, a level which was nearly hit today. I think we shall soon see the start of a multi-month rally which will carry the index at least up to the 85 level.

Oil and the Stock Market

Here is a link to Mark Hulbert's latest piece on MarketWatch.com.

Hulbert makes the following thought- provoking observation, one that is new to me: "The nearly universal consensus among the nearly 200 newsletters monitored by the Hulbert Financial Digest, as well as from investment-oriented blogs I read: Stock investors are in denial right now. Investors in the oil market, in contrast, are on solid ground." By this Hulbert means that the advisory and blogging community think the stock market is about to head much lower, while the record oil prices we are seeing just reflect solid supply-demand fundamentals, and that oil is headed higher.

I think this is a particularly interesting observation in light of market action. Oil, gold, and silver have been accelerating upward in what appears to be a parabolic rise. Such rallies can be very profitable for the longs but the problem is that they end without warning and are followed by a very bad drop. Along these lines I want to mention a couple of price levels that I think will prove to be signficant.

The first is the magic $100 per barrel mark in crude. I never believed we would see this level but I was wrong. However, I am willing to bet that the market will take just a peek above $100 and then collapse, probably all the way down to $75. I think $100 per barrel will attract many sellers and will scare off many buyers. Once the market starts downward few people will be willing to step in front of it.

The second interesting level is $850 in spot gold and $873 in December gold. These were the top prices in spot and in the front month contract at the January 1980 top in gold which was followed by a 19 year bear market all the way down to $252. I think the market will take a peek above these levels and then have a big break.

The stock market is interesting for a different reason. Over the past three months it has been battered by lots of bad news from the mortgage and credit markets. Yet it is still trading well above the level of its August 16 low (1370 in the cash S&P and 12,518 in the Dow industrials) and only about 5% below its peak level (so far) reached on October 11 at 1576 in the S&P and at 14,198 in the Dow. This resilience in the face of bad news is a sure sign that the stock market is headed much higher.

Guesstimates on November 7, 8:30 am ET

Spiders - December S&P E-mini Futures: The e-mini futures are still trading in a 1495-1520 range despite yesterday’s brief move above 1520. I want to be a buyer but I am lowering my order to 1477 with a 15 point stop (147.00 in the Spiders) because the extensive sideways action of the past three days has enticed many long positions which will exit on a break below 1494. I think the rally from the 1470-80 range will carry the market to new bull market highs.

QQQQ: Support in the Q’s is at 53.30 and the next upside target is 56.00.

TLT - December Bonds: Resistance is at 114-24 and the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-12 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: The market has reached resistance near 147.50 but the trend is still upward. Support is now at 143.90. My best guess is that the market will soon stall and then begin a multi-month drop.

Dollar-Yen: Support in the yen at 113.80 was broken this morning but I think there is a good chance that the 112.40 level will hold. Looking ahead several months I expect to see the 130 level during the next 12 months.

XLE - OIH - USO – December Crude: Crude has reached the 96.50 target. The magic 100.00 is close and I think it will trigger enough selling to send crude back down to 75.00. USO has resistance at 77.50. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: Gold has traded at 848 this morning and the market has entered a “parabolic” upward phase which will end without any warning. The first danger point is the 873 front month high of 1980.

SLV - December Silver: Silver will probably reach the 1650 level before any stall develops.

Google: Support is at 710 and the next upside target is 760.

E-mini Update

There is only a little more than an hour to go in regular hours trading and not much has happened yet today. I have just canceled my e-mini orders and will try to be a buyer tomorrow.

Guesstimates on November 6, 8:30 am ET

Spiders - December S&P E-mini Futures: The e-mini futures are still buy at 1488 (Spiders at 148.00) using a 15 point stop. The market is trading in a 1495-1520 range and I suspect that the breakout from this range will be a brief downside shakeout. If I am wrong I will have to chase the market upward because I think the next big rally will carry to new bull market highs.

QQQQ: Support in the Q’s is at 53.30 and the next upside target is 56.00.

TLT - December Bonds: The market rallied strongly in response to the stock market break but I think the rally will stop at 114-18 and that the next big swing will be a drop to 110 and below. TLT is headed for 85 once this rally is over.

December 10 Year Notes: Resistance is at 111-12 and the next big swing should be downward to 108 or lower. The notes are on the way down to 108-00 and probably lower.

Euro-US Dollar: Support beneath the market stands at 142.50. The historical high in the euro is 145.75 which was reached in 1992. My best guess is that the market will reach resistance at 147.50 and that this will be followed by a multi-month drop.

Dollar-Yen: Support in the yen is at 113.80. Looking ahead several months I expect to see the 130 level during the next 12 months.

XLE - OIH - USO – December Crude: Crude has nearly reached the 96.50 target. Short term support is at 91.00. USO has resistance at 73.00. The 200-205 target for OIH has been reached and I think the next big move will be downward. The 80 target for XLE was not reached but I don’t think the market will make it there now.

GLD - December Gold: Gold will probably rally into the 830-870 range before a significant break develops. The 1980 front month top was 873. Meantime support stands at 785.

SLV - December Silver: Silver has reached 1500 but the trend is still upward and should carry the market at least to 1565.

Google: GOOG nearly reached the 735 target yesterday. Support is at 700 and the next upside target is 760.