third update

A strong selling wave has developed. I now think we have seen a genuine breakout from the 1112-1128 trading range.

A drop about equal to the last drop would carry the market down into the 1090-95 range over the next day or two. I think this is just a normal interruption in the up trend that began from the July 5 low at 1002.75

second update

The ES couldn't hold the 1115 level. I think the market will establish its day session low today near 1104.

sold long at 1113.50

Long one unit at 1116.50

Update

The ES rallied nearly 10 points during the first 30 minutes of today's regular session. This means that 1111.25 was the low of this morning's break - itself a false breakout from this week's 1112-1128 trading range.

The market should hold above 1115 for the rest of the session and close today in the upper part of its day session range.

I am revising my estimated day session high from 1122 to 1125.

Guesstimates on August 6, 2010

September S&P E-mini Futures: The bearish employment numbers this morning send the ES down to 1111.25 as I write this. I think this will turn out to be a false breakout from the 1112-1128 trading range that was established this week. Today's range estimate is 1107-1122. The market has resumed its move to 1145-50. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on August 5, 2010

September S&P E-mini Futures: Today's range estimate is 1116-1130. The market has resumed its move to 1145-50. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

sold long at 1119.00

long one unit at 1122.00

Guesstimates on August 4, 2010

September S&P E-mini Futures: Today's range estimate is 1116-1128. The market has resumed its move to 1145-50. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Three Peaks and a Domed House

It has been more than 18 months since I last commented on George Lindsay interpretations of current stock market action. In my 2009 stock market forecast section on the three peaks and domed house formation I said:

Thus we should expect to see a major Three Peaks and a Domed House formation start to develop soon. The Domed House advance should take up the best part of 2010 and end the bull market which started from the November 2008 lows.

I think there is a clearly delineated major three peaks formation now visible in Dow industrials and in the S&P 500 as well as the Nasdaq composite. The daily chart of the Dow is at the top of this post.

I think the point 10 low that separates the three peaks from the domed house parts of the formation occurred on July 1. Point 14 occurred at the July 30 low. Lindsay theory asserts that point 23, the top of the domed house advance, should occur about 7 months and 10 days after point 14. This calculation predicts a top for the domed house advance for March 10, 2011 somewhere above the April 2010 top in the Dow.

There is one alternative, less likely scenario that is worth keeping in mind. It is conceivable that the January 6 top was point 3, not point 5. This change would make the April 26 top point 5 instead of point 7. In this alternative scenario point 7, the third peak, lies ahead of us and would probably develop a little below or a little above the April top in the Dow. The subsequent drop to point 10 in this alternative scenario would have to carry the Dow at least below its February 5 low, although not necessarily below its July 1 low.

sold longs at 1116.75

Long one unit at 1115.75

Guesstimates on August 3, 2010

September S&P E-mini Futures: Today's range estimate is 1112-1128. The market has resumed its move to 1145-50. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on August 2, 2010

September S&P E-mini Futures: Today's range estimate is 1104-1122. The market has resumed its move to 1145-50. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on July 30, 2010

September S&P E-mini Futures: Today's range estimate is 1080-1098. The market will resume its move to 1145-50 today or Monday. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – August Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Update

Here is a 30 minute bar chart showing 24 hour e-mini trading over the past week.

I thought support at 1099 would hold but in the event sellers hit the market hard and have driven the ES down to 1089 so far. I think the drop from Monday's high at 1119 is corrective and is proceeding in a stack of 18 point boxes (blue rectangles). The ES has dropped to the midpoint of the second box ( dash blue line) and I think that it will rally close to the high of this box before dropping to the low of the box near 1082. The midpoint of the rally from 1051 on July 20 to 1119 stands at 1085 (red dash line) while the 1084 level was a prominent low on the way up from 1051 (green dash line). So my target zone for the low of this correction is 1080-85 (green oval).

I expect to see this low in the next day or so. It should be followed by a resumption of the swing up to 1145-50.

Sold long at 1099.75

Long one unit at 1104.50

Guesstimates on July 29, 2010

September S&P E-mini Futures: Today's range estimate is 1103-18. The market is headed for 1145-50. I think that a new upward leg in the bull market started from the 1003 low made July 5.

QQQ: A new upward leg in the bull market has started. Initial target is 47.50.

TYX (thirty year bond yield): Long term support is at 3.85%. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): Long term support is at 2.90%. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: A move into the 135-40 zone is underway.

Dollar-Yen: A rally to 100.00 is underway. Support is now at 85.50.

September Crude: I still think crude oil is headed for 50.00.

GLD – August Gold: The odds are that the market will continue upward to 1320. But any weakness below 1150 will mean that a drop to 875 has begun.

SLV - September Silver: I think silver will rally to 21.50 and then begin a move to 10.oo.

Google: The 450 level is now support. A move that should take GOOG above 700 will begin soon.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.