Here is a daily chart of the Chicago Board of Trade. I last commented on BOT here.
I think that BOT will rally to a new high around the 148 level by the end of the year.
Thursday, August 31, 2006
Board of Trade
Here is a daily chart of the Chicago Board of Trade. I last commented on BOT here.
I think that BOT will rally to a new high around the 148 level by the end of the year.
Chicago Merchantile Exchange
Here is a daily chart of the Chicago Merchantile Exchange. I last commented on this stock here.
I still think CME has more on the upside in this bull market. I am sticking with my original 541 target and I expect it to be reached by the end of the year.
NYSE Group
Here is a daily chart of the New York Stock Exchange Group since its IPO last March. I last commented on this stock a couple of months ago.
I am bullish on the general market as you know and I think NYX will participate in the rally. My upside target is 103, the 2 and 1/8 multiple of its June low.
Guesstimates on August 31, 8:50 am ET
September S&P Futures: Support is at 1299. The market will probably rally to 1315 or so, a little above my initial estimate of resistance in the 1309-12 zone. After that a 25 point break should develop. Much high prices are likely later this year.
December Bonds: Switching to the December contract today. The market has gone about 10 ticks higher than I expected. Still I think the next big move in the bonds will be downward to 106-24. Resistance is at 111-00.
December 10 Year Notes: Switching to the December contract today. The market will soon begin a move down to 105. Resistance is at 107-10.
Euro-US Dollar: The 127.30 level is now support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. Support is at 116.30. The yen should reach 130 over the next year.
October Crude: The market dropped into the 68.00-69.00 zone yesterday and I think the next significant development will be a rally into the 73-75 zone.
December Gold: I am still short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
December Silver: Switching to the December contract today. I am still short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
December Bonds: Switching to the December contract today. The market has gone about 10 ticks higher than I expected. Still I think the next big move in the bonds will be downward to 106-24. Resistance is at 111-00.
December 10 Year Notes: Switching to the December contract today. The market will soon begin a move down to 105. Resistance is at 107-10.
Euro-US Dollar: The 127.30 level is now support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. Support is at 116.30. The yen should reach 130 over the next year.
October Crude: The market dropped into the 68.00-69.00 zone yesterday and I think the next significant development will be a rally into the 73-75 zone.
December Gold: I am still short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
December Silver: Switching to the December contract today. I am still short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
Wednesday, August 30, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this market here.
I think the market will soon hit the 1315 level. A reaction will probably begin next week. I expect it to be a little smaller than the early August break which was about 35 points. My best guess is that the market will drop from 1315 to 1291 or so. After the correction I expect a renewed rally which will continue to new bull market highs above the 1330 level.
Guesstimates on August 30, 8:50 am ET
September S&P Futures: Support is at 1299. The market will probably rally to 1315 or so, a little above my initial estimate of resistance in the 1309-12 zone. After that a 10-20 point break should develop. Much high prices are likely later this year.
September Bonds: I think the next big move in the bonds will be downward to 106-24. Resistance is at 110-08.
September 10 Year Notes: The market will soon begin a move down to 105. Resistance is at 107-04.
Euro-US Dollar: The 127.30 level is now support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. Support is at 116.30. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am still short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am still short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the next big move in the bonds will be downward to 106-24. Resistance is at 110-08.
September 10 Year Notes: The market will soon begin a move down to 105. Resistance is at 107-04.
Euro-US Dollar: The 127.30 level is now support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. Support is at 116.30. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am still short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am still short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
Tuesday, August 29, 2006
Guesstimates on August 29, 8:50 am ET
September S&P Futures: The market will probably rally to 1315 or so, a little above my initial estimate of resistance in the 1309-12 zone. After that a 10-20 point break should develop. Much high prices are likely later this year.
September Bonds: I think the next big move in the bonds will be downward to 106-24.
September 10 Year Notes: The market will soon begin a move down to 105.
Euro-US Dollar: The 127.30 level is now support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. Support is at 116.30. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am still short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am still short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the next big move in the bonds will be downward to 106-24.
September 10 Year Notes: The market will soon begin a move down to 105.
Euro-US Dollar: The 127.30 level is now support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. Support is at 116.30. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am still short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am still short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
Monday, August 28, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last discussed this chart here.
I had expected the market to break below the lows of the last two days and continue to 1287. Instead, this mornign the market staged a decisive upside breakout from the same range. Support is now at 1299 and as long as this level holds I shall think that the market is now headed up into the 1309-12 zone. From there a break of 20-25 points is likely the move to new bull market highs resumes.
Guesstimates on August 28, 8:50 am ET
September S&P Futures: I now expect a drop to 1287 or so and then a move up into the 1309-12 zone.
September Bonds: I think the next big move in the bonds will be downward to 106-24.
September 10 Year Notes: The market will soon begin a move down to 105.
Euro-US Dollar: The 127.00 level is support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the next big move in the bonds will be downward to 106-24.
September 10 Year Notes: The market will soon begin a move down to 105.
Euro-US Dollar: The 127.00 level is support and I still expect a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
Friday, August 25, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this market Wednesday.
The market has tried for two days to rally from support at 1293 but so far has not attracted any aggressive buyers. I think this means that the rally from 1291.50 has been only the second phase of a bigger three phase correction. I expect the third phase to carry a little lower to 1287 or so. Then the market should rally to the next resistance zone of 1309-12.
T-bonds
Here is a daily chart of the September T-bond futures. I last commented on this market here.
The market has entered my long standing target range of 110-111 for the rally from the May low. I see resistance at 110-08 and I think the next significant move in the bonds will be downward to a low above the May low. Right now I am guessing that this upcoming low will develop around the 106-24 level.
Dow Three Peaks and a Domed House
I have been following two developing examples of George Lindsay's Three Peaks and a Domed House formation in the Dow Industrials. My last post on this subject can be found here.
Above you see the updated, highly condensed daily chart of the Dow Industrial average. I have annoted the chart with blue numerals showing the turning points for the 3P-DH major formation and with red numerals showing the turning points of the minor formation. The numerals refer to the ideal schematic of the 3P-DH formation which can be found here.
At the moment I think the minor (red) formation has established its point 14 low on August 11. The market is now moving up from point 14 and the next phase of the minor formation should be what Lindsay called "the roof of the first story". This constitutes points 15-20 of the formation and often assumes the appearance of an upward sloping trading range. I do not think we have yet seen point 15.
The entire rally from the July low in the Dow should bring the market to point 23 of the minor formation and to point 27 of the major formation (blue numerals). I think this top is likely to develop about 7 months and 10 days from red point 6. This would place it in late November of this year. I think that the Dow will probably rally to or a bit above the 12000 level by that time.
If this is indeed a major formation then after the November high the market should drop subtantially to the price level at which the major formation began. This is my estimation is the 9800 level in the Dow.
Guesstimates on August 25, 8:50 am ET
September S&P Futures: I think the reaction from the 1307.75 level ended Wednesday at 1291.50. A move into the 1309-12 zone has begun.
September Bonds: I think the bonds will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: Yesterday a rally back above the 128.00 level was decisively reversed and now I think the market will drop back to near its last important low near 127.00. As long as that level holds I will continue to look for a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the bonds will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: Yesterday a rally back above the 128.00 level was decisively reversed and now I think the market will drop back to near its last important low near 127.00. As long as that level holds I will continue to look for a move to 130.60 before a substantial down move starts.
Dollar-Yen: The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
Thursday, August 24, 2006
Guesstimates on August 24, 8:50 am ET
September S&P Futures: The reaction ended at the 1291.50 level yesterday and now a move into the 1309-12 zone has begun.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: The market has been oscillating around the 128.00 support level and I still think that the next development will be a rally to 130.60.
Dollar-Yen: Support is at 115.80. The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: The market has been oscillating around the 128.00 support level and I still think that the next development will be a rally to 130.60.
Dollar-Yen: Support is at 115.80. The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 73.50 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 369 and I think GOOG will soon move above its all time high of 475.
Wednesday, August 23, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this market yesterday afternoon.
I had believed that yesterday's late rally started from the end of a three phase correction, but it now appears that the third phase of the drop from 1307.75 is still in progress. I expect it to end near support at 1293 and be followed by a rally into the 1309-12 short term target zone.
Guesstimates on August 23, 8:50 am ET
September S&P Futures: The is holding 1299 support and should now rally into the 1309-12 zone.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: The market is holding support at 128.00. I still think it likely that the market will move up to 130.60 before a substantial drop starts.
Dollar-Yen: Support is at 115.80. The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 74.00 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: The market is holding support at 128.00. I still think it likely that the market will move up to 130.60 before a substantial drop starts.
Dollar-Yen: Support is at 115.80. The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Resistance is at 74.00 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before the market turns much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
Tuesday, August 22, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart here.
In this morning's guesstimate I said that the drop from the early morning high of 1305.50 in electronic trading looked like the start of a third phase of a three phase correction. I estimated that the correction would carrry the market down to 1293 or so. In the event the market rallied again to 1305 in early trading but then broke to 1297.75 on the comments of two Fed presidents.
I think the market over-reacted to this minor news and the fact that yesterday's low was broken by only a point before a good rally began supports this view. I think that a three phase correction from Friday's high at 1307.75 in now over and that the market will trade into the 1309-12 zone over the next day or two.
Guesstimates on August 22, 8:50 am ET
September S&P Futures: The market bounced off of support at 1299 yesterday but only rallied as high as 1305.50 in electronic trading this morning before dropping back to yesterday’s support. I suspect that this morning’s break started the third phase of a small three phase correction which should carry to 1293 or so. After this drop the market should then rally into the 1309-12 zone.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: The market bounced off of resistance at 129.40 yesterday but should hold support at 128.00 today. I think it likely that the market will then move up to 130.60 before a substantial drop starts.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Switching to the October contract. Resistance is at 74.00 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before turning much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: The market bounced off of resistance at 129.40 yesterday but should hold support at 128.00 today. I think it likely that the market will then move up to 130.60 before a substantial drop starts.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
October Crude: Switching to the October contract. Resistance is at 74.00 and I still think we shall see the market break to 68.00 or so before a more substantial rally starts.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before turning much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
Monday, August 21, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart here.
So far the market has held 1299 support and the odds now favor a rally into the 1309-1312 resistance zone. Any reaction from this zone should be limited to 10-20 points and will be followed by a move that will take out the May high at 1331. I think the market will reach 1417 by the end of the year.
Gold
Here is a daily bar chart of December gold futures. I last commented on this market here.
I had believed that the market was on its way below 500 but the last couple of day's price action has convinced me that a move to the top of the current trading range will develop first. i expect gold to rally into the 665-70 range and then start a drop to below 500.
I had believed that the market was on its way below 500 but the last couple of day's price action has convinced me that a move to the top of the current trading range will develop first. i expect gold to rally into the 665-70 range and then start a drop to below 500.
Guesstimates on August 21, 8:50 am ET
September S&P Futures: Support today is at 1299. The market should make a temporary top in the 1309-12 zone but break no more than 10-20 points from there. The 1417 level should be reached by the end of the year.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: I am a little more bullish on the euro now and while there is minor resistance near 129.40 I think it likely that the market move up to 130.60 before a substantial drop starts.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 73.50.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before turning much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think will soon reach 110-08 and then break several points.
September 10 Year Notes: A rally to 107-12 is underway.
Euro-US Dollar: I am a little more bullish on the euro now and while there is minor resistance near 129.40 I think it likely that the market move up to 130.60 before a substantial drop starts.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 73.50.
December Gold: I am now short term bullish on gold and expect it to rally into the 665-670 range before turning much lower.
September Silver: I am short term bullish on silver and think that a move up to 1350 or so in the cards. After this rally a drop to below 900 should develop.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
Friday, August 18, 2006
Guesstimates on August 18, 8:50 am ET
September S&P Futures: Support is now at 1292. The market is on its way to 1309 and eventually to 1417 by the end of the year.
September Bonds: I think the bonds are on the way to 110.
September 10 Year Notes: A rally to 107-16 is underway.
Euro-US Dollar: I still think that the market will rally to 129.40 before a big drop starts. Support is at 127.70 and weakness below there will mean that the big drop I am expecting has already begun.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the bonds are on the way to 110.
September 10 Year Notes: A rally to 107-16 is underway.
Euro-US Dollar: I still think that the market will rally to 129.40 before a big drop starts. Support is at 127.70 and weakness below there will mean that the big drop I am expecting has already begun.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is now at 376 and I think GOOG will soon move above its all time high of 475.
Thursday, August 17, 2006
Nasdaq Composite
Here is a weekly chart of the Nasdaq Composite Index. I last commented on this chart here.
I think this index is headed for my primary target of 2550, just underneath the level which is 1/2 of the 2000 high point at 5133. My best guess is that this target will be reached by late November 2006.
Guesstimates on August 17, 8:50 am ET
September S&P Futures: A reaction from 1300 down to support at 1289 would be normal at this juncture. The market is on its way to 1309 and eventually to 1417 by the end of the year.
September Bonds: I think the bonds are on the way to 110.
September 10 Year Notes: A rally to 107-16 is underway.
Euro-US Dollar: I thought the rally would halt near 128.20 but the market blew through there on yesterday’ CPI news. The euro now is on its way to 129.40 but I think the next 500 pips from current levels will be downward.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the bonds are on the way to 110.
September 10 Year Notes: A rally to 107-16 is underway.
Euro-US Dollar: I thought the rally would halt near 128.20 but the market blew through there on yesterday’ CPI news. The euro now is on its way to 129.40 but I think the next 500 pips from current levels will be downward.
Dollar-Yen: Support is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Wednesday, August 16, 2006
S&P Update
Here is an updated version of the hourly September S&P e-mini futures chart that I commented on this morning.
The market has taken a peek above the 1297.75 high and I think the odds are better than even that we shall now see a modest reaction. I have raised my estimate of support to 1289 from 1283. My short term upside target is still 1309 and I also think we shall see the 1417 level later this year.
S&P Bull Market Boxes
Here is a weekly chart of the cash S&P 500 showing the 185 point bull market boxes that have controlled the big swings within the bull market that began from the 768 low in 2002. I last commented on this chart here.
The market's reaction from the 1326 high in early May started from the top of a box and ended in June at the 1/2 point of the same box. I now think that the S&P is headed for the 1/2 point of the next higher box. This is the 1417 level and I expect the market to reach this target by the end of the year.
The market's reaction from the 1326 high in early May started from the top of a box and ended in June at the 1/2 point of the same box. I now think that the S&P is headed for the 1/2 point of the next higher box. This is the 1417 level and I expect the market to reach this target by the end of the year.
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this market here.
The market is very close to its last top (dashed line) at 1297.75. It would be typical behavior for the futures to take a brief peek above 1297.75 and then drop 10-15 points before resuming their move to 1309. In any event I see support at 1283, the last top on the way up.
Guesstimates on August 16, 8:50 am ET
September S&P Futures: I think that the correction which began from the 1297.75 level on August 4 ended at 1262.50. The market is now headed for 1309. Support is at 1286
September Bonds: I think the bonds are on the way to 110.
September 10 Year Notes: A rally to 107-16 is underway.
Euro-US Dollar: The market has started a drop that will take it below 123.00 over the next few weeks. Resistance is now at 128.20.
Dollar-Yen: Support today is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: I think the bonds are on the way to 110.
September 10 Year Notes: A rally to 107-16 is underway.
Euro-US Dollar: The market has started a drop that will take it below 123.00 over the next few weeks. Resistance is now at 128.20.
Dollar-Yen: Support today is at 115.30. The yen is on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Tuesday, August 15, 2006
Guesstimates on August 15, 8:50 am ET
September S&P Futures: I think that the correction which began from the 1297.75 level on August 4 ended at 1262.50. The market is now headed for 1309. Support is at 1276.
September Bonds: The 108-04 level is support and I think the bonds have started to rally to 110.
September 10 Year Notes: Support is at 105-28 and a rally to 107-16 is underway.
Euro-US Dollar: The market has started a drop that will take it below 123.00 over the next few weeks. Resistance is now at128.20.
Dollar-Yen: I think the yen has held 114.30 support and is now on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The 108-04 level is support and I think the bonds have started to rally to 110.
September 10 Year Notes: Support is at 105-28 and a rally to 107-16 is underway.
Euro-US Dollar: The market has started a drop that will take it below 123.00 over the next few weeks. Resistance is now at128.20.
Dollar-Yen: I think the yen has held 114.30 support and is now on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Monday, August 14, 2006
Crude Oil
Here is a daily chart of September crude oil futures. I last commented on this market here.
I think the market has made a lower top and is now headed for support in the 68.00-69.00 range. If I am right about the longer term picture crude will bounce only three or four dollars up from this support zone and soon after will trade well below 68.00.
Guesstimates on August 14, 8:50 am ET
September S&P Futures: I think that the correction which began from the 1297.75 level on August 4 ended at 1262.50. The market is now headed for 1309.
September Bonds: The 108-04 level is support and I think the bonds are about to rally to 110.
September 10 Year Notes: Support is at 105-28 and the next development will be a rally to 107-16.
Euro-US Dollar: The market has started a drop that will take it below 123.00 over the next few weeks. Resistance is now at128.20.
Dollar-Yen: I think the yen has held 114.30 support and is now on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The 108-04 level is support and I think the bonds are about to rally to 110.
September 10 Year Notes: Support is at 105-28 and the next development will be a rally to 107-16.
Euro-US Dollar: The market has started a drop that will take it below 123.00 over the next few weeks. Resistance is now at128.20.
Dollar-Yen: I think the yen has held 114.30 support and is now on the way to 119.50. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold has begun an extended drop that will carry it below the 500 level.
September Silver: I think silver has begun an extended drop that will carry it below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Friday, August 11, 2006
Guesstimates on August 11, 8:50 am ET
September S&P Futures: I think that the correction which began from the 1297.75 level on August 4 should ended yesterday at 1262.50 which will also be support for the next few days. The next development will be a rally to 1309.
September Bonds: The 108-04 level is support and I think the bonds are about to rally to 110.
September 10 Year Notes: Support is at 105-28 and the next development will be a rally to 107-16.
Euro-US Dollar: Resistance is still at 129.20 and the next development should be a drop below 123.00.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The 108-04 level is support and I think the bonds are about to rally to 110.
September 10 Year Notes: Support is at 105-28 and the next development will be a rally to 107-16.
Euro-US Dollar: Resistance is still at 129.20 and the next development should be a drop below 123.00.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Thursday, August 10, 2006
T-bonds
Here is an hourly chart showing regular hours trading in the September T-bond futures. I last commented on this market here.
I think the reactions which I thought would end near 108-04 ended today at 108-08. It has a clear three phase structure and was only 4 ticks shorter than the previous reaction from 107-25 to 106-09.
The market should now rally to 110-00 and eventually at least to 110-16 before any substantial break develops.
I think the reactions which I thought would end near 108-04 ended today at 108-08. It has a clear three phase structure and was only 4 ticks shorter than the previous reaction from 107-25 to 106-09.
The market should now rally to 110-00 and eventually at least to 110-16 before any substantial break develops.
Is That Dog Barking?
One of the most useful clues to a market's underlying strength or weakness is its response to unexpected news. A market that doesn't drop in response to a piece of unexpected bearish news is headed higher. A market that fails to rally in response to unexpected bullish news is headed lower. I like to call this the "Dog That Didn't Bark" phenomenon.
This morning police in the UK broke up a terrorist plot aimed at airline travelers to the USA that was just hours from being carried out. This news spooked European stock markets and led to a lower open in the US stock market. I would have expected gold and silver to rally on the news, bonds to rally on the flight to safety, and oil to rally on increased fears about the Mideast supply when terrorists are active.
Instead, we saw stocks rally from the open in the US, gold and silver drop, bonds drop, and oil drop. That dog didn't bark! So I take this response to unexpected news as more evidence that stock prices in the US are headed higher along with bond price, and that gold, silver, oil are all headed lower.
This morning police in the UK broke up a terrorist plot aimed at airline travelers to the USA that was just hours from being carried out. This news spooked European stock markets and led to a lower open in the US stock market. I would have expected gold and silver to rally on the news, bonds to rally on the flight to safety, and oil to rally on increased fears about the Mideast supply when terrorists are active.
Instead, we saw stocks rally from the open in the US, gold and silver drop, bonds drop, and oil drop. That dog didn't bark! So I take this response to unexpected news as more evidence that stock prices in the US are headed higher along with bond price, and that gold, silver, oil are all headed lower.
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart yesterday afternoon.
In electronic trading early this morning before the pit opening the market dropped to 1262.50 after news of the terror plot against airline travelers to the US from England. Resistance above the market is at 1272 and a close above that level today will mean that the move to 1309 and higher has begun. Meantime I am willing to guess that the market will drop one more time to 1263 support before the move to 1309 begins.
Guesstimates on August 10, 8:50 am ET
September S&P Futures: The correction which began from the 1297.75 level on August 4 should end near 1263 support. The next development will be a rally to 1309.
September Bonds: The bonds drop to 108-04 or so. After that a rally to 110 will begin.
September 10 Year Notes: A drop to support around the 105-28 level is underway. After this correction is complete I expect a move up to 107-16.
Euro-US Dollar: Resistance is still at 129.20 and the next development should be a drop below 123.00.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The bonds drop to 108-04 or so. After that a rally to 110 will begin.
September 10 Year Notes: A drop to support around the 105-28 level is underway. After this correction is complete I expect a move up to 107-16.
Euro-US Dollar: Resistance is still at 129.20 and the next development should be a drop below 123.00.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Wednesday, August 09, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart yesterday.
As you can see the market rallied from 1272 support late yesterday and early today, getting as high as 1288.25. The subsequent break has carried it back to support and the drop from 1288 now looks like the third phase of a three phase correction. My best guess is that the correction will end near the 1263 level.
The second chart you see above this post shows the daily count of the number of issues which advance on the New York Stock Exchange (black line) and the 10 day moving average of this number (red line). I last commented on this indicator here.
You can see that the daily count of the number of advancing issues has moved up both yesterday and today (so far) despite the reactionary tendency in the S&P both days. Morover, the 10 day moving average appears ready to establish its third consecutive higher low. I think this is a hint that higher prices lay ahead. I think the market will rally to 1309 once it established a low near 1263.
Guesstimates on August 9, 8:50 am ET
September S&P Futures: A rally to 1309 is underway. The market should hold support near 1272.
September Bonds: The bonds broke below 108-28 support this morning and this means the market will drop further to 108-04 or so. After that a rally to 110 will begin.
September 10 Year Notes: A drop to support around the 105-28 level is underway. After this correction is complete I expect a move up to 107-16.
Euro-US Dollar: Resistance is at 129.20 and the next development should be a drop below 123.00.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The bonds broke below 108-28 support this morning and this means the market will drop further to 108-04 or so. After that a rally to 110 will begin.
September 10 Year Notes: A drop to support around the 105-28 level is underway. After this correction is complete I expect a move up to 107-16.
Euro-US Dollar: Resistance is at 129.20 and the next development should be a drop below 123.00.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Tuesday, August 08, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart here.
This afternoon the Fed announced that it would not increase the federal funds rate at this time and after an initial rally the market dropped as low as 1273.50. I think the reaction from 1297.75 ended at this level where it would almost exactly equal the length of the last reaction from 1270 to 1244. The market will now rally to its next resistance which I now calculate at 1309.
Guesstimates on August 8, 8:50 am ET
September S&P Futures: The market should hold support near 1272 and then rally into the 1310-15 range.
September Bonds: The bonds should hold support near 108-28 and then move up to the next short term target at 109-24. The market is in the midst of a bigger rally into the 110-111 zone.
September 10 Year Notes: The notes should hold support near 106-08 and then rally too 106-28 before another reaction sets in . The market’s next stop after that will be 107-20.
Euro-US Dollar: The market should now begin a drop to below the 123.00 level.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The bonds should hold support near 108-28 and then move up to the next short term target at 109-24. The market is in the midst of a bigger rally into the 110-111 zone.
September 10 Year Notes: The notes should hold support near 106-08 and then rally too 106-28 before another reaction sets in . The market’s next stop after that will be 107-20.
Euro-US Dollar: The market should now begin a drop to below the 123.00 level.
Dollar-Yen: I think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Monday, August 07, 2006
Guesstimates on August 7, 8:50 am ET
September S&P Futures: The market broke should hold support near 1272 and then rally into the 1310-15 range.
September Bonds: The bonds should hold support near 108-28 and then move up to the next short term target at 109-24. The market is in the midst of a bigger rally into the 110-111 zone.
September 10 Year Notes: The notes should hold support near 106-08 and then rally too 106-28 before another reaction sets in . The market’s next stop after that will be 107-20.
Euro-US Dollar: The market should now begin a drop to below the 123.00 level.
Dollar-Yen: I still think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The bonds should hold support near 108-28 and then move up to the next short term target at 109-24. The market is in the midst of a bigger rally into the 110-111 zone.
September 10 Year Notes: The notes should hold support near 106-08 and then rally too 106-28 before another reaction sets in . The market’s next stop after that will be 107-20.
Euro-US Dollar: The market should now begin a drop to below the 123.00 level.
Dollar-Yen: I still think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 76.60.
December Gold: I now think that gold will not rally above its July high and instead will stall below 670 and begin an extended drop.
September Silver: I think silver will hold below resistance near 1270 and begin a move to below 900.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Friday, August 04, 2006
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart here.
In this morning's guesstimate I said that I thought the market would exceed my original 1296 target and make it up to 1299 before breaking 10-20 points. In the event the high tick so far has been 1297.75 and the market afterward has dropped as low as 1280.50.
The reaction so far has been almost exactly as big as the reaction earlier this week from 1286 to 1270.25 so I think it is reasonable to expect a bounce upward to 1288 or so.
This bounce should be the second, upward phase of a three phase correction which I think will end near 1272 early next week. A drop from 1298 to 1272 would be a drop almost equal to the drop on July 20-21 from 1269 to 1243.50.
Once this brief corrective phase is complete I expect to see the market rally into the 1315-20 zone. I also think that by the end of the year we shall see the S&P's trading near 1420.
Guesstimates on August 4, 8:50 am ET
September S&P Futures: The market broke out of its 1270-88 trading range this morning on the employment number. It will probably rally to 1299, a little above my original 1296 target and then have another 10-20 reaction.
September Bonds: The bonds broke resistance at 108-20 on the employment number and will move up to 109-20 before another reaction sets in. The market is in the midst of a bigger rally into the 110-111 zone.
September 10 Year Notes: The notes should rally to 106-28 before another reaction sets in . The market’s next stop after that will be 107-20.
Euro-US Dollar: The market through resistance at 128.30 this morning on the employment number. It should halt near 128.80 and then begin a drop to below 123.00.
Dollar-Yen: I still think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Gold should reach the 700 level before a swing to below 500 begins.
September Silver: I now think silver will rally to 1270 before a swing to below the 900 level starts.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: The bonds broke resistance at 108-20 on the employment number and will move up to 109-20 before another reaction sets in. The market is in the midst of a bigger rally into the 110-111 zone.
September 10 Year Notes: The notes should rally to 106-28 before another reaction sets in . The market’s next stop after that will be 107-20.
Euro-US Dollar: The market through resistance at 128.30 this morning on the employment number. It should halt near 128.80 and then begin a drop to below 123.00.
Dollar-Yen: I still think the yen will hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Gold should reach the 700 level before a swing to below 500 begins.
September Silver: I now think silver will rally to 1270 before a swing to below the 900 level starts.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Thursday, August 03, 2006
Guesstimates on August 3, 8:50 am ET
September S&P Futures: The market appears to be stuck in a 1270-1288 trading range. Support is at 1273 and the next upside target is 1296.
September Bonds: Resistance is at 108-20 and support at 107-24. The market is in the midst of a bigger rally to 110.
September 10 Year Notes: Resistance is at 106-04 and support at 105-18. The notes are headed for 107.
Euro-US Dollar: Resistance today is 128.30 The market will soon begin a drop to below 123.00.
Dollar-Yen: The yen should hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Gold should reach the 700 level before a swing to below 500 begins.
September Silver: I now think silver will rally to 1270 before a swing to below the 900 level starts.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
September Bonds: Resistance is at 108-20 and support at 107-24. The market is in the midst of a bigger rally to 110.
September 10 Year Notes: Resistance is at 106-04 and support at 105-18. The notes are headed for 107.
Euro-US Dollar: Resistance today is 128.30 The market will soon begin a drop to below 123.00.
Dollar-Yen: The yen should hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Gold should reach the 700 level before a swing to below 500 begins.
September Silver: I now think silver will rally to 1270 before a swing to below the 900 level starts.
Google: Support is at 364 and I think GOOG will soon move above its all time high of 475.
Wednesday, August 02, 2006
Gold
Here is a daily chart of December gold futures. I last commented on this market here.
I've changed my mind about 662 as resistance for the move up from the July 24 low at 615. I now think that this market, like silver, is in the third phase of a three phase correction which began from the 547 level (August contract) on June 14. I now think that this third phase will end near 700.
Once the rally is complete I expect gold to drop below 500.
I've changed my mind about 662 as resistance for the move up from the July 24 low at 615. I now think that this market, like silver, is in the third phase of a three phase correction which began from the 547 level (August contract) on June 14. I now think that this third phase will end near 700.
Once the rally is complete I expect gold to drop below 500.
Sears Holdings
Here is a daily chart of Sears Holdings. I last commented on this chart here.
I think SHLD will hold support near 134. This is just a tad below the 1/2 point of one of the 23 point boxes which is the typical place at which the market stops a swing. My upside target for SHLD is the 1 and 5/8 multiple of its recent low near 111. I would also point out that the midpoint of a box is at 183 and that 183 is also a Fibonacci multiple (13) of the all time low near 14.
I think SHLD will hold support near 134. This is just a tad below the 1/2 point of one of the 23 point boxes which is the typical place at which the market stops a swing. My upside target for SHLD is the 1 and 5/8 multiple of its recent low near 111. I would also point out that the midpoint of a box is at 183 and that 183 is also a Fibonacci multiple (13) of the all time low near 14.
Here is an updated daily chart of Google. I last commented on this chart a few days ago.
This mornign GOOG dropped to support at 372 which is a Fibonacci 55 points below its most recent top at 427. I think GOOG is now ready to start a rallly that will carry it above its all time high at 475.
S&P
Here is an hourly chart of the September S&P e-mini futures. I commented on this chart yesterday.
I thought that the market would drop to 1263 in a three phase correction. Instead today is has traded almost two hours above what I thought would be the top of the second phase at 1278. This means that the correction is over and that the S&P's are headed for the next upside target at 1296.
This is the second time in a week that a break in the S&P's ended before a clear three phase structure was visible. I think this is telling us that the market is much stronger than commonly believed and that much higher prices lay ahead.
Silver
Here is a daily bar chart of September silver futures. I last commented on this market here.
I had believed that the early July top at 1182 would end the rally from the 945 low in the July contract which was made in mid-June. Instead that top only marked the end of the first phase of a bigger three phase rally. This morning the market blew past 1182. I now think it is headed for resistance near 1272 which is the 3 and 5/8 multiple of the 351 low made in 1991.
I still think that once the 1272 level is reached the market will break below 900.
Guesstimates on August 2, 8:50 am ET
September S&P Futures: I still think the market has a good shot at 1263 before it rallies to the next upside target of 1296.
September Bonds: Resistance is at 108-20 and support at 107-24. The market is in the midst of a bigger rally to 110.
September 10 Year Notes: Resistance is at 106-04 and support at 105-18. The notes are headed for 107.
Euro-US Dollar: Resistance today is 128.30 The market will soon begin a drop to below 123.00.
Dollar-Yen: The yen should hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Short term downside target is 580. Resistance above the market is at 662. A drop below 500 is underway.
September Silver: I think silver is on its way below 900. Short term downside target is 980. Resistance above the market is now at 1200.
Google: Support is at 372 and I think GOOG will soon move above its last high at 455.
September Bonds: Resistance is at 108-20 and support at 107-24. The market is in the midst of a bigger rally to 110.
September 10 Year Notes: Resistance is at 106-04 and support at 105-18. The notes are headed for 107.
Euro-US Dollar: Resistance today is 128.30 The market will soon begin a drop to below 123.00.
Dollar-Yen: The yen should hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Short term downside target is 580. Resistance above the market is at 662. A drop below 500 is underway.
September Silver: I think silver is on its way below 900. Short term downside target is 980. Resistance above the market is now at 1200.
Google: Support is at 372 and I think GOOG will soon move above its last high at 455.
Tuesday, August 01, 2006
Gold
Here is an hourly chart showing pit and electronic trading in December gold futures. I am switching to the December contract from the August contract. December is trading about $12 over August. I last commented on gold here.
I thought the 650 level would be resistance but today the market moved decisively above that level. However it should go no higher than the 662 level which is the 2 and 5/8 mutiple of the 252 low made in 1999. I think the next significant move in gold will take it to the short term target near 580 and eventually below 500.
I thought the 650 level would be resistance but today the market moved decisively above that level. However it should go no higher than the 662 level which is the 2 and 5/8 mutiple of the 252 low made in 1999. I think the next significant move in gold will take it to the short term target near 580 and eventually below 500.
Updated Bond Market Forecast
Here is a monthly bar chart showing yields for the 10 year treasury note. I'd like to use this chart to update my bond market forecast which I posted January 22, 2006.
As you can see the 10 year note yield has reached the 5.25% level, just a little higher than the 5.20% estimate I offered in my forecast. The high yield so far has occurred on June 29, just a little earlier than the August-September time frame suggested in my 2006 bond market forecast.
Note that the move up from the 3.07% low yield in June 2003 to the recent high yield at 5.25 is just a bit more in percentage terms that the 66% increase in yields from the 1998 low yield of 4.10% to the 2000 high yield of 6.82%. Moreover, the move up in yields from the 2003 low at 3.07% has developed the classic three phase shape common to corrections and move within a trading range.
These facts all support my current view that the high yield of 2006 has been established at the 5.25% level and that the 10 year yield has begun an extended drop. I will be convinced of this if we can close the month of August at 4.97% or below.
If the high yield has been seen as I suspect then we shall probably see a period of 18 months during which the 10 year yield gradually drops with the ususal zig-zags in between. I think a drop of 100-150 basis points will prove to be a good estimate for the extent of the interest rate decline.
As you can see the 10 year note yield has reached the 5.25% level, just a little higher than the 5.20% estimate I offered in my forecast. The high yield so far has occurred on June 29, just a little earlier than the August-September time frame suggested in my 2006 bond market forecast.
Note that the move up from the 3.07% low yield in June 2003 to the recent high yield at 5.25 is just a bit more in percentage terms that the 66% increase in yields from the 1998 low yield of 4.10% to the 2000 high yield of 6.82%. Moreover, the move up in yields from the 2003 low at 3.07% has developed the classic three phase shape common to corrections and move within a trading range.
These facts all support my current view that the high yield of 2006 has been established at the 5.25% level and that the 10 year yield has begun an extended drop. I will be convinced of this if we can close the month of August at 4.97% or below.
If the high yield has been seen as I suspect then we shall probably see a period of 18 months during which the 10 year yield gradually drops with the ususal zig-zags in between. I think a drop of 100-150 basis points will prove to be a good estimate for the extent of the interest rate decline.
S&P
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart Friday.
The market has dropped almost three points below the 1273 support level I cited in this morning's guesstimate. Moreover, the drop from the 1286 high still looks like only the first phase of a normal three phase correction. So I think we shall see a rally to 1278 or so as the second phase and then a final drop to 1263 which will end the third phase of the correction.
Once this correction is over I expect to see the S&P's rally to another temporary top near1296. I still think that the 1229 low of June 14 will hold and that we shall see the S&P's trade at 1350 or higher by the end of this year.
Guesstimates on August 1, 8:50 am ET
September S&P Futures: The next upside target for the S&P’s is 1296. Meantime support is at 1273.
September Bonds: Resistance is at 108-20 and support at 107-24. The market is in the midst of a bigger rally to 110.
September 10 Year Notes: Resistance is at 106-04 and support at 105-18. The notes are headed for 107.
Euro-US Dollar: I still think 127.80 is resistance and that the market will soon begin a drop to below 123.00.
Dollar-Yen: The yen should hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Short term downside target is 580. Resistance above the market is at 650. A drop below 500 is underway.
September Silver: I think silver is on its way below 900. Short term downside target is 980. Resistance above the market is still at 1150.
Google: Support is at 372 and I think GOOG will soon move above its last high at 455.
September Bonds: Resistance is at 108-20 and support at 107-24. The market is in the midst of a bigger rally to 110.
September 10 Year Notes: Resistance is at 106-04 and support at 105-18. The notes are headed for 107.
Euro-US Dollar: I still think 127.80 is resistance and that the market will soon begin a drop to below 123.00.
Dollar-Yen: The yen should hold 114.30 support. The next development will be a rally to 120.00. The yen should reach 130 over the next year.
September Crude: Downside target is 68.00 and resistance above the market is at 75.90.
December Gold: Short term downside target is 580. Resistance above the market is at 650. A drop below 500 is underway.
September Silver: I think silver is on its way below 900. Short term downside target is 980. Resistance above the market is still at 1150.
Google: Support is at 372 and I think GOOG will soon move above its last high at 455.
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