Tuesday, July 31, 2007

Late Stock Market Update

Here are hourly charts of the September S&P e-mini futures, the Spiders, and the QQQQ's. At the top of this post you will see a chart of the daily count of the number of issues traded on the New York Stock Exchange (black line) and the 5 day moving average of this number (purple line). I last commented on the stock market here.
Today the market broke sharply late in the day and made a new low for regular hours trading. I think it is worthy of notice that the daily count of the advancing issues stayed well above the low point it established last week. This is a very minor bullish divergence but given today's very wide range and close near the low of the range I am willing to give it added importance.
In any event I think that the swing down from today's high will end early tomorrow not far from today's low. My best guess is that the 1450 level in the S&P and the 144.20 level in the Spiders will prove to be support, while the corresponding level in the Q's is 47.30. All three markets should then rally substantially, the S&P's to 1500, the Spiders to 149.50, and the Q's to 48.50.
After this rally I think that the market will take another tumble, this time to 1435 in the S&P's, 143.00 in the Spiders, and 46.50 in the Q's. At those levels a very important low is likely to develop and I expect the market to rally from there to new bull market highs.


Anonymous said...

One of the problems with this afternoons selling which i attribute to "forced" hedge fund selling to raise funds because of AHM problems is the hedgies sell strong stocks because that's where the greatest profits are...ala Willie Sutton.

Anonymous said...

what chart system do use use on this blog? I love the layout, especially the ability to leave the right edge open into the future but cant find it anywhere.

Carl Futia said...


Most of the charts are QCharts charts from Quote.com which was purchased by E-signal last year.


Anonymous said...

Well ... I don't want to believe that it's going to go down to 1435, but I can't say I'm going to vote against you!

Anonymous said...

Carl, For a bottom why not the obvious tried but true
50% correction,
calculated from last july or march lows?
mike holsman

Anonymous said...

a follow up post to my last :
the fib retracement from last march low to july high 1566 would be 1441 which was almost touched
over the night trading session
thanks for your site-
best wishes

Anonymous said...

"My best guess is that the 1450 level in the S&P"

"the S&P's to 1500"

"1435 in the S&P's"

Do you mean cash or futures ? Sometimes you are are clear about which; most times it's not clear.

In the the first quote i would assume cash because you use "the S&P" (singular as in cash). In the other two examples you use "S&P's" (plural as in futures).

Thank you

Carl Futia said...

I think I make quite clear in each post what market I am talking about. In the one to which you refer I am talking about the September S&P e-mini futures as I say in the opening sentence. If you are interested in the cash S&P you cas multiply the Spider's price by 10 to come up with my estimates for the cash S&P.