Wednesday, January 30, 2008

Guesstimates on January 30, 8:20 am ET

Spiders - March S&P E-mini Futures: The futures are headed up into the 1400-1420 zone before another substantial reaction develops. Even so, I think that sometime in the next couple of weeks we shall see a drop back to the 1300 level or a little lower before a multi-month upmove begins. I think the market will take only 3 or 4 months to move above the 1600 level.

QQQ: I think the Q’s are headed for 47.50.

TLT - March Bonds: The market will probably bounce off its 2003 top of 123-03. Support is still at 118-12. TLT has nearly reached its 98.50 target.

March 10 Year Notes: The notes should encounter strong resistance at 120. Weakness below 115-08 will mean that the trend has turned downward.

Euro-US Dollar: I still think that the market is headed for 151 or so.

Dollar-Yen: I think the market is establishing an important low but another drop down into the 104-105 zone is likely before a sustained rally can begin.

XLE - OIH - USO – March Crude: Resistance stands at 95.00. I think that crude is headed for 75.00 and eventually much lower than that. During that time USO should drop to 56, OIH to 140 and XLE to 60.

GLD - February Gold: I think gold futures are now headed for 1000. Support is at the 885 level.

SLV - March Silver: It looks like silver is bout to move past resistance in the 1660-80 zone and the next upside target is 1830. Support stands at 1500.

Google: I think a move to new bull market highs will begin soon. The 515 level is support.


Anonymous said...

How or why would you predict the S&P is headed up without knowing waht the FED will do?

I like you perspective and appreciate your insight, but will never understand how you can ignore certain economic issues in your predictions.

Carl Futia said...

Well, I think that the Fed is NOT an independent actor in the economic play. Rather, the Fed responds to market events and its policy is driven by the spread between the funds rate and short term market rates. To choose a different metaphor, the Fed is the tail on the dog of the economy, not its head!!

Anonymous said...

carl, what are the chances of FED cutting 125basis points in 9 days? very unlikely..and if they fed cuts 25 basis..dont you think market will just sell off? i think it is too bold to predict that the market goes to 1400-1420.

Anonymous said...


Thanks for answering my question.

Good answer BTW. Does not mean you are correct, but I understand your perspective a lot better. If I were to guess I think you are correct, but we shall see soon enough (as will my portfolio)

Anonymous said...

Hmm, the fed did cut 1.25 bp in 9 days. I wonder why? I know. The fed follows the 90 day T-bill almost to the letter. Overlay the fed funds target rate on the 90 day t-bill over the last 50 years and you'll see the correlation. I personally don't know their tolerance relative to the spread but they will and do follow it.