Thursday, July 10, 2008

Guesstimates on July 10, 8:15 am ET

Spiders - September S&P E-mini Futures: I didn’t expect the market to drop back near its lows yesterday. That weakness means that we will probably see a 1230 print before a rally to 1310 and eventually much higher begins. Strength today above the 1263 level will mean that the rally to 1310 has already begun. 

QQQ: Support remains at 44.00. Resistance stands at 47.50.  During the next few months the market should rally to 55 or higher.  

TLT - September Bonds: The bonds are headed upward to 118-00. 

September 10 Year Notes:  The notes are headed for 117-16. 

Euro-US Dollar: I think the market is on its way to 163. Support is at 155.80. 

Dollar-Yen: The yen is headed for 103.50.  From there the rally to 112.00 will resume.  

XLE - OIH - USO – August Crude: Crude is headed for 160-165. Support is at 133. 

GLD - August Gold: I think the market is headed back to 1000. Support is at 915. 

SLV - September Silver: I think silver is the way to the 1950 level. 

Google: It is beginning to look like the reaction low for GOOG is in. A move to 750 or higher will be the next development.   



Anonymous said...

Hi Carl:

Great Blog and your insights are appreciated. But I am a doubting kind and I don't think predicting the markets is as easy as looking at sentiment indicators and magazine covers. People feel crap 'cause it is crap out there if you are looking at housing prices and gasoline. I think these are the two reasons why the Investors Intelligence survey is so bearish. After all, this survey is completed by people who are well aware of the housing troubles and the gas pump pains. I would not read too much into it, except that yes, peole are feeling shitty. But to make the jump to new highs from that observation begs a little explanation. So the general population has no interest in investing, therefore stocks go up? Could be, but this massive leveraging and re-leveraging effort by the Fed and other central banks will end sometime.

I just see one road-block to new highs. And that is the breaking of a 34 year trendline on the DOW. Does this not mean anything to your analysis?

Thanks again for having this blog.


John B. Vassos
Naples, FLA

Anonymous said...

I think crude oil is headed for 96, with first support at 121. Euro should attempt to break higher within the next 7 days to target 1.5800-30 and 1.5900 then. I do not expect 1.6019 to be in danger. Good trading all !MC

Jimmy said...

I agree on oil to the 121 area, but I think it will find support there unless there is a resolution to the Iran situation. I am playing for a rally to 1,310 - 1,330 through August on an oil decline, but this will be a dead-cat bounce. The earnings estimates for Q3 & Q4 are a joke. The Q2 numbers will probably carry us for a little while though before beginning the next leg down. Carl will be right, but not for a few years.

It depends on how long you're willing to wait - I'd much rather make a million by December 2009 than make a million by December 2013 :)

Jimmy said...

One more thing - people are scared right now for good reason. High levels of fear are only useful as a contrary indicator if they are more scared than is warranted. Given the facts on the ground right now, I don't think that the fear level is excessive. It's ok to bet that the facts will improve, but you should know that that is what you are doing if you are doing that.

Anonymous said...

To Jimmy:

The "It's different this time" mantra never holds. But, you did allude to the answer. "Given the facts on the ground RIGHT NOW" (emphasis added by me). Markets look 9 months ahead, give or take, so right now isn't as relevant.

The market capitulated in January, with the spike low on 2.9 bil. shares. In March, that spike low only had 1.9 bil. shares. The other day, we did 1.48 bil. shares, or a 50% decrease in volume. Volume should confirm price, and it most certainly is not. That's because the bulls have sold, there are hardly any left. So when you run out of sellers, what's the only other option? Those waiting for capitulation to get back in, will never get back in. In 1932, the closing bear market low on the Dow was on the lightest volume of the decline. The next day was an up day, with even lighter volume. Imagine what people were saying then.
In 1974, the Dow broke to it's final low in Dec, unconfirmed by other indices, but the high volume low occurred a couple of months prior.
In 2002, capitulation was in July, as the Oct. low saw much lighter volume.
Bear markets end on a whimper, not a bang. Bull market corrections can end on a bang, but bear markets usually do not. That is because there are few left to sell to generate the volume seen prior to the final low.

Considering sentiment is at multi-year lows, which includes an 80%+ decline in the Nasdaq, is saying something. Of course, back then, everyone was saying that that level of fear was warranted, things were different.
And, what is warranted is defined differently depending on one's opinion.

Also, the internals of this bear market have deteriorated. In Jan, you had over 1100 new 52 week lows, March, it was over 700, and this week, with the Dow even lower, it was just over 600 new lows. If the bear were a healthy one, that list would be expanding. One must ask what those other 500 stocks are doing if they are not making new lows with the market.

Unknown said...


Based on the charts, the next tradable bottom of this leg down will be 1177, which is the double top made in Q1,02. This also fits with your 65 point box, with 1239 as the top of the box.

You may want to look at this possibility to avoid constantly ratcheting down your support and incurring grief from your readers.


Anonymous said...

i have a question which i cant understand... i thought bear markets form from recession? we are not in a recession, nor does it look like we are heading in one, unless something drastically happens, so why are we in a bear market?

Anonymous said...

Black Friday/monday combo coming up. Sentiment is useless indicator, Spx 950 is up next.

Anonymous said...

@ anonymous

a bear market is called so in case of an stockmarket that lost more than 20 percent from its top...20 percent as the barrier.

i think we will see a technical recession, what means that there are two following quarters with negative economic growth.

good trades and greetings from germany!