Wednesday, August 06, 2008

Guesstimates on August 6, 8:15 am ET

Spiders - September S&P E-mini Futures: I am now 200% long from an average price of 1251.25. I think the e-minis will reach 1325 over the next week or two. Support today is at 1260. I think the market is in the early stages of a rally which will carry it to 1500 over the next several months. 

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 trend has turned downward once more and the bonds are headed for 109. Resistance is at 116-00. 

September 10 Year Notes: The trend has turned downward and the notes are headed for 108. Resistance above the market is at 115-00. 

Euro-US Dollar: The trend has turned downward in the euro and I think the market is headed for 135. Resistance above the market is at 158.50. 

Dollar-Yen: A rally to 112.00 is now underway.  Support is at 105.00. 

XLE - OIH - USO – September Crude: I think that the market is now headed for 100. The 131 level is now resistance. 

GLD - December Gold: Gold is headed for 750.  Resistance above the market is at 960. 

SLV - September Silver: Silver broke support at 1750 so I think the market is now headed for 1250.   

Google: The 460-80 range is good support and I expect the market to hold there and begin a move which will carry it over 750. 


TheKing said...

You're expecting Google to go up 65% back to its all time high? Could you please provide a rationale for such an expectation? Given that stock prices tend to increase based on future expectations, I can't understand what Google is planning to merit a 65% gain in stock price, especially considering their recent failures to meet earnings estimates.

Also, could you please provide a time frame for this expectation?

Anonymous said...

It is unusual, however, just how much stocks were up just prior to the release, with the S&P 500 gaining nearly 2% from yesterday's close. Over the past decade, I could find only one other day with such a large gain before the statement was even released – 3/18/08, which rallied into the close then gave it all back the next day. There was one other one with a +1.5% gain prior to the announcement (10/15/98), after which we again rallied into the close then went basically nowhere for a week.

In total, there were 7 days that showed +1% gains prior to the FOMC release. They added on further gains into the close 4 times. But by the next day’s close, only 2 were higher than where the market was prior to the release, and the average return was -0.9%. Taken from the equivalent of today's close to the close three days from now, again 2 of 7 were positive and the average return was -0.6%. Both winners were under 1%, and the risk/reward was titled 2-to-1 to the downside

Anonymous said...

Hi Carl,

Due to the early morning spike up through the buy price and back down again, I’m revising downward my buy points for this week. They are as follows:

Wednesday – 1281.80
Thursday – 1274.40
Friday – 1266.40

Again, Prices must close above that day’s corresponding price for a buy signal to be confirmed. Once the signal is confirmed, then we can expect the next wave of selling to appear at 1317.70, give or take a few ticks.

I believe once we close above these above prices the market should rally briskly.

Thank you.

Kindest regards,


Anonymous said...

Huge equity rally coming. Buy the fed funds futures a 50 basis point cut is a certainty next meeting probably 75 basis point rate cut coming from the fed. The bullish reversal in the bond market today shows interest rates are headed a lot lower. Well below 3% on the 30 year bond stocks will soar after the first bailout of a major bank. Notice how stocks are holding up well today on horrible news!