Thursday, February 04, 2010

Guesstimates on February 4, 2010

March S&P E-mini Futures: (Still long one unit from 1090.75) I think Friday's 1066 low ended the drop from 1148. Today's range estimate is 1083-1096. I expect a move to 1200 to develop over the next two or three months.

QQQ: A rally to 50.00 has begun.

TYX (thirty year bond yield): I think this market is headed for 5.00%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.30%.

Euro-US Dollar: Resistance above the market is at 144.00. Support is at 137.50. Looking further ahead I think that a drop to 125 is likely over the coming months.

Dollar-Yen: A rally to 100.00 is underway. Support is at 90.00.

March Crude: I think the market is headed for 50.00.

GLD – April Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months. Resistance above the market is at 1170. Any strength above that level would mean that the market is instead headed for 1250.

SLV - March Silver: I now think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is at 19.40.

Google: The next significant move should take GOOG above 700.


Unknown said...


I believe Wave B down of this Wave II retracment will conclude today and we will go no lower than 1087 or so before we start Wave C up. Wave C up should take around 3 days before concluding and end around 1118. Why 1118? Wave A went from 1171 to 1104 or 33 points. As such is Wave B ends at 1087 and I add 31 points. Alternatively, we have a couple of unfilled gaps around 1127 and 1130 on the cash index. I'm not ruling out that these levels won't first get filled first before completing Wave C in an effort to flush out the bears. However, I still expect a larger Wave III to commence by Wednesday/Thurday of next week. If I'm right, per my calculations, a stronger Wave III down will be 1.618 x Wave I down, which we saw a 79 point decline(1150-1171). As such, I think Wave III will end down around 120-130 points and measure to the 980-990ish level by the end of February. From there, Wave IV up will see a 38.2% retracement up of Wave III's decline 50 points up to 1040. Thereafter, Wave V down should then be at least another 80-120 points to 920-960, but probably a bit lower. Overall, I think this larger Wave I down (5 subwaves) within Wave C will conclude around the end of March before we see a decent 2 month climb as part of a larger Wave II action.

To show I am not married to my plan, I will know I'm wrong if we materially go above the 1130 level on Wave C up. If this is the case Wave C up isn't Wave C, but rather Wave III up of a larger 5 Wave process that would take us to new highs. In this instance, I'd obviously be long.

I imagine if you see us headed under 1070, you would abandon your long view and join the 'dark' side by going short.

Whichever way the wind blows, I'm convinced we will know which direction we are headed within the next week.

Good luck to all.


P.S. - At the open, I will be selling my SDS and slowly buying SSO tranches as we approach the 1087 level. Any break below 1086 today means this mini-climb is over; however, I think we are too short-term oversold for this to occur.

Perhaps today's activity will closely resemble that of yesterday...a bunch of backing and filling to complete this Wave B action.

If so, I find it interesting to see both A and B have zig zag(min ABC) patterns, which is what I would also expect in Wave C up

Unknown said...

looks like wave c up completed yesterday. any trade below 1075 will confirm wave iii down below 1000 is underway.

Anonymous said...

jeff, wave ii is not yet over because it has not had enough time. We should see a wave c of ii up before and any further downside action. We should turn around before the low of 1066.50.