Quick update

I think the drop from the overnight high at 1208 will end in the 1185-90 zone later today or early on Monday. From that higher low I think the market will resume its move to 1270.

sold both units at 1197.50

Guesstimates on April 30, 2010

June S&P E-mini Futures: Today's range estimate is 1202 - 1215. A swing to 1270 is underway.

QQQ: A move up to 54.00 is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. Resistance is at 1187. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 19.00.

Google: A move that should take GOOG above 700 is underway. It now looks like the drop from the temporary high at 630 will continued down to 505.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Does this look like the chart of a bear market rally?

Here is 10 point per box, three box reversal point and figure chart of the cash S&P index. The low point on the chart is the March 2009 low at 666. Does this chart look like the chart of a bear market rally?

Upswing

Here is a 30 minute bar chart showing day session e-mini trading.

I think the market established an important low yesterday at 1177. What gives me confidence in this judgment?

Take a look at the wide range down bar (in red) sitting in the middle of the first blue rectangle. That bar shows the selling wave that developed on the news of the Portugal downgrade by S&P. Two hours after that news the market began trading sideways. The following day (yesterday) news of the S&P downgrade of Spain sent the market down about 12 points, but by the time of the afternoon Fed announcement all of that break had been recovered and the market closed near its high for the day. Then early today the market opened higher and continued upward. In the process it retraced all of the loss that followed the Portugal news two days ago.

To me this sequence of events reveals a market that shows great resilience in the face of bearish news. The underlying technical condition is very strong - longer time frame traders are more long than normal and short time frame traders are less long than normal. The latter have to bid up prices until longer time frame traders are willing to sell their extra longs to the short time frame traders.

On the chart I have drawn my estimate of the market's current upward trend channel. Over the next few days I expect to see the ES move into the 1225-30 range, near the top of the channel. From there a break of 15-20 points is likely. During the next few weeks the market should move to the top of the second 40 point box I have drawn. The top of this box is just above the 1253 level at which the S&P futures established an important low in March of 2008.

I think the move up from the 1041 low on February 5 will continue for at least another month and possibly well into the summer. The 1270 level is my minimum upside target for the swing up from 1041.

Long second unit at 1201.50

Long one unit at 1197.25

Guesstimates on April 29, 2010

June S&P E-mini Futures: Today's range estimate is 1192 - 1205. A swing to 1270 is underway.

QQQ: A move up to 54.00 is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. It now looks like the drop from the temporary high at 630 will continued down to 505.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Update

So far today the ES has developed a day session range of 1178-89. As I write this the market is trading at 1186, in the upper part of that range. I judge this to be a bullish performance in light of the high volume selling that occurred this morning after Spain's debt was downgraded by S&P. In fact the ES is now trading where it was trading before the news came out.

The financial problems of Greece, Portugal, Spain, and Italy are well known. The market has repeatedly discounted the consequences of this situation but I think it is getting tired of doing so. This sort of bad news has not had much net effect and I think this reveals the underlying strength of the current bull market.

I don't have much of a feel for the price action we shall see the rest of today and tomorrow. (The Fed will make an announcement at 2:15 pm this afternoon.) But I am confident the market is scraping bottom and that a move up to 1270 is imminent.

Guesstimates on April 28, 2010

June S&P E-mini Futures: Today's range estimate is 1174 - 1189. A swing to 1270 should begin from a low near 1175 today or tomorrow.

QQQ: A move up to 54.00 is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. It now looks like the drop from the temporary high at 630 will continued down to 505.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Supply shock ????

Here is a 30 minute bar chart showing day session e-mini trading over the past month. S&P downgraded the debt of Greece and Portugal this morning and this news triggered a high volume, selling avalanche (last red oval). There are two reasons why I believe this action is more likely to mark the end of a corrective phase than the beginning of one.

First, and less important, is the fact that volume, while high, was not as high as the volume on last week's news that the SEC was suing Goldman Sachs (first red oval). Secondly, and more important, is the fact that today's high volume is developing in the middle of a trading box (blue rectangle), not outside the box. I expect the low of the reaction which started from yesterday's 1216.75 high to occur somewhere in the green oval, i.e. in the 1175-85 range. I think we shall see this low within the next day or two.

Once this reaction is complete I expect the ES to resume its rally to 1270 and higher.

Guesstimates on April 27, 2010

June S&P E-mini Futures: Today's range estimate is 1198 - 1210. A swing to 1270 is now underway.

QQQ: A move up to 54.00 is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. It now looks like the drop from the temporary high at 630 will continued down to 505.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 240.

Guesstimates on April 26, 2010

June S&P E-mini Futures: Today's range estimate is 1205 - 1217. A swing to 1270 is now underway.

QQQ: A move up to 54.00 is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 540 is now support.

Apple: Should reach 350 (at least) before the bull market ends.

sold long unit at 1207.25 - time to rest

Long one unit at 1202.25

Guesstimates on April 23, 2010

June S&P E-mini Futures: Today's range estimate is 1198 - 1210. I still think that the 1180 low ended the correction and that a swing to 1270 is now underway.

QQQ: A move up to 54.00 has begun.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 540 is now support.

Never mind!

Earlier today I said that the high volume break below 1190 meant that the market was headed for 1175. But now things look different. A stack of successively lower boxes had formed (the last two are the purple rectangles on the chart). If the market was going to drop to 1175 I don't think it would have broken above the top of the last box near 1195. But it did in fact rally above the top of that box (on a wide range bar to boot) and in doing so put in the biggest rally of the drop from yesterday's early morning top.

Now I think this mornings selling on the news from Greece was a shakeout of weak longs (me included). If I am right about this we should see a stack of higher boxes start to develop. If so the market is now near the top of its second box on the way up from this morning's low. I estimate that the low of this second box is about 1193 and this should be support going forward.

I have drawn a trend channel using the last two lows to give me its slope. I think the market is now headed for 1225 or so (green oval). At that point it will become vulnerable to another 30 point break.

DOWNdate

Here is a thirty minute bar chart showing day session e-mini trading. This morning I was confident that support just below the 1193 level (dash horizontal red line) would hold. But the market dropped below the 1190 level on higher volume than seen during the past couple of days. At that juncture I decided to play defense and so got out of my longs on a small rally.

The fact that 1190 was broken on good volume following a lower top indicates that a drop to the lower channel line is now likely. My best guess is that the ES will drop to 1175 or so before the move up to 1270 begins.

Some of you are wondering whether we saw a supply shock this morning. I don't think so and here are three of my reasons. First, volume (red arrows and oval) was lower than was seen on the downside last Friday (blue oval and arrows). Second, the market is still stuck in a 1180-1210 trading range - today's volume did not come at a new low for the move down from 1210. Finally, the high volume drop during today's first 30 minutes was more than retraced during the subsequent 30 minutes. This retracement would not have been seen if this mornings drop was truly a supply shock.

sold long unit at 1190.25

Long one unit at 1190.25

Guesstimates on April 22, 2010

June S&P E-mini Futures: Today's range estimate is 1191 - 1204. I still think that the 1180 low ended the correction and that a swing to 1270 is now underway.

QQQ: A move up to 54.00 has begun.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 540 is now support.

sold one unit at 1197.00

long one unit at 1201.50

Always darkest before the dawn

Here is my latest post on "The Art of Contrarian Trading".

Guesstimates on April 21, 2010

June S&P E-mini Futures: Today's range estimate is 1197 - 1209. I think that the 1180 low ended the correction and that a swing to 1270 is now underway.

QQQ: A move up to 54.00 has begun.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 540 is now support.

sold longs at 1202.50

UPdate

Here is a point and figure chart showing day session e-mini trading. The box size is one point and this is a 3 point reversal chart.

Yesterday afternoon, after the 1180 low was printed, I thought that this market would continue down to 1175 before it rallied 12-15 points. I also expected a lower low near 1163 later this week.

But shortly afterward the market took off on a strong, 16 point rally and has continued upward today. The fact that by yesterday's close near 1196 the ES had rallied 16 points without even a three point reaction was very bullish (green arrow). In addition, the market closed yesterday above Friday's close and above the last reaction high on the way down to the low (red dash line) - again bullish indications. To these considerations one has to add the fact that the ES closed yesterday well into the range in which heavy selling had occurred Friday. Finally, Monday's 1180 low developed on the lower green dash trend line and also at the point at which the drop from 1210 had slightly exceeded the biggest previous drop on the way up from 1041 (purple rectangle).

All of these considerations entered into my conclusion this morning that the 1180 low ended the drop from 1210 and that the ES had started a move to 1270.

Yes, I know - the market might just pull a U-turn and go right back down again. In such an event I might look a little foolish for buying the ES. But better to look foolish after the fact than to act foolishly before the fact! I am bullish, and can only make money by betting on my bullish views. If the market shows strength when I am basically bullish I have to act accordingly. The worst thing I could do in such a circumstance is to be on the sidelines as the market rallied.

That said I also must acknowledge that the move up from yesterday's low has been fast and only corrected by a six point drop. I think it will approach the 1210 level, perhaps even exceed it slightly, but then will drop 8-10 points before moving higher to new bull market highs.

Long second unit at 1199.75

long one unit at 1199.50

Guesstimates on April 20, 2010

June S&P E-mini Futures: Today's range estimate is 1195 - 1208. Yesterday's late rallied continued to the 1203 level early this morning. It was much bigger than I anticipated and was uncorrected. This leads me to conclude that yesterday's 1180 low ended the correction from 1180 and that a swing to 1270 is now underway.

QQQ: A move up to 54.00 has begun.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

June Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 540 is now support.

Some thoughts

The day session range thus far today has coincided with my range estimate of 1180-93. The market is still acting weak with lower highs and lower lows visible on the 30 minute bar chart. My guess is that the ES will drop to 1175 or so, possibly later today or early tomorrow. But right now I think that tomorrow will be a generally bullish day and that the next rally will be 12-15 points or so.

After that 12-15 point rally ends I would expect the ES to drop to 1163 or so while some bullish divergences start showing on the advancing issues numbers.

I expect the next big swing to be upward to 1270.

Guesstimates on April 19, 2010

June S&P E-mini Futures: Today's range estimate is 1180 - 1193. I expect the drop that started from 1210 to end near 1163 sometime this week. Once the correction is complete a move to 1270 should start.

QQQ: A drop to 48. 80 or so is likely.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: I still think the next big move will take crude oil to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 540 is now support.

Supply shock

Here is a 30 minute bar chart showing day session e-mini trading. News that the S.E.C. is suing Goldman Sachs for mortgage security fraud triggered a supply shock this morning (red arrows). Volume was higher than at any time during the past six weeks (red oval).

This sort of action typically kicks off a sustained move downward. In this case I estimate the downside potential to be 1163, the midpoint between the 2007 top at 1587 and the November 2008 low at 739. My best guess is that this move will take about a week to complete. The first rally is likely to begin from 1181 or so, the level at which the drop from 1210 would equal the biggest drop in the move up from the early February low (purple rectangle) - that drop took the market down 29 points and occurred in late February.

After this correction is complete I expect the ES to begin a move to the 1270 level.

Guesstimates on April 16, 2010

June S&P E-mini Futures: Today's range estimate is 1197 - 1207. It looks like the ES will drop 30 points or more from the 1210-15 target zone.

QQQ: The 50.00 target has been reached and a drop to 48. 80 or so is now likely.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway. 560 is support.

Guesstimates on April 15, 2010

June S&P E-mini Futures: Today's range estimate is 1198 - 1210. It looks like the ES will drop 30 points or more from the 1210-15 target zone.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway.

Relentless

"Relentless" is a good title for the market movie we have watched during the past 10 weeks. The ES has rallied 170 points (16%) without even a single break of as much as 30 points. It is worth comparing this performance with the rallies off of the March 6, 2009 bear market low and off the July 8, 2009 intermediate swing low.

In the former case the ES rallied 134 points (20%) before its first 30 point break set in. In the latter case the ES rallied 150 points (17%) before its first 30 point break. It is also worth noting that the rally off of the March 2009 low eventually carried the ES up 291 points (44%) before its 90 point, June-July 2009 drop. The move up from the July 2009 low carried 282 points (33%) before the drop of 108 points in January-February 2010.

From these observations I draw two conclusions.

First, the market is about due for a break of 30 points or more. It is up 160 points from its February 5 low, more points than either of the two previous upswings put in before their first 30 point breaks. Creative numerology suggests the progression 130 - 150- 170. The ES is also up 16% from its February 5 low without a 30 point break as compared with 20% and 17% for the preceding two swings.

Second, the move up from the February 5 low has a fair amount further to go. Engaging again in creative numerology, we may well see the the pattern 44% - 33% - 22% of percentage gains. A 22% advance off of the February 5 low would carry the ES to 1270. A 280 point advance would carry to 1320.

I think the odds are good that the ES will break 30 points or more from resistance in the 1210-15 zone. The 1214 and 1213 levels (red solid line) are the midpoints respectively of September 2008 rally from 1137 to 1291 and of the drop from the 2007 high at 1587 to the October 2008 low at 837. The July 2008 low which followed the Fannie Mae, Freddie Mac rescues was 1200 (red dash line). I think the 1200 level has yet to make itself felt as resistance and when it does so the market can easily break 30 points or more. Note that the September 2008 low was 1137 and the ES rallied 10 points higher before it broke more than 100 points this past January. A similar performance would have the ES rally to 1210 before the 1200 resistance makes itself felt.

America is back!

Here is my latest post on "The Art of Contrarian Trading".

Guesstimates on April 14, 2010

June S&P E-mini Futures: Today's range estimate is 1193 - 1204. It looks like the ES will reach 1212 before a break of as much as 20 points develops.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway.

Late update

This morning's early weakness made it look like a 20-30 point break had started. But there was no follow through. Instead the market reversed and rallied to new highs for the day, albeit on low volume.

This shows there are still a lot of willing buyers below the market and that sellers don't have much conviction. So I think we shall now see a swing up to 1212 or so before another reaction develops.If this prognosis is correct then support near 1188 will hold.

Revised range estimate is 1181-1192

sold one unit at 1187.00

Long one unit at 1190.50

Guesstimates on April 13, 2010

June S&P E-mini Futures: Today's range estimate is again 1188 - 1200. The 1200 level is strong resistance so a break of 20-30 points is likely to start this week. The dull, listless trading makes me think this market has to go higher to attract enough sellers to generate a break bigger than 20-30 points.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance is now 18.30.

Google: A move that should take GOOG above 700 is underway.

The bigger picture

Here are a couple of daily charts courtesy of StockCharts.com. The upper chart shows the cash S&P 500 for the last two years. The lower chart shows the 5 day moving average of the CBOE equity put-call ratio (red line) and its daily readings (black dots).

On the S&P chart you can see that the average has rallied close to the 1200 level. I think this level will prove to be at least temporary resistance. It was the low point in July 2008 following the collapse of Fannie Mae and Freddie Mac. It is also at the trend line (green dots) drawn through the last two important highs. Now take a look at the chart of the put-call ratio. You can see that the 5 day moving average has dropped to its lowest level in more than a year. This suggests a level of short term bullishness that will have to be corrected before the market can rally further.

For these reasons I think a drop of 20-30 points is likely to develop soon. It may prove to be bigger but even then I think the market will hold above its January top of 1148.

Looking further ahead I think the S&P 500 will manage to rally into the 1230-50 zone (green oval) over the next month or two. That zone marks the confluence of the upper green dash channel line, the low point in March of 2008 following the collapse of Bear Stearns, and the top of the second box of 287 points for this bull market (blue rectangles).

Guesstimates on April 12, 2010

June S&P E-mini Futures: Today's range estimate is 1188 - 1200. I think a break of 20-30 points will begin this week from approximately the 1200 level.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is now 18.30.

Google: A move that should take GOOG above 700 is underway.

sold long unit at 1183.75

Long one unit at 1184.75

Guesstimates on April 9, 2010

June S&P E-mini Futures: Today's range estimate is 1180 - 1193. The ES is on its way to 1200 and above.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is now 18.30.

Google: A move that should take GOOG above 700 is underway.

UPdate

Here is a 30 minute bar chart showing e-mini day session trading. The market has been stronger today than I had expected. Today's low developed at the lower boundary of the rising channel I have drawn. But the market didn't make it down to 1168, the level at which the drop from 1188 would have equaled the length of the last reaction (purple rectangles).

The subsequent rally produced a 30 minute close above yesterday's late rally high and yesterday's initial low point (red dash lines). Since I have a bullish view of the market I have to take this price action as a sign that the drop from 1188 is complete and that we are in the early phase of a move which will carry above the 1200 level during the next couple of weeks.

I think support now stands in the 1174-75 zone. Tomorrow should prove to be a generally bullish day.

Guesstimates on April 8, 2010

June S&P E-mini Futures: Today's range estimate is 1165 - 1177. I think the drop from 1188 will amount to 20-25 points. After it ends the ES should rally to 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is now 18.30.

Google: A move that should take GOOG above 700 is underway.

Guesstimates on April 7 , 2010

June S&P E-mini Futures: Today's range estimate is 1174 - 1185. The ES should reach 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take it to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is now 18.30.

Google: A move that should take GOOG above 700 is underway.

Update

Here is an updated version of the 30 minute bar chart I showed you yesterday. As you can see the e-minis are creeping into the target zone of 1185-90 indicated by the green oval. I think that a break of 15-20 points is imminent. But once it is complete the ES should quickly move to and above the 1200 level.

The market has been very quiet this week. I don't know of any particular explanation for the dullness. But I do know that no top of significance is likely until we see much more trading activity and volatility than the market has shown the past two days.

Guesstimates on April 6, 2010

June S&P E-mini Futures: Today's range estimate is 1173 - 1185. The ES should reach 1200 in April on its way to 1225 or so.

QQQ: A rally to 50.00 and higher is underway.

TYX (thirty year bond yield): I think this market is headed for 5.40%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.50%.

Euro-US Dollar: Support is near 131.00. Resistance above the market is at 141.00. 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.

May Crude: The market has moved visibly above resistance but I still think the next big move will take to 50.00.

GLD – June Gold: The longer term trend has turned downward. I expect gold to drop to 875 over the next few months.

SLV - May Silver: I think silver has started a down move that will carry it to 10.00 over the next few months. Resistance above the market is now 18.30.

Google: A move that should take GOOG above 700 is underway.