Tuesday, November 30, 2010

down to 1150 - then up

Here is a daily chart of the cash S&P 500 for 2010. The market made a bull market high near 1227 in early November and since then has been moving lower. I see this drop as a correction within a bull market trend.

The 200 day moving average (red line) continues to move higher and stands below the market at 1133. This is good evidence that the bull market remains intact. The S&P is currently hovering at its 50 day moving average (blue line). Buying opportunities in a bull market generally arise when the market drops a couple of percentage points below its 50 day moving average but remains above its 200 day moving average. I think just such an opportunity lies dead ahead.

If the second leg down within this correction equals the length of the first it will end near 1150 (blue rectangles. This is also the current location of the lower channel line in the green dotted trend channel I have drawn. The purple, rising trend channel has its lower boundary at 1140 currently.

There is even more support in the 1125-1150 zone than this. The midpoint of the advance from the late August low is at 1135. A drop from the November top which equals the length of the last big reaction in August of 2009 would carry the market down to 1135 also. And the breakout level from the May-August 2009 head and shoulders bottom formation is at 1127 (green dash line).

So I think there is very good reason for expecting this reaction to end in the 1130-50 zone, probably closer to the top of this zone than to its lower edge.

Once this drop is complete I think the S&P will be headed for 1300.

Guesstimates on November 30, 2010

December S&P E-mini Futures: Today's range estimate is 1160-80. I think this down leg will carry to 1152 or so. Once the drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: I think the euro will be supported near 130 and from there will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

January Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Monday, November 29, 2010

Guesstimates on November 29, 2010

December S&P E-mini Futures: Today's range estimate is 1166-82. I think this down leg will carry to 1152 or so. Once the drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro broke below 133 support but I think it will be supported near 130 and from there will move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

January Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Friday, November 26, 2010

Guesstimates on November 26, 2010

December S&P E-mini Futures: Today's range estimate is 1180-1191. I am still expecting another down leg which will carry into the 1130-1150 zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

January Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Wednesday, November 24, 2010

Guesstimates on November 24, 2010

December S&P E-mini Futures: Today's range estimate is 1175-1190. I am still expecting another down leg which will carry into the 1130-1150 zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

January Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Tuesday, November 23, 2010

Guesstimates on November 23, 2010

December S&P E-mini Futures: Today's range estimate is 1172-1189. I am still expecting another down leg which will carry into the 1130-1150 zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

January Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Monday, November 22, 2010

update


Here is an hourly bar chart showing the past couple of weeks of 24 hour e-mini trading.

I think the second down leg of this correction started from the overnight high at1206. If it carries the market down as far as the first leg did (54 points) it will end near 1152 (blue dash rectangles). That level is also at the confluence of the lower trend channel line and the 1155.50 low made on October 19 (green oval).

Once the market reaches that target zone I expect the beginning of a move up to and above 1225. The 1300 level is still likely to be reached by April.

Guesstimates on November 22, 2010

December S&P E-mini Futures: Today's range estimate is 1183-1198. I am still expecting another down leg which will carry into the 1130-1150 zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

January Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Friday, November 19, 2010

Guesstimates on November 19, 2010

December S&P E-mini Futures: Today's range estimate is 1183-1197. I am still expecting another down leg which will carry into the 1130-1150 zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Thursday, November 18, 2010

Guesstimates on November 18, 2010

December S&P E-mini Futures: Today's range estimate is 1180-1197. This rally from the 1171 low point will probably be followed by another leg downward which will carry into the 1130-1150 zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Wednesday, November 17, 2010

Guesstimates on November 17, 2010

December S&P E-mini Futures: Today's range estimate is 1166-1184. While I think yesterday's drop was the max momentum day of this break my best guess now is that the ES will move a little lower today, then rally for a couple of days. That rally will then probably be followed by another leg downward which will carry into the 1130-50-zone. Once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 49.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro should find support at 133.00 and the move up to 145.00.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The 1310-20 zone should be strong support for the market. A move to new highs is likely to begin soon.

SLV - December Silver: Support is at 23.50 and a move to new highs should begin from there.

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

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Tuesday, November 16, 2010

update


Here is a daily bar chart of the cash S&P. The market has dropped from its recent top. But this average is still above its rising 200 day moving average (red line) and above its rising 50 day moving average (green line). In a bull market good buying opportunities typically arise when the market gets to or falls a little below a rising 50 day moving average. Right now this moving average is at 1165.

As you can see on my chart page my advancing issues oscillators are all in oversold conditions. This makes me think that the low of this correction will not be far from current levels (green oval). My best guess is that after a rally of 3 days or so the market will make lower correction lows but that the oscillators will diverge bullishly by not doing the same.

Once this correction is over I expect the S&P to resume its march to 1300.

Guesstimates on November 16, 2010

December S&P E-mini Futures: Today's range estimate is 1183-1199. I think a low near 1183 has a good chance of ending the drop from 1224.75. In any case, once that drop is complete the march to 1300 will resume.

QQQQ: Support is at 52.00 and the next upside target is 57.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: I see no sign that the rhythm of the advance has faltered. Next stop is 31.60.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Monday, November 15, 2010

nearly over


Here is a 60 minute bar chart showing 24 hour e-mini trading during the past couple of weeks. I think the drop from 1224.75 is in its terminal phase. I am expecting a final low in the 1180-85 range (green oval).
That target zone is at the confluence of support provided by the 1182 top on October 19 (lower green dash line) and the lower channel line of the red trend channel.

Once this low is in place a move to 1250 or so should start. The March 2008 low was 1253 and it occurred on the Bear Stearns failure. This combination marks that level as strong resistance above the market.

Guesstimates on November 15, 2010

December S&P E-mini Futures: Today's range estimate is 1185-1203. I expect to see the low of this correction this week near 1185. Then the march to 1300 will resume.

QQQQ: Support is at 52.00 and the next upside target is 57.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: I see no sign that the rhythm of the advance has faltered. Next stop is 31.60.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Friday, November 12, 2010

Guesstimates on November 12, 2010

December S&P E-mini Futures: Today's range estimate is 1196-1209. I think a drop to 1187-90 or so is underway. Once it is complete the march to 1300 will resume.

QQQQ: Support is at 52.00 and the next upside target is 57.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: I see no sign that the rhythm of the advance has faltered. Next stop is 31.60.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Thursday, November 11, 2010

Guesstimates on November 11, 2010

December S&P E-mini Futures: Today's range estimate is 1200-1211. I think a drop to 1190 or so is underway. Once it is complete the march to 1300 will resume.

QQQQ: Support is at 52.00 and the next upside target is 57.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: I see no sign that the rhythm of the advance has faltered. Next stop is 31.60.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Wednesday, November 10, 2010

reaction - then higher

Here is an hourly bar chart showing e-mini 24 hour trading. The first attempt at a breakout above the April top at 1216.75 has failed. The subsequent reaction is likely to continue downward to the green oval in the 1190-95 zone. That is the confluence of the lower channel line for the two trend channels I have drawn in red as well as support defined by the October 25 top at 1193.

Once this drop is over I expect the e-minis to resume the move to 1300 and higher. Next significant resistance will be 1250, the level of the March 2008 low made when Bear Stearns failed.

Guesstimates on November 10, 2010

December S&P E-mini Futures: Today's range estimate is 1201-1215. I think a drop to 1190 or so has begun. Once it is complete the march to 1300 will resume.

QQQQ: Support is at 52.00 and the next upside target is 57.50.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: I see no sign that the rhythm of the advance has faltered. Next stop is 31.60.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Tuesday, November 09, 2010

contrarians move back to normal long positions from above average long positions

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

Guesstimates on November 9, 2010

December S&P E-mini Futures: Today's range estimate is again 1212-1225. I think this first attempt at a breakout above the April top at 1216 will fail and be followed by a break of 30-40 points. After that the march to 1300 will resume.

QQQQ: Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: The market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: I see no sign that the rhythm of the advance has faltered. Next stop is 29.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Monday, November 08, 2010

Here is a weekly bar chart of the cash S&P 500. Last week the market reached new highs for the bull market which began from the 666 level in March of 2009. I have drawn a parallel trend channel which I think has a good chance of encompassing this new bull market up leg.

In this previous post I explained how Lindsay's three peaks and a domed house formation predicted a top for early April, 2011. I have drawn a green oval at the top of the trend channel centered on the early April target date. This target zone is roughly the 1450 level. Such an advance would be a 25% rally from current levels and a 45% move up from the July 2010 low. That is where I think this market is headed.

Guesstimates on November 8, 2010

December S&P E-mini Futures: Today's range estimate is 1212-1225. I think this first attempt at a breakout above the April top at 1216 will fail and be followed by a break of 30-40 points. After that the march to 1300 will resume.

QQQQ: Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50 has been reached. I see no sign that the rhythm of the advance has faltered. Next stop is 29.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Friday, November 05, 2010

Guesstimates on November 5, 2010

December S&P E-mini Futures: Today's range estimate is 1210-1225. I think this first attempt at a breakout above the April top at 1216 will fail and be followed by a break of 30-40 points. After that the march to 1300 will resume.

QQQQ: Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50 has been reached. I see no sign that the rhythm of the advance has faltered. Next stop is 29.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Thursday, November 04, 2010

bond frenzy redux

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

Guesstimates on November 4, 2010

December S&P E-mini Futures: Today's range estimate is 1198-1212. I think this first attempt at a breakout above the April top at 1216 will fail and be followed by a break of 30-40 points. After that the march to 1300 will resume.

QQQQ: Next upside target is 54.00.

TYX (thirty year bond yield): The thirty year yield has dropped well below long term support at 3.85%. I think the market is at a juncture like that of December 2008 - fast drop in yield that will be followed by a fast rise. The bonds will soon begin a move to 5.40%.

TNX (ten year note yield): The 10 year yield has dropped more than I expected. Still, I think the next big move in yields will be upward. I think that the notes will soon begin a swing up to 4.50%.

Euro-US Dollar: The euro shows no signs of a top. Next target is 143.50.

Dollar-Yen: A drop into the 78.00 - 79.00 range is underway and I think an important low will form in that zone.

December Crude: I still think crude oil is headed for 50.00.

GLD – December Gold: Upside target is 1380 has been reached but the market still has the bit between its teeth. Next upside target is 1480.

SLV - December Silver: Next upside target is 26.50.

Google: The 475 level is support. A move that should take GOOG above 700 is underway.

Apple: Should reach 350 (at least) before the bull market ends. Support is at 265.

Wednesday, November 03, 2010

Prepare for QE II, III, IV, V,.....

The Fed's announcement today tells me that they are about to get serious about restoring robust levels of economic growth. Yesterday's election results mean that they won't be getting much help from fiscal policy. So I think the market is going to start anticipating further rounds of "quantitative easing" (QE) on the part of the Fed.

This should send the dollar into the tank (I am guessing 65-68 on the dollar index), gold and silver upward, long term bond prices down and long term interest rates up, and the stock market WAY up.

Once it becomes obvious that economic growth has been restored and unemployment comes down below 7% I think QE will cease. At that point the markets will probably all suffer a big reversal and in particular a bear market in stocks will become likely.

Update


Here is an hour bar chart of 24 hour e-mini trading. I last commented on this chart here.

The market is in the process of easing out of the 1155-93 trading range which has contained it for 3 weeks. I still think a brief dip to the 1180-85 area is likely before a rally develops which will take the e-minis to and above the April 1216 top (horizontal red line).

This market has been rallying for 4 months. Yet at the moment my 5 and 10 day advancing issues oscillators have just started to rally from oversold conditions. This makes me believe that the ES will move above 1216 before it breaks as much as 30 points.

I want to reiterate my view that this is a bull market, one which began from the March 2009 low at 666. It has much further to go. My most conservative estimate is 1300 by April 2011.