Wednesday, February 11, 2009
Guesstimates on February 11, 2009
March S&P E-mini Futures: I think the e-minis are headed for 805 and possibly lower. Resistance today stands near the 834 level.
QQQ: Support is at 29.00 and the next upside target is 32.50.
March Bonds: The bonds have dropped into the 126-27 target zone. The next big move in this market should be upward. Any significant weakness below 125 will mean that a bear market is underway.
March 10 Year Notes: The notes have yet to reach our 120 target. We think a substantial rally is imminent, but weakness below 120 would mean that a bear market is underway.
Euro-US Dollar: The euro has traded sideways after dropping as low as 127.50. I think a rally to 137 or so is underway.
Dollar-Yen: I think the 87.50 level will hold and that a rally to 100.00 is underway.
March Crude: The 50.00 level is resistance and I think March crude will drop down into the 30-35 zone.
GLD – April Gold: The 935 level is resistance. At this juncture a drop below 870 will mean that a move down into the 550-600 range is underway.
SLV - March Silver: The next stop will be 1325. I think the next big move will carry this market downward to 650.
Google: Resistance stands at 375. I think that its drop from 747 is over.
Tuesday, February 10, 2009
Wave Chart at 2:45 pm
Here is today's wave chart for the e-minis. It looks like selling pressure is gradually easing. The down waves are getting shorter, making smaller inroads into new low territory, and the volume is gradually dropping with each downward thrust.A move above resistance line A will mean that the market is headed at least for B and quite possibly for C. I think the next rally will amount to 15 points or so, but it should be followed by another substantial drop.
Wave Chart at 12:15 pm
Here is today's wave chart for the e-minis. The trend is clearly downward and we have seen a high volume supply shock today. The market has already rallied about 8-9 points on three separate occasions (blue rectangles). My guess is that the current rally will be a little bigger but it probably won't go much past resistance (purple dotted line) at 842.75.I think we will see the e-minis trading at 825 before the day is done. My initial downside target for the drop from 873 is 805.
Supply Shock
Here is a thirty minute bar chart showing day session e-mini trading for the past week. You can see that a supply shock developed after the Treasury announcement at 11:00 am this morning (red arrows). This means that the short term trend is definitely downward and should carry the market down at least to 825 and probably lower than that.
Wave chart at 11:05
Here is the e-mini wave chart as of 11:05 am. The Treasury announced its latest financial rescue plan at 11:00 am. The initial market response sent the e-minis up exactly to the resistance level mentioned in the last post although this frankly surprised me. The market came off immediately and five minutes later a huge volume of sales sent it below 850. I covered at 847.50 because a market like this is hard to read.Resistance now is at 853 (lower purple dotted line). We have already had two 9 point rallies today and I like to use that as a measuring stick for subsequent rallies. I see temporary support at 840 and a rally from there will probably peter out at 848-50.
Wave chart at 10:30 am
Here is the e-mini wave chart for yesterday's and today's day sessions. It is clearly bearish. Not only is there an obvious sequence of lower lows and lower highs, but the latest down wave was longer than the preceding down wave and the last up wave was shorter than the up wave that preceded it. Moreover the highest volume bar of the past two days occurred as a down bar on the latest down wave.Resistance is at the midpoint of this morning's rally, roughly 862 (dotted purple line). That rally was about 9 points in length (first blue rectangle) and a rally from the current low at 853.25 of that length (second blue rectangle ) would also carry the market to 862.
However, if this market is as weak as I think it is I don't think we'll see a rally as big as even 8 points until the e-minis drop to 845 or so.
Out at 858.00
Guesstimates on February 10, 2009
March S&P E-mini Futures: Any high volume selling which drives the market below the 859 level today would be short term bearish. In the meantime I shall maintain my short term bullish stance and try to get long near the open. Whatever its short term direction I still think that this market is headed for 1000.
QQQ: The short term trend is upward and the next upside target is 32.50.
March Bonds: The bonds have dropped into the 126-27 target zone. The next big move in this market should be upward. Any significant weakness below 125 will mean that a bear market is underway.
March 10 Year Notes: The notes have yet to reach our 120 target. We think a substantial rally is imminent, but weakness below 120 would mean that a bear market is underway.
Euro-US Dollar: The euro has traded sideways after dropping as low as 127.50. I think a rally to 137 or so is underway.
Dollar-Yen: I think the 87.50 level will hold and that a rally to 100.00 is underway.
March Crude: The 50.00 level is resistance and I think March crude will drop down into the 30-35 zone.
GLD – April Gold: The 935 level is resistance. At this juncture a drop below 870 will mean that a move down into the 550-600 range is underway.
SLV - March Silver: The next stop will be 1325. I think the next big move will carry this market downward to 650.
Google: Resistance stands at 375. I think that its drop from 747 is over.
Monday, February 09, 2009
Wave Chart at 3:30 pm
Here is today's e-mini wave chart as of 3:30 pm.The market has rallied strongly from its reaction low although at the moment volume is not too impressive. Even so the up wave is longer than the last up wave and the market has recovered its support level at 864. I think support now has moved up to the midpoint of today's reaction - roughly the 866.50 level (purple dotted line). As long as the market holds that level I think it is preparing for a breakout above 876.
Wave Chart at 2:30 pm
Here is today's wave chart for the e-minis. After selling my long position at 872.50 this morning I repurchased my longs at the first two horizontal red arrows. I was leaning on support at the purple dotted line and the wave chart still looked bullish, although at the second arrow we had already seen an up wave that was shorter than the preceding one. I sold my longs at the third horizontal red arrow because now the wave chart looked bearish - the market put in a longer down wave after a shorter up wave - and trading volume looked like it was increasing on a wide range down bar below support.I still think this may simply be an extended reaction in a short term uptrend, but weakness below the 859 level would mean that a drop of 35-50 points (at least) is underway.