Guesstimates on January 31, 2012

March S&P E-mini Futures: Today's day session range estimate is 1310-1324. The persistent rally from yesterday's 1296 low makes me think that it ended a drop of 34 points, why of my minimum expectation of 40 points, and that a move to 1330 and higher is underway. The longer term trend is upward. A rally from the November 25 low at 1147.50 which matches the size of the October rally would bring the ES to 1370.

QQQ: Headed for 63.

TNX (ten year note yield): The 10 year yield has started a move to 2.50%.

Euro-US Dollar: The rally from 1.2623 should continue to 1.3540 before the market turns down once more. Meantime support is at 1.2940.

Dollar-Yen: The market is headed down to 70.00. Resistance above the market is at 80.00.

March Crude: An extended upswing is underway. It will probably take crude to 114 or so.

GLD – April Gold: I think gold will probably drop to 1510 or so and then begin a move to 2100.

SLV - March Silver: I think silver is headed for 50.00. Support is at 26.00.

Google: Google is now headed for its 2007 top near 750.

Apple: Upside target is now 475.

Guesstimates on January 30, 2012

March S&P E-mini Futures: Today's day session range estimate is 1296-1308. A drop of 40-50 points is underway. The longer term trend is upward. A rally from the November 25 low at 1147.50 which matches the size of the October rally would bring the ES to 1370.

QQQ: Headed for 63.

TNX (ten year note yield): The 10 year yield has started a move to 2.50%.

Euro-US Dollar: The rally from 1.2623 should continue to 1.3540 before the market turns down once more. Meantime support is at 1.2940.

Dollar-Yen: The market is headed down to 70.00. Resistance above the market is at 80.00.

March Crude: An extended upswing is underway. It will probably take crude to 114 or so.

GLD – April Gold: I think gold will probably drop to 1510 or so and then begin a move to 2100.

SLV - March Silver: I think silver is headed for 50.00. Support is at 26.00.

Google: Google is now headed for its 2007 top near 750.

Apple: Upside target is now 475.

Guesstimates on January 27, 2012

March S&P E-mini Futures: Today's day session range estimate is 12990-1314. A drop of 40-50 points is underway. The longer term trend is upward. A rally from the November 25 low at 1147.50 which matches the size of the October rally would bring the ES to 1370.

QQQ: Headed for 63.

TNX (ten year note yield): The 10 year yield has started a move to 2.50%.

Euro-US Dollar: The rally from 1.2623 should continue to 1.3540 before the market turns down once more. Meantime support is at 1.2940. The Fed announcement has made the market reassess its estimate of likely interest rate differentials between the EU and the US . It now expects EU rates to be relatively higher than it previously thought.

Dollar-Yen: The market is headed down to 70.00. Resistance above the market is at 80.00.

March Crude: An extended upswing is underway. It will probably take crude to 114 or so.

GLD – February Gold: I think gold will probably drop to 1510 or so and then begin a move to 2100.

SLV - March Silver: I think silver is headed for 50.00. Support is at 26.00.

Google: Google is now headed for its 2007 top near 750.

Apple: Upside target is now 475.

Guesstimates on January 26, 2012

March S&P E-mini Futures: Today's day session range estimate is 1320-1333. The longer term trend is upward. A rally from the November 25 low at 1147.50 which matches the size of the October rally would bring the ES to 1370.

QQQ: Now headed for 63.

TNX (ten year note yield): The 10 year yield has started a move to 2.50%.

Euro-US Dollar: Support is at 1.2620 has produced a big rally. It should continue to 1.3540 before the market turns down once more. A move to 1.2400 will then be in the cards. The Fed announcement yesterday has made the market reassess its estimate of likely interest rate differentials between the EU and the US . It now expects EU rates to be relatively higher than it previously thought.

Dollar-Yen: The market is headed down to 70.00. Resistance above the market is at 80.00.

March Crude: An extended upswing is underway. It will probably take crude to 114 or so.

GLD – February Gold: I think gold will probably drop to 1510 or so and then begin a move to 2100.

SLV - March Silver: I think silver is headed for 50.00. Support is at 26.00.

Google: Google is now headed for its 2007 top near 750.

Apple: Upside target is now 475.

Fed Failure

Today at 12:30 pm the Fed announced that it expected short term interest rates to stay near zero for the next two years.

Very low short term interest rates are always associated with weak economic activity. So the Fed is telling us that it expects to fail. It has announced that it believes all of its efforts during the past two years to stimulate the economy will come to naught.

Of course the Fed may be wrong about this. Indeed, its economic forecasting record is no better than anyone else's despite the enormous resources it devotes to such activity. But the sad thing is that the US central bank seems content to fail. I don't get it.

Headed higher

Here is a daily bar chart showing trading in the March '12 e-minis going back to the October 4, 2011 low. I still think the market is headed higher. A rally from the November 25 low which matches the size of the initial 221 point rally off of the October low would carry the ES to 1370 or so, just about the level of the May 2011 top (blue dash rectangles).

The 5, 10, and 20 day advancing issues oscillators on my chart page are overbought and showing bearish divergences. At the same time the 5 day moving average of the CBOE equity put-call ratio (also on my chart page) is at its lowest level in more than 6 months. Moreover, the AAII sentiment survey shows more bullish sentiment than at any time during the past year. This indicator configuration suggests that a break bigger than any seen since the 71 point break in December is imminent.

A repetition of that last 71 point drop would bring the ES down to 1250 or so (purple dash rectangles). That level is also at the confluence of the lower trend lines of the red and green dash trend channels I have drawn on the chart. I doubt that any such reaction will last more than two weeks or so and expect the market to quickly recover and head into the target zone outlined by the green oval.

Guesstimates on January 25, 2012

March S&P E-mini Futures: Today's day session range estimate is 1298-1310. It looks like the market is about to break at least 40-50 points . The longer term trend is upward. A rally from the November 25 low at 1147.50 which matches the size of the October rally would bring the ES to 1370.

QQQ: Now headed for 63.

TNX (ten year note yield): The 10 year yield has started a move to 2.50%.

Euro-US Dollar: Support is at 1.2620 and a move to 1.2400 is in the cards. . Resistance above the market is at 1.3030 . I think the Euro is "decoupling" from the European and US stock markets because the European Central Bank has made an implicit commitment to provide whatever liquidity is necessary to the EU banking system.

Dollar-Yen: The market is headed down to 70.00. Resistance above the market is at 80.00.

March Crude: An extended upswing is underway. It will probably take crude to 114 or so.

GLD – February Gold: I think gold will probably drop to 1510 or so and then begin a move to 2100.

SLV - March Silver: I think silver is headed for 50.00. Support is at 26.00.

Google: Google is now headed for its 2007 top near 750.

Apple: Upside target is now 475.