Guesstimates on June 5, 2012

June S&P E-mini Futures: Today's range estimate is 1266-80. The market has dropped 25 points below the may 21 low at 1287.25, more than I would expect to see during a base building period. A  fast move back above 1287 is likely and if it occurs then the short term picture will be very bullish. Given the heavily bearish market sentiment I think that a big rally is imminent.  

QQQ:  Support now is at 59.50. The drop from 68.50 is nearly over and should be followed by a move to new bull market highs.

TNX (ten year note yield):  The 10 year yield had dropped below  the low of its recent multi-month trading range. I suspect that QE III is just around the corner. If it is yields will head back up to 3.00% and higher.   

Euro-US Dollar: The market is bouncing off of 1.2250 support. I see no sign that the decline is over. Indeed EU survival will require a much lower euro than we see now. I think the market will eventually drop well below 1.1500.   

Dollar-Yen: This market is headed for 75 and lower.

July  Crude: The market is headed  down to  75.   

GLD – August Gold:   The market has dropped to the vicinity of the September and December low points at 1544 and 1529. I think a sustained up move is about to start.  

SLV - July Silver: The market is getting close to its December low at 26.27 where a sustained move up is likely to start.

Google: Google broke support at 590 and is now headed for its January low at 562. From there the market should resume its move up to 750.

Apple: So far AAPL has held well above its low at 528 (I think the reported 522.16 low was a bad tick!) even as the S&P and the Dow have broken below their corresponding lows. This is a very bullish development. It makes me think the AAPL is now in fact headed above its 644 top instead of to 520 as I had thought previously. 

Guesstimates on June 4, 2012

June S&P E-mini Futures: Today's range estimate is 1270-1285. The market has dropped 25 points below the may 21 low at 1287.25, more than I would expect to see during a base building period. A  fast move back above 1287 is likely and if it occurs then the short term picture will be very bullish. Given the heavily bearish market sentiment I think that a big rally is imminent.  

QQQ:  Support now is at 59.50. The drop from 68.50 is nearly over and should be followed by a move to new bull market highs.

TNX (ten year note yield):  The 10 year yield had dropped below  the low of its recent multi-month trading range. I suspect that QE III is just around the corner. If it is yields will head back up to 3.00% and higher.   

Euro-US Dollar: The market is bouncing off of 1.2250 support. I see no sign that the decline is over. Indeed EU survival will require a much lower euro than we see now. I think the market will eventually drop well below 1.1500.   

Dollar-Yen: This market is headed for 75 and lower.

July  Crude: The market is headed  down to  75.   

GLD – August Gold:   The market has dropped to the vicinity of the September and December low points at 1544 and 1529. I think a sustained up move is about to start.  

SLV - July Silver: The market is getting close to its December low at 26.27 where a sustained move up is likely to start.

Google: Google broke support at 590 and is now headed for its January low at 562. From there the market should resume its move up to 750.

Apple: So far AAPL has held well above its low at 528 (I think the reported 522.16 low was a bad tick!) even as the S&P and the Dow have broken below their corresponding lows. This is a very bullish development. It makes me think the AAPL is now in fact headed above its 644 top instead of to 520 as I had thought previously. 

Guesstimates on June 1, 2012

June S&P E-mini Futures: Today's range estimate is 1275-1290. The October 2011 top at 1289.25 is strong support. I think a base building period is nearly complete. The drop this morning on the employment news below the May 21 low sets ups bullish divergences on my advancing issues oscillators. Given the heavily bearish market sentiment I think this means that a big rally is imminent.  

QQQ:  Support now is at 59.50. The drop from 68.50 is nearly over and should be followed by a move to new bull market highs.

TNX (ten year note yield):  The 10 year yield is back to the low of its recent multi-month trading range. I still think that the 10 year yield has started a move to  3.00%.  

Euro-US Dollar: The Euro has reached 126.00 support.  I think the market will drop to 1.2250 before any rally of more than 200 pips develops.  

Dollar-Yen: This market is headed for 75 and lower.

July  Crude: The market is headed  down to  75.   

GLD – August Gold:   The market has dropped to the vicinity of the September and December low points at 1544 and 1529. I think a sustained up move is about to start.  

SLV - July Silver: The market is getting close to its December low at 26.27 where a sustained move up is likely to start.

Google: Google broke support at 590 and is now headed for its January low at 562. From there the market should resume its move up to 750.

Apple: So far AAPL has held well above its low at 528 (I think the reported 522.16 low was a bad tick!) even as the S&P and the Dow have broken below their corresponding lows. This is a very bullish development. It makes me think the AAPL is now in fact headed above its 644 top instead of to 520 as I had thought previously. 

lots of bears

Here is a pair of charts which illustrate the extent of bearish sentiment prevailing in the market now.

The top chart shows the  weekly reading (blue line) and its five week moving average (red line) of the AAII investor sentiment survey. The numbers shown on the graph are the percentage of bears divided by the sum of the percentages of bears plus bulls (so neutral opinions are ignored). You can see that both numbers now are at levels last reached at the 2010 and 2011 low points.

The chart right above this post shows the 10 day moving average of the equity put-call ratio on the CBOE. At the May 21, 2012  low point this moving average had reached the high points last seen at the 2011 lows thus showing that the volume of put trading had risen to high levels relative to the volume of call trading. This in turn is an indication of unusually high levels of bearish sentiment.

That trader sentiment is so bearish is remarkable because the drop from the March-April highs in the Dow and the S&P has been less than half as big in percentage terms as the 2011 break. The modest size of this latest break is telling us that the market thinks it has already discounted the worst that is likely to happen in Europe, and in fact did this last year. But people are responding to the news from Europe in the papers today more that the action of the market itself. This is an example of traders "fighting the last war", not the one they currently face.

I think this bearish sentiment is telling us that a big rally is imminent and will probably take the averages to new bull market highs.

Guesstimates on May 31, 2012

June S&P E-mini Futures: Today's range estimate is 1302-1314. The October 2011 top at 1289.25 is strong support. I think a base building period is underway.  Once it is completed the next sustained swing will be upward to new bull market highs.

QQQ:  Support now is at 59.50. The drop from 68.50 is nearly over and should be followed by a move to new bull market highs.

TNX (ten year note yield):  The 10 year yield is back to the low of its recent multi-month trading range. I still think that the 10 year yield has started a move to  3.00%.  

Euro-US Dollar: The Euro has reached 126.00 support.  I think the market will drop to 1.2250 before any rally of more than 200 pips develops.  

Dollar-Yen: This market is headed for 75 and lower.

July  Crude: The market is headed  down to  75.   

GLD – August Gold:   The market has dropped to the vicinity of the September and December low points at 1544 and 1529. I think a sustained up move is about to start.  

SLV - July Silver: The market is getting close to its December low at 26.27 where a sustained move up is likely to start.

Google: Google broke support at 590 and is now headed for its January low at 562. From there the market should resume its move up to 750.

Apple: AAPL is headed for 520. From there  a move above the 644 high will start. 

Guesstimates on May 30, 2012

June S&P E-mini Futures: Today's range estimate is 1311-1325. The October 2011 top at 1289.25 is strong support. I think a base building period is underway.  Once it is completed the next sustained swing will be upward to new bull market highs.

QQQ:  Support now is at 59.50. The drop from 68.50 is nearly over and should be followed by a move to new bull market highs.

TNX (ten year note yield):  The 10 year yield is back to the low of its recent multi-month trading range. I still think that the 10 year yield has started a move to  3.00%.  

Euro-US Dollar: The Euro has reached 126.00 support.  I think the market will drop to 1.2250 before any rally of more than 200 pips develops.  

Dollar-Yen: This market is headed for 75 and lower.

July  Crude: The market is headed  down to  75.   

GLD – August Gold:   The market has dropped to the vicinity of the September and December low points at 1544 and 1529. I think a sustained up move is about to start.  

SLV - July Silver: The market is getting close to its December low at 26.27 where a sustained move up is likely to start.

Google: Google is now headed for its 2007 top near 750. Support is at 590.    

Apple: AAPL is headed for 520. From there  a move above the 644 high will start. 

Guesstimates on May 29, 2012

June S&P E-mini Futures: Today's range estimate is 1316-1329. The October 2011 top at 1289.25 is strong support. I think a base building period is underway.  Once it is completed the next sustained swing will be upward to new bull market highs.

QQQ:  Support now is at 59.50. The drop from 68.50 is nearly over and should be followed by a move to new bull market highs.

TNX (ten year note yield):  The 10 year yield is back to the low of its recent multi-month trading range. I still think that the 10 year yield has started a move to  3.00%.  

Euro-US Dollar: The Euro has reached 126.00 support.  I think the market will drop to 1.2250 before any rally of more than 200 pips develops.  

Dollar-Yen: This market is headed for 75 and lower.

July  Crude: The market is headed  down to  75.   

GLD – June Gold:   The market has dropped to the vicinity of the September and December low points at 1544 and 1529. I think a sustained up move is about to start.  

SLV - July Silver: The market is getting close to its December low at 26.27 where a sustained move up is likely to start.

Google: Google is now headed for its 2007 top near 750. Support is at 590.    

Apple: AAPL is headed for 520. From there  a move above the 644 high will start.