Today’s Economic News:
Mixed data from Europe and the UK today, but mostly good. In the US today, the initial jobless claims, of course, and home sales at 10am ET.
Quote of the Day:
It could probably be shown by facts and figures that there is no distinctly native criminal class except Congress.
–Mark Twain
Featured Breadth Chart of the Day:
We have been watching the 40 DPI this week to see if it tracks like the DPI recovery from November. Right now, we think the summer market from 2012 is a better model.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
Short: 1606
Long: 1583
ES made it down 7.6% from the highs. That is a decent correction and now we have recovered about 2.5% from that low (1553).
Tuesday, we had 1588 for the top which was a good call, yesterday we had 1597, which did hold for most of the day. Today, we push that up to 1606. We don’t think it is all uphill from here and would expect to see at least 1583 tested soon.
MiM Update:
Was yesterday a repeat of the day before? That was the theme of emails yesterday as, again, we opened the tracking period with a strong sell-side imbalance in both size and percentage, yet we watched price creep up a little again. It never did take off like on Tuesday and by 3:20 the upside had basically stalled and a patient entry there gave you about 2.5 points. I took 2.25 out of ES with a 1599 entry.
If you waited for the reveal fade and entered at 3:40pm, you took almost as much and were certainly more efficient. This is the third day in a row of decent selling and, although the market has succumbed into the closing bell, the lateness and the lack of size are worth noting.
We are all trading for the first time into the closing of the quarter so keep sharing so we can all learn together.
Comments about the Front US Dollar DX futures contract:
What a ride on that dollar. 83.42 on the upside and looking for a test of the 82.80 area.
Comments about TLT (Twenty year Bond ETF):
TLT is tightening. Watch 108 for a hold, if not it will be a retest at the 107.30 area.
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Breadth Charts in Full :
Zweig Breadth Thrust:
We should get a fold down at some point and we can study that test.
Cumulative Volume Index:
Nothing.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
This is our featured chart.
New Highs / New Lows ratio chart :
We did 69 new highs yesterday, they need to start coming back if the bulls want to drive this higher.
Trenders :
Short Term Trender - McClellan Summation Index:
We have the chart continuing bearish.
Long Term Trender - Cumulative 4-week Highs – Lows (the fat lady):
Fat Lady continues to be bearish. We think there is some more shaking involved as the bears try to snap the neck of the bull.
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader