Watching 1400 $ES_F for a rung on the climb back to 1408

Around the Globe

Asia – CLOSED
• Shanghai (China) +0.05%
• Hang Seng (Hong Kong) +0.00%
• Nikkei (Japan)+0.07%

Europe as of 8:00am EDT

Today's Economic News:

• DAX (Germany) +0.55%
• FTSE (UK) +0.38%

The market had been selling off into the 4am EDT German news.  That bullish news now has us just shy of 1400 ESh.  Some 10am news today should solidify today's trading ranges.

Quote of the day:
A wise man will make more opportunities than he finds. – Sir Francis Bacon

Current Allocations from our room:

Performance Month to Date from our room:

Current Breadth Readings:

ES SP500 Futures Comments:

TLT Twenty Year Bond EFT Comments:

Our breadth has returned to bullish.  We would expect to repeat that today and start to see weakness tomorrow.   The breadth is setup to reveal quickly over the next week if we are in a topping pattern.

In order to get in front of the markets, last week we mad the hypothesis that we are in the process of forming an XYZ top.  I promised some research on that and here is an older post clearly showing the patterns we are looking for: http://www.redliontrader.com/market-forecast/xyz-update-spx-predication-of-lower-prices-ahead-1087/ along with some data.

Here is the line on close $SPX of where we are now:

So keeping to the pattern, we want to see a close today at or near the previous high.  Fall apart on Wednesday and then rally one more time on Thursday and fall on Friday, give or take a day or two.

For today, are interested in taking that short near 1408 ESh and since we think we are heading back up we would pick up longs in the 1390 area.

A good test today will be to see if the bulls can push it up and over that lower high descending trendline, we'll call it 1400.  If we can clear that intraday to and hold the close we think we are all systems go.

US Dollar DX Futures Comments:

We are bullish on the $ from here, watching to see if this 79.50 area can hold.

What can we say about the little ETF that could.  We like the bounce we are taking here.  We are long term very bearish on TLT and think this bounce will be stopped sometime between here and 116.  We will reverse our long and return to a short position there once again.   Our target to get out long is the 114 area. Note that we have been taking profit on are long scaling out.  We think the real money to be made here is on the short side.

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