Good Morning – RedlionTrader's First Call

Overnight Markets:

Morning links:

Around the Globe

- Shanghai (China) -0.99%
- Hang Seng (Hong Kong) -1.46%
- Nikkei (Japan)-0.61%

Europe as of 6:41am EDT

- DAX (Germany) -0.22%
- FTSE (UK) -0.77%

Sea of RED around the work, another >1% day in Asia

Today's Economic News:

Again we have to say, we don't like the lowering interest rates on the shorter side that we are seeing out of Europe. It shows an un-healthy appetite for low risk and add that to the miss on the Pan Europe Industrial Production number and we see things as still soft in Euro Land.

Quote of the Day:
No one can be free who does not work for the freedom of others.
–Anonymous

Current Breadth Readings: (click here to see all our breadth charts)

The S&P is putting building a bull flag off the last thrust up. That has our Zweig down to the 56 area. We can handle one more day of this and then we will have downside concern. Right now breadth remains in the realm of the bull.

ES SP500 Futures Comments:

Short: 1554
Long: 1538

We have not hit that strange and mournful day yet. The market remains bullish but our heart is not into it and we are watching with a weary eye as we think that bearish reunion is just a motion away.

We are building a bull-flat here and the underneath buying remains strong, teasing us with 0.5% pullbacks, looking weak and then roaring back strong on little or nothing news.

We are still looking for 1% pullback or maybe less. We pushed up that buy area today to 1538 up about 2 points from yesterday. We think we will find some buyers in that area.

This AM we are down about 4 on the gap. China has had two > 1% sell off days in a row now and Europe gives a weak handoff today, so we again will be watching the tape and most importantly those ticks which give us a real-time glimpse of the market action. Yesterday we ended our last hour at +461/-216 on the ticks, there is that 2:1 again. We can't go down as long as that foundational buying exists.

On the upside we have a possible poke through top at 1554. What will get us there? Who knows, maybe there is a bulls favored Pope or maybe a lunch at 5-Guys with Obama, Pelosi, Boehner, Cantor and Reid.

US Dollar DX Futures Comments:

We like that reversal candle below our 82.69 area and are looking to see if the dollar can break out of the bull-flag back up to the 83.10 highs.

TLT Twenty Year Bond ETF Comments:

For entertainment only.

>>> Follow us @redliontrader<<<<<

Breadth Charts In depth:

After we found ourselves out of sync with the markets a week or so ago, sadly we needed to get a downbeat in order to rejoin the dance and get a marker for this market, a way of rejoining the dance. We are now getting that downbeat. It is a small one but it is producing wiggles and waggles for us to detect the dance speed.

The NYSE A/D line closed –1.42:1 yesterday and that pushed our Zweig index down to the 56 area.