Market Overview

Looking For Some Follow Through Power for the Bears.. $ES_F 1520 x 1498

Good Morning – RedlionTrader's First Call for *|MC:DATE|*

Overnight Markets:

Morning links:

Around the Globe

 

    Asia – CLOSED
    • Shanghai (China) -2.97%
    • Hang Seng (Hong Kong) -1.72%
    • Nikkei (Japan)-1.39%

Europe as of 7:25am EDT

    • DAX (Germany) -1.78%
    • FTSE (UK) -1.62%
  •  
  • Yesterday we were all green and today we are bleeding red around the world.

Today's Economic News:

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Just when we were feeling pretty good about ourselves the PMI numbers come in weak from Europe, the USA gets it turn at showing its numbers at 9am this morning.  So far the key countries remain above 50 so that is positive.

The crazy Philly Fed number is out at 10am today along with existing home sales.  Overall, there will be enough data today so that anyone can write their story today, we are still in a soft spot and the markets have run too soon, we are well on our way, the wheels are coming off.. you can write your own ending.  

Quote of the Day:
All good books are alike in that they are truer than if they had really happened.
–Ernest Hemingway

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

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They say that breaking down is hard to do.  Remember when we coiled so tight? And the ES rallied all through the night? Think of all that this market has been through, it makes breaking down hard to do.

We hit below 50 for the first time this year.  We would like to see a good 3 day pull back and then an attempt by the Taurus summit team to take a higher peak.  At that point we will be looking for some serious divergences.  We think the market is too strong still to takes us much below 1500.

 

ES SP500 Futures Comments:

Short: 1520
Long:  1498

Some movement finally, I think our biggest pullback all year.. I didn't measure it because it is about follow through today.  If we bounce and rally then the market isn't ready yet.  We are sticking with our 2% target at the 1498 area looking for some upside buyers there.  Today, in our opinion,  the best the market can do is 1520.  That means for the first time in a long time we have  a 10 point move to the downside on the upper target range.

Breadth took a beating, but the 40 DPI is ready to bounce already, having lead a bearish divergence for a long while.  We believe we are still we ensconced in the topping process and that there is some updrafts left that need to happen before we get a larger correction.

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US Dollar DX Futures Comments:

The dollar blew threw our 80.95/81.00 target where now we think is going to be a support area that will be tested before we explore higher in the 81 region.

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TLT Twenty Year Bond ETF Comments:

The news about “discussing” QE has TLT remaining on the floor.  Without Federal intervention in the future, rates are going to be more able to run, in the meantime though, we think the Fed will do its best to ease, so we still are calling for a rally up to 118.50 area from here.

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Breadth Charts In depth:

On the Zweig we finally broke to the downside and earned our first Zweig reading below 50 this year.  We would like 2 more days of weakness to allow the market to gather itself.

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Nice downside volume on the CVI:

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A plunge on the 40 DPI which is ready to go into upside mode soon we think:

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Still not what we want to see on the NH/NL for downside.  This remains very strong:

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A Bearish Neutral on the McClellan Summation Index:

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The New High / New Low Cumulative remains un-phased:

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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Futures Technicals Markets Trading Ideas

 

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