Market Overview

One More Turn.. We are Watching for Follow Through to See if We Can Get the Fat Lady to Sing

Good Morning – RedlionTrader's First Call
Overnight Markets:

Morning links:

 

 

Around the Globe

 

    Asia – CLOSED

Shanghai (China) -1.40%

Hang Seng (Hong Kong) -1.32%

Nikkei (Japan)-2.26%

Europe as of 6:52am EDT

  • DAX (Germany) -1.85%
  • FTSE (UK) -1.34%
  •  
  • What a difference a day makes?  All green yesterday and now all red.

Today's Economic News:

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We get another shot at house prices this morning pre-market and again at 10am along with some consumer confidence, the Richmond mfg index and uncle Ben, going to be busy at 10am ET. 

 

Quote of the Day:
Nobody understands anyone 18, including those who are 18.

Jim Bishop
 

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

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We are going to do 2 charts this AM.  Our Zweig as we are now calling for an oversold reading in the next few weeks.  That means we need to drive the index below 40, which requires stringing together some selling.

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That being said above, this New High/ New Low ratio chart has us very surprised as it remains quite strong, we should be seeing readings below 40 on moves likes these.  There is still too many stocks making new highs, so we think there might be one more upside move left in this market.

 

ES SP500 Futures Comments:

Short: 1514
Long:  1476

The upper area we had yesterday right near the open capped the market and we had another rare trend down day.  At least rare for this year.   We think there is gong to be another summit attempt for the top left in this market based on the strength of the market that brought us here and the current state of the breadth indicators.  We are not so sure that the bears have control yet, in fact we don't think so.  We like another push just a bit lower to that 1476 area and then we want to see some bargain hunters get into the market and ride an express back up to the 1514 area.  Most likely not all today.

The bears so far have just been one day wonders, so follow through is key for them to garner any respect whatsoever.   Holding the markets below 1510 for a few days would also be a pretty good sign that things are a changing.   For today we think maybe a bit more calmer (40 handles yesterday, wow).  We think some  babies got thrown out yesterday and investors will be out there picking them up today, that should keep a lid on the day. 

 

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US Dollar DX Futures Comments:

Yesterday's 81.97 target was hit and next to the upside is 82.15.  We think we should get some corrective action between here and there down to at least the 81.40 area.

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TLT Twenty Year Bond ETF Comments:

We have been stubborn on the TLT call waiting for that 118.50 target for a few weeks now.  We didn't think we would get it all in one day though!  What a run in TLT, I think we will let it settle out for a day before we start collecting new data.  

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Breadth Charts In depth:

On the Zweig we are now looking for an oversold below 40 reading, that would mean string together some selling days.  We think there could be one more up elevator before we head to the bargain basement though.

rimage

 

The CVI, again is telling us the selling volume is much greater the the buying volume on up date

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Our 40 DPI continues to correct

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This is a bit of a surprise… The NH/NL stays pretty cool.. we need a 2nd day on this one.. but it speaks a bit bullish still.

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Our McClellan remains bearish and the fat lady is still waiting on the sidelines waiting to make the call.

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FatLady is getting close though.. getting exciting.

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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 Forex Markets Trading Ideas

 

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