Bulls Need to Hold $ES_F 1575 Area… No One Expects Upside Follow-Through, Right? 1588 x 1560

Today's Economic News:

Quote of the Day:
We need not all agree, but if we disagree, let us not be disagreeable in our disagreements.
–Martin R. DeHaan

Isn't that a song?

Featured Breadth Chart of the Day:

Right back into the 90's on our new highs / new lows ratio chart.  One thing interesting about yesterday was that we did not punch up the new highs.  We did post 323 new highs, but  short of the 500 we were doing a couple of weeks ago.

 

Comments and Levels for the Front ES (S&P500 – Emini futures) contract:

Short: 1588
Long:  1560

We thought that 1578 was far enough up. Oops. What a move, like squeezing out the last of the toothpaste, there always seems to be more left in the tube. We did add some volume back into the positive equation but it is still showing cumulative volume divergence here.

Yesterday was a nice thrust, but it wasn't really anything special in the thrust books, like it wasn't 2% or more, it wasn't 9:1 upside volume.  What makes yesterday's move impressive is that it comes on top of new record highs and marks a 3%+ move from a 2% pullback.

Last week we broke through the bottom of that bull-flag channel adding some fear that maybe the correction was upon.  Yesterday's move pushed up outside the top of that channel.  Our box today is tight to the top, unlike yesterday.  Today will be about follow-through, and we think there won't be much to give on the upside as effort will be in the hold here.

If we are wrong and we do move up through 1588, we would look for 1595.

On the downside, we would expect a convicted market to hold any attempt to move below the 1575 region.   If that does break and the market decides it is correction time, our 1560 is the zone on the bottom for a shorting swing from there.  Not that we would, at least not until we gathered more data. 

Comments about the Front US Dollar DX futures contract:

Yesterday, we wanted that run from the 82.30 area up to 82.70, it missed that target by 0.02 and has fallen off hard over night breaking the key 82.30 area.  Next level down is 82.175, if we break 82.12.  Keeping it all in perspective, 82 area is a 2% pullback.

Comments about TLT (Twenty year Bond ETF):  

Back in March, we were begging to see the 119's.  April came and our TLT just zoomed away up to 123.   Now, with new highs, the bond holders are not so sure that their fear was warranted and have moved back into stocks.  You would think it would lay down a bit in hear and just rest and digest.  We would expect to see TLT settle into a range of 118/122 as the the market works out a few issues.

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Breadth Charts in Full :

Zweig Breadth Thrust:

We talked above about the quality of the thrust, this is another issue here – it didn't come out of oversold conditions. 

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Cumulative Volume Index:

This divergence is going to resolve if the bulls can follow through.

NYSE Up/Down Volume Percent :

Bulls would have loved to have seen a 90+ on yesterday's action, that would have added some confidence into the follow-through and more upside.  

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Number of NYSE issues trading below their 40 day moving average (40DPI):

This is another divergence that has to work out.  

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New Highs / New Lows ratio chart :

90+ on the NHs/NLs.  I need to study if this is a record… They are lovin' their stocks.

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Trenders :

Short Term Trender -  McClellan Summation Index:

We are lazy this morning.. For the first time in a while our short term trender is now bearish-neutral. I will update the chart for tomorrow.

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Long Term Trender -  Cumulative 4-week Highs – Lows (the fat lady):

The Fat-Lady is switching her song-book once again.  Back to bullish, but she isn't putting Act3 of Carmen back onto the shelves. 

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

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