Market Overview

Our first real test this year, looking for a bounce $ES_F 1515 x 1488 $study

Good Morning – RedlionTrader's First Call

Overnight Markets:

Morning links:

Around the Globe

 

    Asia – CLOSED
    • Shanghai (China) -0.51%
    • Hang Seng (Hong Kong) -0.54%
    • Nikkei (Japan)+0.68%

Europe as of 6:53am EDT

    • DAX (Germany) +1.12%
    • FTSE (UK) +0.81

 

Today's Economic News:

image

Nice expectations numbers, everyone thinking the future is looking rosy.  The USA is silent today.

Quote of the Day:
Bureaucracy defends the status quo long past the time when the quo has lost its status.
–Dr. Laurence J. Peter

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

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We will put up our Zweig today to show the breakdown.  We are looking for a bounce, we would have liked a narrow range red day today as a buying opportunity, and we think a red close might be a good weekend hold, but the gap up this far at nearly 8 points has us thinking that is not going to happen.

 

ES SP500 Futures Comments:

Short: 1515
Long:  1488

It looks like we are getting a bounce overnight, the econ numbers out of Europe were pretty good.  We think a bounce into the 1515 area is worth watching the scalping charts to see if a short sets up there.  Our view is that the battle for the top is not quite won yet, ultimately we will get that 5%+ correction but we think that is just a bit down the road still so we will try and play with this increased volatility that we should see over the next few weeks.   That means picking up a short on a good entry around 1515 and buying some long around 1488. 

 

image

US Dollar DX Futures Comments:

We would like to see a pullback to the 80.95 area and set that up as major resistance, a solid step in the ladder.  If we do push through the 81.63 high here we would expect that could exhaust as early as 81.75.

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TLT Twenty Year Bond ETF Comments:

We thought the pledge by Fed Williams that the support for bonds would go well into 2013 would have sparked just a bit more enthusiasm than it did.  For now the winding continues and we are betting on the breakup side to 118.50. 

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Breadth Charts In depth:

We think the battle continues, but shorting any upside moves into the 1% area from the top should eventually pay, but  we don't think it is all downhill from here:

 

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A down move on the Zweig this large is usually fuel for a decent bounce.  We like 3 day pullbacks in general, and would love to see just a wee one today, but if the market needs upside relief, we wouldn't stand in its way.

image_thumb[3]

The CVI is acting like price. That was big volume yesterday, big.  That is evident in the size of the CVI move as the first rush of spectators out the stadium door started.

image_thumb[5]

We don't think the 40 DPI is going to make it below 50 and expect to see a bounce back up to the 70 area.

image_thumb[7]

It lives!  We have movement now, all that pent up energy finally broke down, we would rather of had it to to the 40 area to setup for a decent bounce, but from here would be ok too.

image_thumb[9]

Our early trender has gone bearish and is calling that the top is in, we are not so sure yet.

image_thumb[11]

Our slow trender is one day away of turning neutral, we will wait for confirmation before we reverse the trend.  Technically it isn't even under review.

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: News Global Markets

 

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