Market Overview

Still Strength in the Bulls, We Expect a Couple More of these Swings Yet $ES_F 1525 x 1488


Good Morning – RedlionTrader's First Call

Overnight Markets:

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Around the Globe


    Asia – CLOSED
    • Shanghai (China) +0.50%
    • Hang Seng (Hong Kong) +0.17%
    • Nikkei (Japan)+2.43%

Europe as of 7:19am EDT

    • DAX (Germany) +2.50%
    • FTSE (UK) +1.45%
  • Perfect green again around the globe:

Today's Economic News:


We didn't like to see that 12 year note from Germany taking that tick down in rates.  To us that indicates some profit taking and shorter term fear and protection.  We need wild abandoned buying in the markets to keep this rally alive.

Quote of the Day:
He who laughs last has not yet heard the bad news.
–Bertolt Brecht

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


If you watch one indicator over the next few weeks, it should be this one.  Since the end of November, the fat lady has been singing about sunshine, unicorns and strong bulls.   Once that index crosses the 15 DMA, which just a month ago seemed impossible to imagine, then the fat-lady will be changing her songs to storms, earthquakes and disasters galore. 


ES SP500 Futures Comments:

Short: 1525
Long:  1488

We might be calling it tight in here we like a top going in place anywhere between here and 1530.  Here is the tricky part, if we are wrong, the next extension to the upside number we have is 1542, so wrong is really wrong, but that is the problem with calling tops.  We think there are a couple more of this wild swings left in the beast before it settles into a more prolong selling pattern.  That will take us easily into March.

That last swing took us to the 2% pb area, we are looking for something a bit more dramatic, like to the 1490 area this next go around.

We have that sequester thingy in the news and the sides are pointing fingers again, that should get us some wild microphone rallies and dumps so if you are use to those 4 or 5 point days, wake up to the 10+point days ahead.




US Dollar DX Futures Comments:

The US Dollar folded at our 81.75 resistance area and is now 0.5% back.   We would like to see a trip to 81, but this is a good area to re-group for another run, we have next up extension at 81.97.


TLT Twenty Year Bond ETF Comments:

TLT is right up against the upside.  The bullish open this AM (now up 8.25 on the ES) will have the TLT gapped down, so today will most likely not be breakout day.


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Breadth Charts In depth:

The question is are we done now with this run with the high in place, or was this just a quick pullover into the rest area before the journey begins.

We don't really know the answer to that, but our job is to best guess what is next, so let's pour over the charts.

First up the Zweig index below.  It took its bounce off the first trip below 50 and has now made it back up above 50.  We would expect that 55 area on the Zweig to hold.


Our CVI took a bounce, but it was not overly upbeat on the upside here.  There was much more energy that went into the selling then buying, but that is normal even on a minor correction, but this doth math bearish divergences.


Our 40 DPI continues to suffer which it has been doing for a while:


Nice bounce up on the NH/NLs, we don't think we are going to get into the elite 90s again for a while:


Our trenders are split between bearish and neutral.  That is a major turn from just a week ago.


The “fat lady” indicator isn't quite there yet, we need to see that 15 DMA  crossed from above to below:


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 Markets Trading Ideas


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