Today's Economic News:

Good news out of China, continuing weak news out of the UK.  In the US, we start our Jobs week with ADP data out at 8:15am. At 10am ET, we get the ISM index for non-mfg. – that is something worth watching.

Quote of the Day:
If it doesn't matter who wins, then how come they keep score?
–Vincent Lombardi

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

We are highlighting our Zweig again today as we wait and watch to see if the bears can get a follow-through day.  Despite yesterday's gap open and run to new highs, the A/D lines (the broader measure of market strength) remained weak all day.  That gave us a little move down on the Zweig, something different than all the other one day wonders.   So we are forming a gap up here at 5:30am ET and setting up near yesterday's highs. We are watching to see if that broader market weakness leads to more exit selling.

ES SP500 Futures Comments:

Short: 1571
Long:  1547

This overnight strength screws up our numbers and we have to lift every morning to higher and higher ground for protection, even though we really like it here for the short side.  Today, we scoot up a couple more to the 1571 area looking for that final exhaustion.   Yesterday, the market was weird – the price action gave us another 0.5% pull back, yawn,  but breadth was quite negative for a day that ended ok. 

Even more disappointing for the swing shorts, those downside targets continue to lift, also, so the reward piece gets smaller and smaller as well.  Today, we lift that up to 1547.  It remains a sit back and watch market as we wait for more signs of the market losing steam, like fewer numbers of new highs and new lows, for instance.   These numbers need to get below 100 and stay there in order to do some serious selling.   It is crazy crazy buying still.  We can get one day wonders below 100, but the key is, they need to stay there.

This is our ES chart for the day

US Dollar DX Futures Comments:

The dollar showed us how important that 82.70 area was; we like 83.22 up as well as 83.30.  Our longer term target remains at 86 for the  June dollar contract.  

TLT Twenty Year Bond ETF Comments:

We continue to watch the TLT.  We like the hold near the 118 area, we want 117 to contain any down side.  We will like to see some reversal building  and a return to the 120 area, that might be the summer trade.

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Breadth in Depth:

Our Zweig is back below 40, it will need another negative NYSE a/d line to signal weaker markets ahead.  Worth watching today:

Again, the divergence is on the volume here.  This is why yesterday felt so weak while we were putting up higher prices.

Our 40 DPI is also showing bearish divergence. The number of stocks trading below their 40 day moving average went down yesterday, despite what the market was saying.

The NHs – what can you say?   I have whined about it today in this article and for a guest column on the MrTopStep.com opening print.

Trenders remain split:

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