Adult Swim, water is safe again $ES_F 1612 x 1654

Today's Economic News:

Mixed news from Japan, but you have to like what we are seeing out of Europe.  Spanish un-employment dropping, good numbers in the construction PMI out of the UK.  We like it, the US Dollar doesn't.

In the USA for today watch the  10am survey number.

Quote of the Day:
If you aren't living on the edge, then you are taking up too much space.
–Anonymous

Featured Breadth Chart of the Day:

Still not oversold on the Zweig, looking for the 40.

 

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

Short: 1654
Long:  1612

We are looking for more down, but first we think there is enough fight left in this market to shoot us up again, perhaps even make a new high!  For today, we had 1650 marked but we liked the head and shoulders which we think targets that 1654 area and we like the day for a bounce.   On the downside, should we be wrong about the bounce, we are looking for 1612.

If you make it down this far and have been reading everyday then you know that I am finishing up the MiM for MrTopStep.  A joint venture between MrTS and a group on the floor of the NYSE. 

The MiM is a real-time representation of a sub-sampling of symbols on the NYSE whose specialists are advertising imbalances.  That data is hand collected, starting between 2:30 and 3pm ET, and then accumulated until the release of the Market on Close imbalances are published.

It gives you an early view of how the imbalances are coming in.  For the first time ever, this floor work is available to everyone and I have had the privilege  work with the data for nearly a month now and have seen it in action as I have been developing.  I only get about an hour of live data a day, so it makes debug hard, but it is a focused hour that can be quite profitable.

I want to make this indicator an added tracked indicator of my work now since I think the close is really important has a story to tell each day.

So here is yesterday's MiM at the close. The numbers along the bottom are ten minute snapshots:

Using eastern time, you can see that at 3pm the imbalances were coming in on the sell side.  At the time I was chatting with a trader (LK) and shared my thoughts that, even though the sell side was showing right now it was very small and that going long into the close was going to be the best trade in my opinion.  That clearly was not the case last Friday, where we had heavy sells in at 3pm. With a light sell-side I was pretty sure that big sellers weren't trying to get out again.  

Sure enough, as time marched on we watched the meter flip to the buy side and then the orders started coming in on top of each other.  So although the 3pm idea was good, I didn't know that follow on buying was going to be in the works, but once the buying started it signaled the others big-buyers that it was safe to swim again, and jump back into the pool they did.

This is one of the last pieces I want to add into the website that hosts the MiM.   Along with collecting the 10 minute snapshots of the percent imbalances, it also captures the current price of the SPX (S&P 500 Cash Index) and displays the best trade for that day, a kind of tracking tool to aid in learning how to trade this data.

The above chart is specific to Monday's close showing in the PCT column the same data as above.  Then there is the SPX price at those timestamps and then the trade columns.  So at :00, 3PM eastern time, had you gone long like discussed above and exited that long at the close you would be up 7.5 points.

If you showed some patience and wanted to wait for confirmation and entered your trade at 3:20pm instead and held to the close, that would have been the best timing for a closing trade and would have given you 7.7 points.

I want to start using these charts for a while and see if we can't work them into swing trading, because the close is telling a story and yesterday's story was wait ‘til we see the buy in their eyes then blow the whistle that it is safe to jump back into the pool. 

We also think our indicators are at good bounce points so we are looking for some upside from here.

To find out more about the MiM you can go to:  http://closingimbalance.com

 

Comments about the Front US Dollar DX futures contract:

That head and shoulders that we pointed out last week hit the 82.90 target and beyond, we thought 82.77 would be the hold, but 82.50 acted more like it.  We now want to see 82.53 hold as a higher low before we start to think up again.  Those numbers out of Europe sure look good, though.

 

Comments about TLT (Twenty year Bond ETF):  

Still smarting so we are watching consolidation.

>>> Follow us @redliontrader<<<<<

 

Breadth Charts in Full :

Zweig Breadth Thrust:

Waiting for the 40, haven't been this low since November.

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Cumulative Volume Index:

Tracking the market one-for-one so not revealing anything useful.

 

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

Still have room to the downside here.

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New Highs / New Lows ratio chart :

Someone, and soon, will buy back those bargains.

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Trenders :

Short Term Trender -  McClellan Summation Index:

Bearish.

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

Let's see what a bounce can do before we trounce short.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

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