In the NH/NL Bounce Zone Level1.. the Lugs Nuts are Off Too! $ES_F 1694 x 1680

Today's Economic News:

Not much out of Eurozone but the German Industrial number showed a nice bounce.

Quote of the Day:
Reason often makes mistakes, but conscience never does.
–Josh Billings

Featured Breadth Chart of the Day:

The breadth charts have been giving us plenty of warning that we were standing on soft ground.  Today we look at the Zweig down below that 50 again.  This is where the journey will end if we are just gathering before the next leg up.

 

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

Short: 1694
Long:  1680

You can tell when the bears are frustrated because a sprinkle feels like a monsoon when you have been in a drought for a while.  We are just 1% back from the highs, not much of a pullback yet.  The waning breadth momentum had been warning us that higher highs were going to be hard to achieve without some re-gathering lower. 

For today, we think 1694 caps the high for a while, but more downside is still needed to get those breadth indicators into rally mode.  We have 1680 for today and we want to see if that can hold.

If this is the wheels off day (we mentioned the lug nuts were at least loose)…  we should make it through 1680, then 1672 is our way way target, that is around the 2% target.

There is no selling leadership and the market seems to be looking to following a lead.  The MiM at the end of July sold off hard, but since then the selling has been non-existent or ignorable.  

 

On the MiM:

Waved off MiM yesterday that did show gathering sell.  We haven't seen any real conviction for the last 4 days.  The buyers and sellers are waiting until the end to see how the market is going before joining in  the trade.  That does not fair well for those extremely bearish as there is no real conviction to be selling here.  That 100 point drop that everyone is waiting for won't be happening until we see those $1BB type sells.

 

Comments about TLT (Twenty year Bond ETF):  

TLT trying to make the move higher.  Watching that 106.75 today.

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Breadth Charts in Full :

Zweig Breadth Thrust:

See the featured chart:

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Cumulative Volume Index:

Volume following price.

 

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

The breadth market continues to weaken.

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New Highs / New Lows ratio chart :

Level 1 bounce zone. (That first move under 40 usually gives us a bit of a bounce.)

 

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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):

Rut Roh.. The fat lady has a red nose.  That is a one day thing, but the bullish bronze is starting to tarnish on our long-term trender.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

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