Today’s Economic News:
Not much data out today, but nice inflation numbers out of Europe and a good trade balance surprise out of Italy.
Quote of the Day:
Work keeps us from three great evils, boredom, vice and need.
–François Marie Arouet Voltaire
Featured Breadth Chart of the Day:
Chart needs to recapture the 90’s. This AM’s gap up should help.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
Short: 1709/1729
Long: 1684/1664
We are going to to put up a couple of targets today, shorter and longer term. For today we are looking for the market to top, after this monster gap, somewhere below 1709. We would expect to hit 1694 today as the market attempts to hold. We did not think the market had new highs in it, we were wrong and a hold today would be very bullish. A reversal on the open, however, would be very bad so we are watching a hold between 1684 and 1709 as being bullish and yielding to a 2nd day of buying for tomorrow.
Now that we have made new highs, we have a new target to the upside should we find the ability to follow through on this gap opening. That longer range target is 1729. That also sets up a lower target than that 1606, which now moves down to 1580. We think the market is still starved for a correction, it just isn’t now.
On the MiM:
Not much on the MiM on Friday even though there was a heavy tone to the downside. Buyers continued to buy the offer and the close was filled without too much on the downside. We did sneak in a little trade for a point, but not the decade trade that we would have wanted.
Worthy to note again that there was a squeeze into the close and post-close as shorts had to liquidate before the weekend. Still too many trying to squeeze through that gate.
If you want to join the meter readers you can go to: Join the MiM
Comments about TLT (Twenty year Bond ETF):
There is a nasty H&S in that mess if you blur you eyes a bit. It points to the 105 area, we want to see 104.68 price action today.
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Breadth Charts in Full:
Zweig Breadth Thrust:
If the market can hold today with a nice 3:1 or greater NYSE A/D line, we could see very decent Zweig reach into the oversold area.
Cumulative Volume Index:
Moment of reflection.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Looking ready to go higher.
New Highs / New Lows ratio chart:
If we are to grind, this needs to reach that the 90 area and hold.
Trenders:
Short Term Trender - McClellan Summation Index:
Bullish.
Long Term Trender - Cumulative 4-week Highs – Lows (the fat lady):
Bullish.
Thank you for reading –
Marlin aka RedlionTrader @redliontrader