Bears need follow-through, bulls most likely going to chew it up $study

Around the Globe

    Asia – CLOSED

  • Shanghai (China) -0.50%
  • Hang Seng (Hong Kong) -1.06%
  • Nikkei (Japan)-0.27%

Europe as of 6:28am EDT

  • DAX (Germany) -0.74%
  • FTSE (UK) -1.01%

 

Today’s Economic News:

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Sponsored economic news still just trickling in this week. Watch out for that sneak 2pm ET release of the FOMC minutes today, that can be a slow mover as the market participants digest the read from 2pm into the close.

Quote of the day:
You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself. – Sam Levenson

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

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Today I put up a chart of the New Highs / New Lows ratio to remind ourselves just how strong this market is.  If there is weakness, the bears will have to show with some real follow-through today. 

 

ES SP500 Futures Comments:

Short: 1430
Long: 1390

Our Premarket range is so far apart and price is in the middle that I doubt we can hit either objective today which means that those prices will most likely carry through until tomorrow.

We continue to play in that bull flag channel with a pretend breakout yesterday that found sellers and moved us to the bottom of the range in what was an expansion day.   We had been looking for a hold around 1406 and I think the low tick was 1406.75.   This is battle area now, we had a fake breakout yesterday and the bears have a shot today of take out to the downside. 

This is our first 1% pullback since 8/2 which is a very long time to not get some volatility.  We think the ranges for the next few days will be above 10 again in the ES as the newly encouraged bears and profit takers battle it out with the late arriving bulls.

Breadth still does not indicate weakness and favors the bulls here on any pullback.  Those pullbacks should be contained in the 3% area for ES which is down to 1382.  We are a little higher than that at 1390, but this 1406 area needs to break and we are not sure the bears are going to be able to do that today, at least not for any length of time.

 

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US Dollar DX Futures Comments:

The Dollar has broken down and through the 82 level and is holding.  It is not extending as of yet, but the longer the visit below 82 lasts, the more comfortable the price becomes and the more likely we will see 81.50 and then 81 itself.   Those moves would be bullish for the markets.

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TLT Twenty Year Bond ETF Comments:

The trend in TLT remains down with a 2-day bounce at this time.  The 125 area sits over head with a 118.50 target below.  We think that range should be maintained for the next few weeks. 

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