Shredding the Markets and watching 1693 $ES_F

Today’s Economic News:

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We hate to give a 0% inflation number the green light, but compared to the last deflationary read we like the German trend a bit better how.  All quiet on the Western front today so we will watch what this slow rising tide action will bring.

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

Featured Breadth Chart of the Day:

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Strong trend mode type action.  

 

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

Short: 1693
Long:  1665

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It was all upside yesterday and the trend continues. Up, Up and Away!  1684 has broken and we would expect the same today.  New highs are piling in once again (327 yesterday on the NYSE!).   So our downside target should actually be 1665 and we forgot to raise it today on the charts visually, but that is what we are writing down.  Upside, we are looking to extend to 1693 if we can break that 84 again.

I wanted to take a few minutes to talk about the ATR indicator (average true range) that is sitting on the bottom of my charts.  I just put them up the other day to answer a question from a reader and never took them down, but it is interesting to note that we are watching the ATR trading below 3, a random point that I have used in the past to help me judge the waters.   I think of that three as the cut off point between calm trending markets and non-trending markets.  When was the last time we were below three?  Since the time span from the end of April to the highs in May, another amazing trending time. 

The reason I brought the ATR out was because a trader a week or so ago complained about getting stopped out with a 2 point stop.  It was during a time that I didn’t even think the market had moved 2 points.  It did.  It was just a really unfortunate entry.  It happens to all of us.   The problem was, and this is when we  hate those safety nets, the trader was right and the market took off.  That is when it hurts the most, when we find ourselves sitting at the starting gate with a loss and everyone else is “winner winner chicken dinner”.  It hurts.

I have talked to many traders over the years about stops and here is the dirty little secret: the wider the better.  There is not an automated trader out there that doesn’t know that.  There is so much noise in the market that Draghi flapping his lips in Germany can take you out of a good trade at any time.

You have to know about noise.  You have to now about volatility. You have to know about range.  It has to be part of your trade setup and management.  We are in low volatility now.  If you need to make the same amount of money out of this market as you did last week when the 60 minute ATR was above 4, you need to adjust, it is not the same market. When traders say to me “I always use 2 point stops”, I hear “I always use a 9 iron”.  That doesn’t make sense to me.  I suppose it could work if your are adjusting someplace else.  There are plenty of adjusting tricks.  One of my favorite is moving time frames.  If you find you trade well in an ATR of 4, then find a time frame that is giving you that and trade that time frame, then you can keep your stops fixed. Maybe.

Iimage don’t know anything about surfing except that it is best done in the ocean, and preferably a warm one.   I live on the coast of Maine and our water temperature here is just hitting 70 for the first time this year, thanks to an unusually warm summer.  Usually the water is cold.  Between 60 and 70.  It is very different than Florida. That doesn’t stop dudes and dudettes from skinning up and  waxing on.   If you want to know what it is like surfing on our beach you can watch this video.  It ain’t Hawaii 5-0 for sure.  Surfers travel from Canada to hit these waves (what is going on up there? life must be really boring).

Here is the thing about the ocean.  It is different everyday and in different places. Did you know there are different surfboards depending on the conditions?  I have enclosed this handy little chart to help you pick your board.  It has inspired me to make the same chart with ATR on the horizontal and Market conditions, trending  -> chop on the vertical and to put down my strategy in the different quadrants. One of those strategies btw is stay out… you just are not good enough or rich enough to shred this market, watch the pros.

I have my homework cut out for me, if you have an adjusting chart like this, I would love to share it amongst the readers  (I am looking to cheat).

Happy surfing (I will stick to the web kind). 

 

On the MiM:

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MiM is just showing us that the close was blah… No strong readings in either direction so a bit non-directional moving back an forth across the great divide.  Not even worth talking about the best or worse trading time frames since no one should have been making directional trades based on that.  If you did and you are killing it, let me know.  I know it is disappointing when we don’t get that strong MiM signal, but even having the above information, a do not trade the MiM signal (you of course can use your other tools freely) is invaluable for that closing hour.

Today is Friday.  Fridays are important.  Watch how this trend up week closes.  It will be important for Monday and next week.

 

 

Comments about TLT (Twenty year Bond ETF):  

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108.75 is the target one more time and a failure there should take us down.  Break out and we are talking about filling the gap at 110.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

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Looking good.  In fact so good that the market can go up while the Zweig is going down.


Cumulative Volume Index:

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Good

 


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

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How is that for a recovery.  20% of stocks above their 40 DMA and now 65%.  Nice.


New Highs / New Lows ratio chart :

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They are loving the same stocks over and over.  Very nice for the bulls here.


Trenders :

Short Term Trender –  McClellan Summation Index:

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Bullish:


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

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Swing number three at 1680 on the E-Mini

Today’s Economic News:

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Great numbers out of the UK today… Watch what is happening in Philly.  Good news should equal good news with the Ben insurance policy.


Quote of the Day:
I haven’t spoken to my mother-in-law for eighteen months—I don’t like to interrupt her.
–Ken Dodd

Featured Breadth Chart of the Day:

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We took that 2nd stab up and we did move the Zweig.  Will our 3rd assault on 1680 work?

 

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

Short: 1680
Long:  1650

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Assault number two was a no go at the 1680 level.  We have moved back just a bit.  I added the ATR (Average true range) about a week ago just out of curiosity.  The way I have it set up gives me the average move with globex over the last 2 days in a 60 minute window.  The answer is 2.81 and that is up from 2.5, so volatility is up, we would expect it to settle or trend down if we are in climb mode. 

Numbers are the same as yesterday, everything is the same except that the bulls made no headway, but neither did the bears.  That 1665 area seems defended as well as 1680 so watch for a break on either of those for confirmation and to see the market move to the next quantum level.

 

 

On the MiM

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Wasn’t much on the close yesterday as we just moved into it slowly.  We did know that they were not going to take it down much, so no spill on the close.  That is valuable information to have.  The trade was just before the reveal,  (3:45PM ET) when the NYSE numbers are made public, to go long with the MiM and then hold into the close gave you almost 2.   

Looking at this chart and watching the meter in action are really two different things.  As price is moving, the MiM is moving, you do get a sense of how the close is going to work.  Two days in a row we have “trending” MiM readings, which either strengthened in to a signal like yesterday, or weakened out of a signal as the day before.   I think we struggle most with those days.  We all want the 500M 90% buy.  That is a clear signal.  The trending days are a bit tougher to decipher, but there is data there and data worth having and knowing.

http://closingimbalance.com

 

Comments about TLT (Twenty year Bond ETF):  

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Destination has been reached on the TLT.  Watching for 110 to hold and a failure between here and there  to see how serious we are about 106.

 

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

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Bulls need to find some more advancing stock.


Cumulative Volume Index:

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No info here.

 


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

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40 DPI in alignment with the bulls.


New Highs / New Lows ratio chart :

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Perfect new high recovery for the bulls back into the 90s.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

Bullish


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

Bullish

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Bulls get another shot at $ES_F 1680… running start

Today’s Economic News:

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China and Europe on the green today. Looking good.  In the US, watch the housing market and see if that is holding up to expectations.

Quote of the Day:
When you get to the end of your rope, tie a knot and hang on.
–Franklin D. Roosevelt

Featured Breadth Chart of the Day:

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The New Highs/ New Lows ratio chart did a bit of a pullback.  We still put on 184 new highs on the NYSE SEOcompany so it isn’t breaking down yet.  Good news out of Europe and Asia today, so watch the USA news and the housing numbers to see if this economy is still trending up.

 

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

Short: 1680
Long:  1650

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1680 is a tough nut.  We are seeing that and the bulls have pulled back just a bit (not much, not even 1%!).  That is a running start kind of move where the bulls want to run and take it higher.  That puts 1684 in play for the day and a good area to use as confirmation for a breakout. Breadth is very bullish and it is clear that the bears need to show some follow-through to yesterday.  Any doubt goes to the bulls without question.  We are on the lookout for serious reversal moves.  That hasn’t happened.

 

On the MiM:

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You can see from the MiM snapshots that the early read was that a significant sell-side was developing, that was clearly erasing by 3:20 and in the final tally the MiM moved through neutral to the buy side.   That loss of the sell side signal and directional move was the setup for the best entry, a long around 3:20pm into the close that gave about 3 points.  For the early birds, the 3:00 entry with the meter and then an exit when the volume dropped below the 150MM number was the exit signal yielding about 2 points.

 

Comments about TLT (Twenty year Bond ETF):  

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Last week we sang “I see the bad TLT rising” and here it goes.  It played with the 119.20 area for a while, we think it could be in trouble for a while here as far as upside, but would like to see the 120s soon in order to put on some downside pressure to aid the bears.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

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A bit of weakness again on the Zweig.  We did have a negative NYSE line, so watch for bears to follow through, if they can.


Cumulative Volume Index:

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No Info.


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

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First negative day in a while.


New Highs / New Lows ratio chart :

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Needs to regain footing soon to resume trend status.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

Bullish


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

Bullish.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Giving $ES_F 1680 the benefit of the doubt for now, if that breaks, think 1720

Today’s Economic News:

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We like the year over year inflation numbers, but those month over month are a bit soft so we want to watch that UK and Germany can get it started again over the next few months. In the USA today we also get some inflation numbers and capacity utilization numbers at 9:15, pre market open.

Quote of the Day:
Comedy is tragedy plus time.
–Carol Burnett

Featured Breadth Chart of the Day:

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Day 2 we are featuring the new high / new low chart.  I want the readers to understand that this market is super uber bullish and if we settle in here between 90 and 100 for a few days, this market could continue to rally to new highs in lower volatility.

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

Short: 1680 / 1720
Long:  1650

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This 1680 area is the ceiling upside for the market and the bulls.   If we can hold the prices here and keep putting in a large number of new highs in stocks (we did 318 NYSE new highs yesterday), we can begin another sustained leg moving up with lower volatility.  That is 180 degrees from what we said at the beginning of the month when we thought the summer was going to be sideways and choppy.  We can’t ignore the bullishness in this market and as we approach 1680, the bears will need to be seeing a lot of bullish breadth draining and volatility increasing if they’re hoping for a breakdown here.   So we sit back and watch how we trade from this level.

On the close and the MiM, we did see a slowdown in interest to get into this market, something different than Thursday and Friday.

On The MiM:

 

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For me, the MiM was just neutral all through the close.  The sell side did build up toward the close and we were down just a bit on the hour, but it wasn’t wholesale selling, but more importantly, it was a display of clamoring to get in like we saw last Thursday and Friday.   The best short was at a 3:10pmET entry into the close and there was little opportunity to make money long.

 

Comments about TLT (Twenty year Bond ETF):  

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Decision time on the TLT now.  It looks like if we don’t move the open today we should hit that 180.75, we closed it out yesterday at 108.67.   If we do start to get selling at the 1680 level, we should see a move up to that 109.50 area next.  If we do fail here, watch 106.50 and then 105 area.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

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Strong


Cumulative Volume Index:

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Just a bit of a bearish divergence, but otherwise looks ok.

 


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

image

Lower high trend line is worth watching on this chart. 


New Highs / New Lows ratio chart :

image

You already know what I think about this chart.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

Bullish


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

Bullish

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Oh, so close on a ZBT signal ! Breadth is uber-bullish, we need an overreach in that 1680 area to get any pullback $ES_F 1680

Today’s Economic News:

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Numbers out of Euro-world are still looking weak.  Watching Michigan today to see if we can get a spike up that might induce some profit-taking, that might, in turn, induce some shorts that might panic out some recently added weak longs hands and that is how a giant snowball is made. Or we just grind higher into the weekend.


Quote of the Day:
Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.
–Goethe

Featured Breadth Chart of the Day:

 

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We did get to the Zweig Overbought (>61.5) but it was not an official Zweig Breadth Thrust (ZBT). That play ended two days ago, but the target, a reading above 61.5 was hit yesterday and it completed in 12 days.  That makes this rally one of the strongest in the recovery and foretells more upside.  Very Strong.

 

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Look at those new highs, amazing and un-flinching for now.   I would not be shorting if those remain high.

 

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

Short: 1680
Long:  1625

image

We are anxious to see if we can get to that 1680 area and then more excited to see how we perform. For sure there will be some acrobatics there. For now we have this 1672 area as a fulfillment of what was a failed head and shoulders.   On the downside we have 1625 that we think needs another stepping on before we go too much higher.  Looking through the breadth charts the highs look a bit too exuberant and that means our best chance at see some selling is a big push up that overreaches and stalls, possibly on news or a thin short cover squeeze during slow hours.  Whether the selling can sustain in this bullish sentiment is another issue.  How about those closings? (They are buying).

On The MiM

 

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This was our 2nd day now with a very strong reading that was consistent through the entire on hour cycle of closing.  For those trading on the MiM, please understand that the data starts between 2:30 and 3:00pm ET. It starts when there is enough data to begin to push so it varies.  I don’t really like looking at the data until around 3pm when it is usually more complete.  It is a manual process to enter the data and it usually takes a little under 10 minutes to complete the cycle, so from when you first see data, watch how it is building, but give it some time.

Yesterday, marketwise, was a bit different than the day before reads when we were sitting away from the highs.   Yesterday we were on the highs, having trended up +20 all day long and it took a brave trader to add long with the MiM into the close.  There were opportunities on pullbacks and the 3:10pm entry seems to have been about the best timing looking at a 10 minute snapshot.

If you didn’t trade, and I don’t blame you, I would hope with such a MiM reading that you didn’t try and short the close. There is value in know what not to do also, saving 2 points on a dumb entry is worth $100 per.  That is a month right there for the MiM!

 

 

Comments about TLT (Twenty year Bond ETF):  

image

We are watching today to see if we can hit that 108.75 area, that gap away at 110 has our eyes too,  but a failure at 108.75 should see us visiting the 105.50 area.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

image

So we are overbought.. Wow,


Cumulative Volume Index:

 

image

Volume making up a bit of lost ground.

NYSE Up/Down Volume Percent :

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Close but no cigar on the 9:1 up-day thrust yesterday.  It was very strong though.


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

image

As is our 40 DPI.


New Highs / New Lows ratio chart :

image

See if this can settle into a trending pattern by staying above 90 now.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

Bullish


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

Bullish

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Yesterday the bulls looked a bit tired, today… they have a new summit to hold $ES_F 1680 x 1625

Today’s Economic News:

SNAGHTMLbe2c0

Great numbers out of Japan.  Don’t like those negative inflation numbers out of Germany.   Jobless claims and retail sales numbers are the potential tail wind for the bulls today.


Quote of the Day:
The real trap of fame is its irresistibility.
–Ingrid Bengis

Featured Breadth Chart of the Day:

image

The Zweig gave us a bit of downside despite the market holding, as did the NH/NL chart.  This rally is just now starting to show some fraying.

 

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

Short: 1680
Long:  1625

image

Like a rat on a sinking ship, we climb our potential top higher yet again, this time to 1680.  That double top is still in play to that area at which point any retest to the downside will be worthy of noting, much like that 1595 area was.  We are just seeing a bit of fraying here only (ha) putting in 192 new highs.  We will continue to watch that and any stumble for the bull between here and 1680. 

On the MiM

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Great opportunities on the MiM, right at the time and location that most thought the plug was to be pulled on the markets, us meter readers had a little inside edge watching the buy side build.  Many managed to make money yesterday.  This is how it played out in the MTS IM-Pro trading room:

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A good solid performance for the MiM  giving us confidence on a hold and then a run, that has continued into this  morning.

 

Comments about TLT (Twenty year Bond ETF):  

image

Looking for a run up to 108.75 and then that double bottom is in play on any test at 106, failure means the 105.25 area in our opinion.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

image

Just a bit divergent.  This gap up today should be a real tell if the market can hold.


Cumulative Volume Index:

image

Market looked tired yesterday and now it has been given a boost up, can it follow through?

 


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

image

While all the other indicators were down a touch yesterday, this 40DPI made progress, that is that math advantage for the bulls at work now.


New Highs / New Lows ratio chart :

image

Just a touch of warning, today is about follow-through.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

We have moved from correction to bullish again!


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

Fat-Lady is now 2 days above the demarcation zone, that puts here as bullish.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Double Peaks and Whack a Bull $ES_F 1650 x 1625

Today’s Economic News:

image

News is ok for today.  Weaker numbers out of China than expected, but that is OK too.  Watch today for that 10am ET release of wholesale inventories and then again at 2pm ET the FOMC taper notes.    The bears are looking to take advantage of the dangerous double top and those seem like two events that could work in their favor.   Yesterday’s price action was a bit indecisive so the bulls are vulnerable today.


Quote of the Day:
We’re lucky poodles migrate south.
–Al

Featured Breadth Chart of the Day:

image

New Highs remain the story as we move through earnings.  

 

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

Short: 1661
Long:  1625

image

Waiting… Waiting… Waiting… Waiting for the bears to show some fortitude.  Anything.  They have a shot here now at 1649 with a double top in place from the June 19th time frame.   We have 1661 as the next higher target here.  A failure down to the 1597 area and then a run back up would make a decent right shoulder of an inverse head and shoulder pattern.  For today, we wait to see if the market will just even pause here to see what the bears can do.  Read and look through today’s breadth charts, they are pretty strong looking and even the fat-lady, previously singing “go bears” is now starting to sing a swan song.

 

On the MiM:

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Data came in just before 3:00pm ET strong on the buy side and with volume.  That 3PM entry turned out to be the value point with a close of the trade when the buy side fell dramatically into the close.   The loss of the buy side advantage turned out to be the spot to put up the counter trade with a 3:40 exit.

On a technical note, we have finished switching over everyone to use the new meter, some of you needed to do a cache refresh (Ctrl F5)  in order to see a clean copy.  We did get a server disconnect yesterday from our symbol quote source (not our NYSE source) and that fouled up our data.  That error situation handling has been improved as of last night and the new back-end is now officially released.   If any of the meter readers are having issues, please contact me directly: marlin@mrtopstep.com.

Our MiM service is Premium and requires a subscription http://closingimbalance.com/subscription-options/

We have added the ability to see the NYSE Arca Opening & Closing imbalance.   These services are currently experimental as the data is mostly ETF based so, for instance, if traders are selling 40MM “double bond funds short” what does that mean for the markets?  We are building out some correlation tables to see if we can correct the data to be more useful. In the meantime, feel free to watch the data.

And for those that want to analyze the data, the MiM snapshots are currently open to everyone also: http://closingimbalance.com/snaphshots-mim/

 

Comments about TLT (Twenty year Bond ETF):  

image

We are expecting to see some type of bear-flag action with an upward slope to the 108.75 area.  This is laying a bit flat right now this a.m.  If we do break down, we expect the next level down to be in the 105.24 area. 

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

image

Bears can not string anything together to make a move.  They need to push the Zweig below 50.


Cumulative Volume Index:

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Volume is just a bit bearishly diverged now, but not much.  Pretty good stuff the bulls are showing.

 


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

image

40 DPI showing that math advantage we have been talking about, now up to 43.73% on the double top. 


New Highs / New Lows ratio chart :

image

As Linda Ronstadt would say, don’t it make my bear eyes blue, as in sad.  These new highs indicate the sentiment of investors  to chase stocks into earnings.  282 NYSE new highs yesterday.  We are just pushing it higher and higher. 


Trenders :

Short Term Trender –  McClellan Summation Index:

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This move have been so fast that even our short-term trender has not turned neutral yet.  It remains bearish.


Long Term Trender –  Cumulative 4-week Highs – Lows (the fat lady):
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And the fat-Lady has her first day in Bull territory so the bears today need to play whack-a-bull in order to stop this cross.  Watch that double top!

 

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Double top 1650 $ES_F? Somewhere there is a bear

Today’s Economic News:

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Now the UK is going all soft on us.  That should be more fuel for the dollar.

Quote of the Day:
Keep your fears to yourself, but share your inspiration with others.
–Robert Louis Stevenson

Featured Breadth Chart of the Day:

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We continue to operate under the impression that there is more downside testing to go and are awaiting a sign, any sign, that this low volume rally is petering out. We haven’t had it yet and and are now eyeing the 1650 area for a double top potential.  Today’s featured chart is the Fat-Lady,  our slow, lazy trender that, when below the dashed line (the 15 day moving average of itself), indicates that the market is in a bearish trend, above bullish.   We like a two day filter before we change our direction to eliminate some chop.  We are now one day above and we are thinking a good day today will have our head spinning.  We would like to see something negative on the books for what has been the most bullish day of the week, Terrific Tuesdays.

 

 

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

Short: 1649
Long:  1625

image

Read more in the featured chart of the day to understand my sentiment. Looking to see if there is power in this double top at that 1650 area.  We like 1625 on as a resting spot for any regression the market might want to do from here.  We wait patiently, looking for a crack, but those new highs!  280 on the NYSE yesterday.  There are anxious buyers that want to be part of this market and despite the fact that prices are as high as they have been in years, buyers still persist in thinking that soft spots, like we are seeing in Europe right now, are worth the risk.

Thank you to all those that pointed out that peddling is something that I do when I tell you to buy a month on the MiM and try it out and that pedaling is something you do to ride a bike.   I still have my training wheels on when it comes to using the great language we have evolved.

 

Yesterday on the MiM:

I did recover from Friday’s archive data loss and that post is now complete and we think the auto-snapshot function is working.  To see the snapshots so far for the Month of July you can go to : http://closingimbalance.com/snaphshots-mim/

For yesterday, our chart turned out like this:

image

So while I did get signals that I liked (> 66%), and size (>150MM), the movement was just painfully slow.  The best short was only 1.5 points from a 3:00PM ET entry to a 3:30 exit.  When we did finally get signals, a long with the meter would have netted just shy of the 1.5.

So not much to be gained, but it was good to see size coming back in as we figure out how to trade this thing into the summer.

 

 

 

Comments about the Front US Dollar DX futures contract:

 

I have chart issues today and don’t have any DX comments.

 

Comments about TLT (Twenty year Bond ETF):  

image

Our swing area on the TLT, a tilt-a-whirl, has now set up to the top side at 108.75 and the downside to 105.25.  We would expect some bear-flag behavior in here with a slow retrace up to that 108.75 area.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

image

We are awaiting signs that there are still bears out there.  We need one of those to be a sub-40 on the Zweig 


Cumulative Volume Index:

image

The lack of volume on this run up is the only bear-likeable thing in the charts today.

 


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

image

We mentioned yesterday that over the next 40 days the math gets easier for this chart


New Highs / New Lows ratio chart :

image

Nothing bearish in this chart.  It needs a major breakdown back below 10.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

The McClellan is slowing coming back to bullish, but it doesn’t seem to be in a hurry and it has some issues to resolve.  This is one of the reasons we like a continued correction call.


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

This was our featured chart of the day.  Watching its reaction to the teat now.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Bears at the cross road, they need to show some control. $ES_F 1650 x 1620

Today’s Economic News:

image

What happened?  All of a sudden our news is turning more negative out of Europe.  That Bubil auction put rates back into the negative column.  We don’t like that one bit.


Quote of the Day:
The hunger for love is much more difficult to remove than the hunger for bread.
–Mother Teresa

Featured Breadth Chart of the Day:

image

We are pretty impressed with the NH/NL chart and how it is holding up on this rally.  We will continue to watch for improvement as the market improves.

 

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

Short: 1650
Long:  1620

image

Here is our thinking.  The currents are all over the place. We are definitely on the road to recovery and it is like riding a two wheel bike.  The big boy, big girl kind of bike.   Those training wheels have helped but it is time to raise them just a bit.  That scares us cause even though those two little wheels in the back offer just a bit of stability, it has become our support on many an occasion and raising them brings up fear because those slots are just so big and we can raise them only so far before they are removed totally.  We know the day is coming.  So we kind of welcome those awkward moments where we tip as it staves off the day when we must stand on our own.

At some point in life the wheels do come off and we do eventually fly on our bikes doing moves and maneuvers we didn’t think we would ever master. So, too, will this economy.  But in the mean time, good news becomes bad for the market and bad news slows the threat of “tapering”.  These cross currents and thresholds are different for everyone so the market becomes chopped up in violent moves as data and timing are interpreted through the eyes of thousands and thousands of traders, investors, and managers.

We think the summer will be full of ups and downs and that this current up is disposed to become a future down with that future not so far away.  Perhaps a double top at 1650?

For now we have 1650 as the next potential turning point with buyer support at 1620.

 

MiM Update:

Embarrassed.  I lost Friday’s data and if any of you read this and have the snapshot values I would be eternally grateful.   These holiday weeks are tough and it feels good to be back to routine. I like routine.

Basically, to review, Friday’s data hovered around 50%.  There was no size to the data.  I thought the new auto-snapshot was all set, it wasn’t, and the data was lost in a java script error.

The meter did work until close however, but I didn’t get any  “wow great!” nor any “what the heck” ones either.  So I don’t think anyone traded on the meter.  I am expecting that we can put it to work this week.

 

 

Comments about the Front US Dollar DX futures contract:

image

As Europe flounders, the dollar continues to try and run to that 86 level.  We have 85 as next rung up and a test at 84.10 likely.

 

Comments about TLT (Twenty year Bond ETF):  

image

Where is all the money going?  Rates are arising.  We do expect one more run at lower rates, but that will require fear and the loss of the market momentum that has hit over the last few days.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

image

Where is our less than 50?  This next few days will be a good barometer of the summer market.  


Cumulative Volume Index:

image

Prices are rising, but the chasing volume is not so impressive here.


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

image

36 percent of stocks are above their 40 DMA.  As we move through mid-may, math is going to get easier as the 40 DMA begins to really start moving down.


New Highs / New Lows ratio chart :

image

We want to be full bear and start laying on the swing short from here, but this chart keeps us nervous.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

Bearish.


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

If we can hold green or maybe even slightly red, this will be the day that the Fat-lady is touched.   This is the test level right now for the bears.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Market seemed strong yesterday, not sure about the end.. sup with that? $ES_F 1625 x 1588.

Today’s Economic News:

image

Interest rates continue to rise around the globe, with deflation in commodities.  We don’t like the combination and would like to see a little inflation on both sides.


Quote of the Day:
Pessimist: One who, when he has the choice of two evils, chooses both.
–Oscar Fingall O’Flahertie Wills Wilde

Featured Breadth Chart of the Day:

image

Two things in hind-site have impressed us with yesterday’s price action.  First, the number of new 52 week highs blossomed and the number of stocks closing above their 40 day moving average  moved higher, suggesting that breadth is quite strong despite the closing price action.  We closed a Russell 2000 A/D line at 3.8:1, that is pretty strong.

 

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

Short: 1625
Long:  1588

image

That head and shoulders target is now our next level up at 1620.  We are looking for a failure between here and there that will result in a spill down to the 1588 area.  Yesterday we called a 1620 high, that was decent and our line at 1606 seemed well placed, too.

MiM Update:

For my fellow meter readers, don’t forget that the markets close early on Wednesday (1pmET)  so the meter will be running starting around noon ET.  Markets are totally closed on Thursday.

 

image

It was all about confusion as the MiM bounced all over the place.  Started grossly on the negative side, swung toward positive and then back negative with small size.  Neither the percentage nor size dictated an advantage to either side.  That early imbalance seemed to reflect the market and that was the trade on an early entry and hold just shy of the close.  It would have been very difficult to do if screens were up as a 150MM buy side started to build.  In reality, there was no trade clearly dictated.  According to the rules, a lack of a signal favors the predominant trend which had been downside since noon.

I did take a closing trade and it clipped my wings, but it was mostly based on the bullish divergence on the ticks we were seeing going into the close.  I went long and that didn’t last very long.

image

 

Comments about the Front US Dollar DX futures contract:

image

This dollar chart remains strong, our next level up is the 83.80 area.

Comments about TLT (Twenty year Bond ETF):  

image

Watching for a touch to the 111.60 gap close.

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

 

Breadth Charts in Full :

Zweig Breadth Thrust:

image

Looking still for that sub 50 reading.  


Cumulative Volume Index:

image

Nothing here.

 


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

image

Still recovering, in fact yesterday was a pretty wide spread recovery.  


New Highs / New Lows ratio chart :

image

Yesterday was a decent bullish-day breadth-wise despite the closing spill.  Our NHs/NLs chart did well and we managed to post 165 new highs on the day.  That is back in the saddle kind of numbers.


Trenders :

Short Term Trender –  McClellan Summation Index:

image

For the first time since mid-May, the McClellan Oscillator is showing a bit of green (still bearish).


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

It looks like Fat-Lady is on a collision course with the 15DMA, the demarcation between our bull and bear attitude.  

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.