Chin up.. Think Up for a few anyways.. Take a chance on the small caps $study

Around the Globe

    Asia – CLOSED

  • Shanghai (China) -1.21%
  • Hang Seng (Hong Kong) -3.19%
  • Nikkei (Japan)-1.12%

Europe as of 7:26am EDT

  • DAX (Germany) -0.53%
  • FTSE (UK) -0.63%

Today’s Economic News:

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The UK came through today with stronger jobs data than expected.  In the US a healthy mortgage application number has started the day.  Still some big news events and releases left to set the market action.

Quote of the day:
If we were to wake up some morning and find that everyone was the same race, creed and color, we would find some other cause for prejudice by noon. – George Aiken

 

Current Allocations from our room:

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Performance Month to Date from our room:

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Current Breadth Readings:

 

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Our “breadth chart of the day” is the NH/NL chart that is showing extremely stretched.  We are making a rare counter trend call (the trend being down) for a multi-day bounce for some mean correction.

 

ES SP500 Futures Comments:

 

Maybe we are just tired of the down action and we think up, but there is evidence in our breadth charts to indicate some upside price action is needed, even for the bears story, to bring our indicators back to some norms.

 

Overnight we landed on our 1321 target area and are now 10+ off that zone.  We think buyers will see this as a decent buy in here and multi-day shorts will add to the price squeeze in the up side direction.

 

We are leaving all our targets the same as yesterday.   We think upside 1355 area will be a piece of resistance’ and a retest of the the overnight low should hold. 

 

The upside should be lead by the NQ and Russell 2000.  We think those offer the best risk/reward ratio on any bounce here.

 

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US Dollar DX Futures CommentsConfused smile

So much for containment on the 81 area of the dollar.  All eyes on 82.  That was the best price action yet on the dollar rally.  Best to let it work its price and watch.  If our call on the market bounce is correct, we should see our first red bar in the dollar over the next few days. image

TLT Twenty Year Bond EFT Comments:

Same comments on TLT as the dollar.  A good run yesterday.  If the European wheels can stay attached for a few more days, we think there is some downside before any more upside resumption.  Watch for TLT to come back to the 119.60 gap fill area this week.

 

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