FOMC, JOBS, OLYMPICS It is going to get a little bumpy $ES_F 1394 or 1363?

Around the Globe

Asia – CLOSED

  • Shanghai (China) +0.94%
  • Hang Seng (Hong Kong) +0.12%
  • Nikkei (Japan)-0.61%

Europe as of 7:11am EDT

  • DAX (Germany) -0.21%
  • FTSE (UK) +0.80%

Today’s Economic News:

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PMIs almost on a worldwide miss, except if you look at Spain and Italy.  Could this be a good sign?  Busy week this week, FOMC today and we start the Jobs theme for the rest of the week.

Quote of the day:
Who is more busy than he who hath least to do? – John Clarke

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

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Breadth chart today is our 40 DPI.  The trenders on breadth are both pointing bullish, but the concern for the bulls are divergences like this.  Although we hit higher price levels, the 40 DPI is not having the same success.  That loss of momentum on each of these last three thrusts is telling us a smaller and smaller subset of stock is carrying the markets.  As a word of caution, price can run higher for a while during these times.

ES SP500 Futures Comments:

Short: 1394
Long: 1363

 

Ranges remain tight with a threatened breakdown that was saved by Europe.  To repeat something we talked about last week about the interventionist, that smoke cabal of finance ministries around the globe, talk is cheap but implementation is difficult.  The USA and China are pretty autonomously controlled (USA has an independent non-political(?) FED) while Europe has… well, Europe.  The point being, actuality will not able to match rhetoric and expectations.

For now though, the range remains tight with FOMC up on the table and the beginning of the jobs cycle going into the end of the week.  We like the 1363 area for a test, maybe cheat a little lower to the 2% pullback area (1360).   The next upside extension target we see is 1394.    We still think the bulls need to take a step back here and, although our breadth is still flagging a green background for the bulls, the burden of carrying that charge is falling more and more on the leaders of the herd.

 

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US Dollar DX Futures Comments:

The Dollar is in a bear flag with one breakdown tease, it certainly looks ready to fall.  Should that happen, another shot of adrenalin should hit the equity market’s bulls for another run higher.

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TLT Twenty Year Bond ETF Comments:

TLT is in the middle of the range.  It did strike me yesterday that I don’t have an in-between target for TLT.  I have 118.50 or 135/136 as my targets.  That is a big range.  But the areas to watch remain the 130.50 neckline which we are now below and the 125 support area.  Those two zones should act as attractors.

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