Fumes are starting to waft in, time to switch tanks $ES_F 1455 is our short area, 1438 long

Around the Globe

    Asia – CLOSED

  • Shanghai (China) +1.45%
  • Hang Seng (Hong Kong) +0.09%
  • Nikkei (Japan)+0.89%

Europe as of 7:23am EDT

  • DAX (Germany) -0.12%
  • FTSE (UK) -0.04%
  • (UK) -0.36%

Today’s Economic News:

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The UK continues to disappoint.  Watch initial jobless claims numbers today  and eyes on the 8:30 press conference with the ECB.  Oh, and the 2pm ET FOMC Meeting Minutes might have some afternoon delight in it.  Don’t get caught off-guard there.

Quote of the day:
Speak when you are angry–and you will make the best speech you’ll ever regret. – Laurence J. Peter

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

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We still love that NH/NL chart we have shared for a few days now, but slowly it is becoming the life-ring for the bulls.  Today we are sharing the 40 DPI.  This is the number of stocks on the NYSE that are trading above their 40 day moving average.  Right now that number is 65%. Not bad,  and the good news for the bulls is that there is room for improvement. 

Our concern here, however, is the divergence from yesterday’s close.  You can see on the  charts how price on the SPY moved positive while the number of stocks above their 40 DM decreased.  That shows underlying weakness in our game of Jenga.  It takes many more pieces than you think to bring down a rallied beast like this, but another piece was removed yesterday. Developing.

 

ES SP500 Futures Comments:

Short: 1455
Long: 1438

Our 1455 area is a short area for today.  Our short area yesterday of 1447  gave an afternoon trade that was reversed into the close and now overnight, the markets have climbed higher.   That puts our next leg up target to short around 1455.  On the downside, we think the bulls would protect with their lives and liberty the 1438 area.  Our Globex pivot of 1443 is also an interesting area. 

We remain bullish, but we are starting to smell some fumes in the plane.  It could be we haven’t switched tanks yet, or we could be gliding in for a landing, at least if we are lucky.

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US Dollar DX Futures Comments:

An overnight rally in equities has the dollar ducking back below its exposed 80 level.

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TLT Twenty Year Bond ETF Comments:

Bonds continue to do nothing here as they slide sideways. In case I pick up a new reader today, we are watching an epic battle between 125 and 124.  We expect it to fail, but the pattern is looking increasingly like a continuation pattern to the upside. 

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