How far will they go now that $ES_F 1406 is lost? We have a buy area at 1394 $study

Around the Globe

    Asia – CLOSED

  • Shanghai (China) -0.99%
  • Hang Seng (Hong Kong) -1.25%
  • Nikkei (Japan)-1.17%

Europe as of 7:15am EDT

  • DAX (Germany) -0.25%
  • FTSE (UK) -0.20%


    Today’s Economic News:


    The UK news is a downside surprise today. We will blame the Olympics.  In the USA, we are looking for Durable goods orders to drive the markets.  Expectations are for a turn-around from the last report’s weak numbers.

    Quote of the day:
    If you shoot at mimes, should you use a silencer? – Steven Wright

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


    Both trenders are now in the neutral camp.  Our Zweig Breadth indicator is the index of choice today.  We are having a nice correction but the other breadth signals are flagging that the underlying is still quite bullish. 


    ES SP500 Futures Comments:

    Short: 1424
    Long: 1394

    We continue to think that the market is setting up for another move to the highs, at least an attempt.  If/when that attempt comes, we will be looking at breadth for healthy and unhealthy divergences.  Right now the market remains in a corrective phase and yesterday’s break of 1406, then 1402, has us pushing our buy zone down just a little to the 1394 area.

    Our upside target on the next move up has also been lowered now to 1424 (the previous high).  For the bears out there, you want to hold the 1406 area.   A run to 1410 would be a nice spot to short also.  This all preposes that we do not break down through 1392.

    This has been a very, very tough rally for trenders as the corrections have been scary.  The S&P now sit 2% below Monday’s highs. It take confidence to hold a 3% correction.  If you are a “player”, we still think we are in the death throes of a top and there is money to be made both ways, the trick is hitting the turns.

    Have a great weekend everyone, be safe and enjoy what is left of summer.


    US Dollar DX Futures Comments:

    A hold here on the dollar as the markets continue to correct.  Our downside target and prediction remains at 80.85.


    TLT Twenty Year Bond ETF Comments:

    The 125 area is the place to watch.  If we see weakness here today in bond buying, particularly going into a weekend, we think we will bet a downside move that will follow through.  TLT remains volatile, however, which makes predicting levels difficult.   We still have a downside target of 118.50 with a promise of establishing a new upside target this weekend.


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