Looking for some range expansion and a buying opportunity at $ES_F 1406

Today’s Sunrise from Fortunes Rocks, Maine.

Haven’t taken a sunrise picture for a while.  I tend to rise with the sun in the morning and if you read the time on the picture, you will notice that sunrise here in Maine is now around 6am.  That is too late for me to get up and complete my morning tasks before the markets open and I need to transition to waking up in the dark again.  We have lost a full 90 minutes of sunlight since the end of June and that includes about one hour in the morning.   It is beginning to take on the look, feel, and smell of fall here already.


Around the Globe

    Asia – CLOSED

  • Shanghai (China) +0.54%
  • Hang Seng (Hong Kong) -0.02%
  • Nikkei (Japan)-0.16%

Europe as of 6:40am EDT

  • DAX (Germany) +0.37%
  • FTSE (UK) +0.32%


Today’s Economic News:


Still very light on news.

Quote of the day:
All animals are equal but some animals are more equal than others. – George Orwell

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


We have a real divergence signal on the 40 DPI.  What should scare the bears, however, is the fact that prices can rise for weeks on these momentum slowing divergences.

ES SP500 Futures Comments:

Short: 1420
LongB: 1406
Long: 1390

The Bullish creep continues.  We still think upside progress is limited and want to short these little extensions.  Today that area is in the 1420 area.  If all goes well, we will introduce some volatility with the rest of the week.  That would mean a nice downside more or less than 1% for the ES or, as we like in the LongB trade, a look at the charts should we hit in the 1406 area.  A deeper correction for the markets would take us down to the 1390 area.  That is just too far away to  play today, it will be there all week. In the mean time, watch for a little range expansion like a 10+ range day (remember those?).

The US Dollar is testing a key area.  If it breaks down it should add some more upside to the markets.   There is no real news today, OPEX is now behind us so it is up to the crazy season in the US with the presidential election in school yard brawl mode (this is the phase of the election where the other guy works hard to drive up the unfavorable numbers on their opponent before the race becomes legit via the conventions), it seems like it’s always crazy season in Europe, and Syria and Iran are just waiting for someone to light the match so there is plenty of area for surprises.

Most likely, as always, is same old.  Watch for some range movement.


US Dollar DX Futures Comments:

Finally, something to watch in the US Dollar after 2+ week of just sheer boredom.  We have the dollar pushing and testing the 82 area which, if it does break, should get some wind under the wings of the Euro and give flight to some more upside in Equities.  It will not be good for the oil story, however, as far as the consumers are concerned. 


TLT Twenty Year Bond ETF Comments:

The 121 area is still holding on TLT, mark that line.  After 10+ points of correction, it is time to find a base camp.


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