Bears at the cross road, they need to show some control. $ES_F 1650 x 1620

Today’s Economic News:


What happened?  All of a sudden our news is turning more negative out of Europe.  That Bubil auction put rates back into the negative column.  We don’t like that one bit.

Quote of the Day:
The hunger for love is much more difficult to remove than the hunger for bread.
–Mother Teresa

Featured Breadth Chart of the Day:


We are pretty impressed with the NH/NL chart and how it is holding up on this rally.  We will continue to watch for improvement as the market improves.


Comments and Levels for the Front ES (S&P500 – Emini futures) contract:

Short: 1650
Long:  1620


Here is our thinking.  The currents are all over the place. We are definitely on the road to recovery and it is like riding a two wheel bike.  The big boy, big girl kind of bike.   Those training wheels have helped but it is time to raise them just a bit.  That scares us cause even though those two little wheels in the back offer just a bit of stability, it has become our support on many an occasion and raising them brings up fear because those slots are just so big and we can raise them only so far before they are removed totally.  We know the day is coming.  So we kind of welcome those awkward moments where we tip as it staves off the day when we must stand on our own.

At some point in life the wheels do come off and we do eventually fly on our bikes doing moves and maneuvers we didn’t think we would ever master. So, too, will this economy.  But in the mean time, good news becomes bad for the market and bad news slows the threat of “tapering”.  These cross currents and thresholds are different for everyone so the market becomes chopped up in violent moves as data and timing are interpreted through the eyes of thousands and thousands of traders, investors, and managers.

We think the summer will be full of ups and downs and that this current up is disposed to become a future down with that future not so far away.  Perhaps a double top at 1650?

For now we have 1650 as the next potential turning point with buyer support at 1620.


MiM Update:

Embarrassed.  I lost Friday’s data and if any of you read this and have the snapshot values I would be eternally grateful.   These holiday weeks are tough and it feels good to be back to routine. I like routine.

Basically, to review, Friday’s data hovered around 50%.  There was no size to the data.  I thought the new auto-snapshot was all set, it wasn’t, and the data was lost in a java script error.

The meter did work until close however, but I didn’t get any  “wow great!” nor any “what the heck” ones either.  So I don’t think anyone traded on the meter.  I am expecting that we can put it to work this week.



Comments about the Front US Dollar DX futures contract:


As Europe flounders, the dollar continues to try and run to that 86 level.  We have 85 as next rung up and a test at 84.10 likely.


Comments about TLT (Twenty year Bond ETF):  


Where is all the money going?  Rates are arising.  We do expect one more run at lower rates, but that will require fear and the loss of the market momentum that has hit over the last few days.

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Breadth Charts in Full :

Zweig Breadth Thrust:


Where is our less than 50?  This next few days will be a good barometer of the summer market.  

Cumulative Volume Index:


Prices are rising, but the chasing volume is not so impressive here.

Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):


36 percent of stocks are above their 40 DMA.  As we move through mid-may, math is going to get easier as the 40 DMA begins to really start moving down.

New Highs / New Lows ratio chart :


We want to be full bear and start laying on the swing short from here, but this chart keeps us nervous.

Trenders :

Short Term Trender –  McClellan Summation Index:



Long Term Trender –  Cumulative 4-week Highs – Lows (the fat lady):

If we can hold green or maybe even slightly red, this will be the day that the Fat-lady is touched.   This is the test level right now for the bears.

Thank you for Reading –
Marlin aka RedlionTrader @redliontrader


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