Today’s Economic News:
All eyes on FOMC today. That can have a reversing effect so there is opportunity there. Existing homes at 10am, they have been bullish. Let’s see if we can string that together.
Quote of the Day:
It is better to suffer wrong than to do it, and happier to be sometimes cheated than not to trust
Featured Breadth Chart of the Day:
We mentioned yesterday that the terrific-Tuesdays was a great day for the bulls to correct some of these breadth issues. They did not, and in fact the Zweig is even worse today.
We watch for price weakness and for the number of New Highs to come off as further indication .
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
OK.. What is the pattern again? Monday hold, Tuesday Thrust, Wednesday follow through..
We are making weaker and weaker highs and when that pattern will stop of course we don’t know, but the number of stocks hitting their 52 week new highs is now at 417 and that is a very large and strong number. We still have entrenched bullish sentiment.
Meanwhile look at the 40 DPI below, there are issues that are slipping away in here. They will either rotate back in at some point to become leaders and take us higher or if too many join the group we will begin, finally, to see the price action reverse. For now we live in a market that gives us only 0.5% pull backs.
For today, we like just a bit higher holding, that scares us though as we tend to tighten up going into FOMC statement and then break out so careful around 2pm ET. We continue to look for developing a 3% pullback, hence we are chasing higher with price and now sit at 1623 on the downside.
I am putting the finishing touches on an Indicator to help trade Mark Fisher’s ACD system. This is an opening range breakout system that uses unique values per symbol to establish a buy-above or sell-below range. I have not traded the system so I am not sure of its efficacy, but like all GOOD systems it does put definition and maps the market to help you seek out entries, risks and exits. To me those are the most important things in a system, as it allows the brain to process in a logical manner what it sees and then to sharpen the recognition of successful setups and not so successful.
Mark will be doing a live webinar tomorrow at 9:00am ET where he will trade the opening range. I am only book taught on the ACD so it will be very interesting to see the inventor trading it. I hope you can attend. Reserve your seat here
Comments about the Front US Dollar DX futures contract:
The dollar is actually making a head and shoulders top in here and we need to watch that. A break of the 83.70 area would take us back to 83. We want that neckline to hold and see a reversal out and a move up to the 85 area. Maybe today’s FOMC is just the thing to do it.
Comments about TLT (Twenty year Bond ETF):
Thus far our higher low is set, not onto a higher high. 116 not broken.. that is good.
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Breadth Charts in Full :
Zweig Breadth Thrust:
Cumulative Volume Index:
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Bearish Divergence (Note that I just noticed that the title to the graph had the word below. That is of course incorrect. This chart is the number of stocks trading above their 40 day moving average. So currently we have 74%. At the beginning of May it was closer to 80%, so despite higher indexes there are symbols slipping below the surface.. that makes this indicator divergent).
New Highs / New Lows ratio chart :
Still amazing.. and I won’t be convinced of a turn until this one turns.
Short Term Trender – McClellan Summation Index:
Continuing to flag building weakness.
As happy as a cat on a tuna boat.
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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