Squeezed in the middle, Watching $ES_F 1463 today and 1441 for a buy

Around the Globe

    Asia – CLOSED

  • Shanghai (China) +1.24%
  • Hang Seng (Hong Kong) +0.48%
  • Nikkei (Japan)+2.00%

Europe as of 7:09am EDT

  • DAX (Germany) +0.30%
  • FTSE (UK) -0.10%


Today’s Economic News:


Great numbers out of China last night.  That had the Asian markets in a trifecta.  The UK gave us good numbers.  We watch the Thursday initial jobless claims to see if the number climbs back up to the upper 300Ks.  Watch a possible revision from last week to help establish a trend.

Quote of the day:
There are 350 varieties of shark, not counting loan and pool. – L. M. Boyd

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


The New High/New Lows continue to be the spotlight.  We watch them for signs of weakness as we try to break out to new highs. 


ES SP500 Futures Comments:

Short:  1463
Long:  1441


We kicked up our short zone by a point to the 1463 area.   We think that is the new zone for a possible hold and reversal.  The market remains uber bullish and breadth continues to support that.  So despite the XX days green type studies, watch out for the XX+1 day.  It could be just as bullish as yesterday.

On any sell off, we think with this breadth and volatility that we should see support in the 1441 area.  It is the Thursday before OPEX and that usually sets the low of the week.  That would be quite a plunge, but in general, this is usually the most negative day of OPEX.

So what am I today?  Well, if we stay and hang at 1458, I am neutral.  If we move down to 1441, I will be a buyer and joining what I hope is a rally, if we open and breakout to 1463, I will be looking for a short and checking carefully for bearish indications that this could turn into something more.  I really don’t think today is that day.



US Dollar DX Futures Comments:

We are watching the 79 area.  The double bottom here is going to help us call the next move.  A break lower and the equity markets should move higher.   Back to 80 and the market should start another corrective round.  Above 80 and  trouble in Euroland   will cause some longer-term rethinking and lower valuations in stocks.


TLT Twenty Year Bond ETF Comments:

Like the US Dollar, the TLT is on a lower exploration.  Not to the same lows as the dollar, but testing 120.  If that fails, we would expect to explore the 118.50 area again.  That would have the stock markets at new highs.   We are looking for  a reversal and move to the upside and to see some correction in the market.  A move above 125 and we are going to have trouble in the markets into the end of the year.


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