Shaken, But Not Stirred, Bulls Find Their Footing $ES_F 1461 x 1449 $Study

Around the Globe

    Asia – CLOSED

    • Shanghai (China) +1.61%
    • Hang Seng (Hong Kong) +0.37%
    • Nikkei (Japan)+0.70%

Europe as of 7:09am EDT

    • DAX (Germany) -0.39%
    • FTSE (UK) -0.08%

Today’s Economic News:

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China is on fire…

Quote of the Day:
I am not a vegetarian because I love animals; I am a vegetarian because I hate plants.
–A. Whitney Brown

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

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Our CVI never gets a lot of play time on the big-boy front page so we will feature it today and talk about how it behaved over the last few days. The reason we don’t bring it up much is that it pretty much matches price as you can see.  The red trendline form the mid December highs to yesterday is sloping up on this higher high, that tell us that the volume coming back up into the highs was greater in comparison to the volume of trades that took us into the abyss.  That makes a  bullish confirmation on the move.  Had we been a little short on the CVI in here, we would be looking for other tell-tale signs of weaker tops.  So despite the 4% move lower, the CVI wass letting us know that volume on the downside was not in-line, leaving breath a little shaken, but not stirred.

Right now, it is a stronger top and the bulls need to put in some follow-through.

 

ES SP500 Futures Comments:

Short: 1461
Long: 1449

We are looking for strength to hold today in a fairly tight range.  We are watching 1461 as the new upside exhaust point; yesterday it was 1458 and I think the high was 1457.50 or close.  On the downside, we think that the 1449 area should find buyers.   For us, that is as tight a range as we get.

We should not retrace more that 50% of yesterday’s push and if we do, a 10+ upside watch for another upside day tomorrow.

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US Dollar DX Futures Comments:

Concern on the dollar as we watch and wait to see if the dollar and markets can rise stride by stride.  That is not normally the case and for the sake of sameness, we would like to see that 80.50 hold here with a retest of 79.50.

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TLT Twenty Year Bond ETF Comments:

We treat the dollar and the TLT as the Bobbsey Twins (who were the Bobbsey Twins?), but it appears only one behaves at a time.  As the dollar is running against us, TLT has now broken that 120 area we have been waiting for.  We have a 118.50 target on the TLT.

 

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DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. TTTHedge.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. TTTHedge.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Breadth is Remarkably OK… $study

Despite the panicked close on Friday, the breadth, while weakened, remains fairly ok and stretched to logical bounce areas.

Our Zweig is down to the 43 area:

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And while price is making a lower low than mid-December, CVI is relatively stronger; that is a bullish divergence:

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Not quite the same for the 40 DPI:

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Our NHs/NLs hasn’t suffered much and there was actually an uptick on Friday!

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Our trenders are suffering but they are not ready to call a downside trend yet.   It remains a waiting game as the quality of the bounce is determined.

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Monday OPEX Cleanup, Seasonally Strong… We Like Up $ES_F 1380 $study

Around the Globe

    Asia – CLOSED

  • Shanghai (China) +0.11%
  • Hang Seng (Hong Kong) +0.49%
  • Nikkei (Japan)+1.43%

Europe as of 6:50am EDT

  • DAX (Germany) +0.26%
  • FTSE (UK) -0.10%

 

Today’s Economic News:

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Light on news today.  Watch those toldos retractiles on existing home sales numbers @ 10am EST.

Quote of the Day:
Victory is always possible for the person who refuses to stop fighting.
–Napoleon Hill

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

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A Zweig Breadth Thrust countdown has officially begun.  Today will be day 1.  If by day 10 we can get a reading above 61.5, we would have a very high probability of another long bull run.  We are doubtful and think that this Zweig will fall back to earth (below 40) in the not too distant future.  Than a re-launch that would take us to a higher orbit.  But the count has begun.

 

ES SP500 Futures Comments:

Short: 1380
Long: 1348

We like this gap up today.  We actually wanted a little bit bigger, as the larger the gap, the larger the trap.  If we could get +10, that would force a lot of shorts out and scare some bulls back in that think they may have missed the bottom.  That would get us a long way toward our goal of 1400 before this market decides to test that bottom again. 

We think 1380 marks the top over the next couple of days and is a decent area to short, at least on a short term basis.  On the downside, should we test and probe 1348, we think there are enough buyers around now to support the market from there. 

It is still a negative news cycle:  war,cliff, and austerity; but corporations adjust and move forward and that is what drives the markets.

 

 

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US Dollar DX Futures Comments:

The fact that the Dollar can not get a rally going has us a little bullish on the markets right now.  Watch that 81.30 area for a break.  If it does, we are going to see the market lows again.

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TLT Twenty Year Bond ETF Comments:

TLT is slow to turn, but we think it is happening, and 124 is in the crosshairs.  Watch today for bond weakness as money comes back into the promise land of QE and backstops.

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>>> Follow us @redliontrader<<<<<

 

DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. TTTHedge.com, its  officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. TTTHedge.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, also
and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.