Watching for a test of $ES_F 1390 area, remaining bullish.

Around the Globe

    Asia – CLOSED

  • Shanghai (China) +1.76%
  • Hang Seng (Hong Kong) +1.02%
  • Nikkei (Japan)+0.31%

Europe as of 7:42am EDT

  • DAX (Germany) +0.13%
  • FTSE (UK) -0.58%

Today’s Economic News:


We continue to see weakening PMIs out of Germany, while the UK, US and China are bucking that trend.  That will put pressure on the Euro and a fire under the US Dollar.   There was a ton of news overnight, we left the smaller European countries in to show how the PMI issue is pan-Europe with just the UK and island of recovery.


Quote of the day:
I’m living so far beyond my income that we may almost be said to be living apart. – e e cummings


Current Allocations from our room:



Performance Month to Date from our room:



Current Breadth Readings:



We continue to use the McSC as our featured chart to remind us that the breadth remains bullish.


ES SP500 Futures Comments:


Good Morning,

Our ES has continued to weaken overnight based on some not so nice PMI news out of Germany and continental Europe as a whole.  The UK continuess to counter the PMI trend as did the USA and China.  Our Jobs theme starts today with the ADP numbers and rolls right into the bid-daddy non-farm payroll.


For today, we see the weak start and are looking for a possible retest of the 1390 area which would be 2% back from the highs or yesterday and the Globex S1 pivot area.  There is much chatter about a Bin Laden high type reversal which was exactly one year ago today.  That reversal sent us into a tumultuous summer.  Until we see breadth follow though to the downside we have to remain in the frame of a bull and buy the dips.  A break of 1376 will have us changing our minds.


Our reversal zone was off by a little yesterday when the buy programs ran the stops one last time up before finally reversing.  Today we move our sell area up to the 1426 area and our buyzone in the 1390 area.




US Dollar DX Futures Comments:

The US Dollar had a nice reversal on Tuesday with the good ISM data.  We expect that the Head and Shoulders will signal failure, but it is all about the Jobs data on Friday.  A weak number and the dollar should head back down to the 78.75 neckline.   It is all about Jobs this week and the relative strength of the US economy vs. Europe.


TLT Twenty Year Bond EFT Comments:

We were making so much progress yesterday with the TLT drop.  We are looking for a break of 116 as confirmation and fuel for and extending run to new market highs.  Today we have a set back.  For now TLT remains contained between 116 and 118. image

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