Wednesday’s Markets Thus Far:

Asia:

  • Shanghai –0.07%
  • Hang Seng 1.7%
  • Nikkei 2.46%
  • Japan Industrial Production (MoM) 0.4% beats –0.1% expected but less than the 1.3% last report

Europe: as of 7am EDT

  • DAX +1.58%
  • FTSE +0.56%
  • UK Index of services –0.5% beats the –0.9% expected and –0.6% last report
  • UK CBI Distributive Trades Survey 15 big beat of –1 expected and 6 from the last report

USA:

  • 7:00am MBA Mortgate Applications +2.7% last report
  • 7:30am Challenger Job Cuts (YoY) +20% last report
  • 8:15am ADP NonFarm Employment Change 210K expected 217K last report
  • 10:30am Crude Oil Inventories 2M build expected 2.1M last report
  • 10:30am Gasoline Inventories –2M drawdown expected –5.3M last report

Quote of the day:
Exit, pursued by a bear. – William Shakespeare

 

Current Allocations:

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Breadth:

 

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Breadth returned on Wednesday’s action.  All eyes are on the markets move today for a Zweig breadth alert.

 

Zweig Watch Day 10 – The Final Chapter.

This is it.  The last day of our ZBTR watch.  I haven’t done the back calculation yet, but I think a NYSE A/D line of 3:1 should secure it.  If you are in the room (http://ttthedge.adobeconnect.com/traders) we will be watching intraday.

 

Holding this gap and a rally today are needed. In case you haven’t been reading the other posts, we need the white line today to close above 61.5.  That would make a ten day move from oversold to overbought,   something that hasn’t been accomplished sine March 9, 2009.  Remember that day?  You should because the SPY was 1/2 what it is today.

 

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$SPX chart:

 

Three days now the bulls have tried to break that 1319.50 area. On Tuesday, they just ran out of time.  The Monday selloff was quickly bought after a weak open and a kind of ugly trend day up, (ugly in the way of technicals, price was fine), grinded the day back up to our bull target.

 

That 1305 line now becomes major resistance. On Thursday we will move the bear line up to 1305 based on today’s action.  Maybe I should have moved it today so think of it as a baby bear line. A cub line as you will.

 

Futures as of 7:30am EDT have us opening above the 1319 area around 1328,  but we have some Jobs news pre-market to help establish the starting line.  If we do break above 1319 and the 1321 during the cash market market watch 1325 and 1327 area today if the bulls can handle the bears we should at least close in there.

 

The momentum remains strong and I remain long.  I thought there might be a possibility of being trapped in some sideways action, which we still could be.  A close between 1305 and 1319 would confirm the sideways thesis. A good close above and off we are on yet another bull leg. A close below 1305 area and we have to be planning for a retest, but that is increasingly looking unlikely despite my concern about the lack of a 9:1 up volume day.  Where is it? Maybe I will get my answer today.

 

 

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