Today’s Economic News:
Waiting for an interest decision out of Europe. Japan just dumped a pile of cash for a massive intervention plan.
Quote of the Day:
The secret pleasure of a generous act Is the great mind’s great bribe.
Featured Breadth Chart of the Day:
Here’s the thing – the Market is gapped down this morning for the New York open, but despite some really ugly charts, the NHs/NLs returned to bull territory and in the 90s. They will have to do a bunch of work to hold that today, so watch this open and see if it gets bought up, or if we bounce from 1682.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
A while back I was playing with titles to see if I could emotionally manipulate the number of opens. It did work to some extent and I did find a direct correlation between the number of explanation points and the number of opens. Today’s title will be interesting data, because who doesn’t want to see what nobody sees!!!!!!!!!!!!!!!!!!!!!
We have a bit of a quandary here. The bull is down on the mat, the count is up to 8 or 9 at this point, and every time he lifts his heavy head above 1694, the bears don’t have the decency to even let him stand, instead they knock him down again. Poor bull.
What you and I see here though is decent breadth. While the indices are having a tough time in here, the market is putting a decent number of new individual stocks higher. 121 new highs on the NYSE.
The Nasdaq 100 was 3:1 positive on the A/D line yesterday.
Here is our game plane: We like long on the open to see if we can’t get some upside buying at this level. If not, we want to watch 1682 and see if there are buyers waiting in ambush there. Our trenders remain bullish, the Zweig is decent, and the NHs/NLs ratio is bullish, so we are giving the pinned bull the benefit of the doubt for today.
On the MiM:
We had an evaporation day on the MiM yesterday. We have had those before and I will share a couple of the snapshots. There was disappointment as MiM set up for a sell only to see in that 15 minutes before the reveal it was evaporating and it was time to exit the short. Something, heaven forbid, that the MiM failed. First, as I always say, the MiM is just data and it is accurate. Our trading of the MiM is a different thing.
The MiM is just telling us what the current imbalances are, what the market is going to do with that is a different thing and that is the edge we are seeking. Somewhere between 3:30pm and 3:40pm the sellers had a change or heart, or their sell got satisfied or whatever and the orders went away and hence our signal evaporated. For me, that is the time to get out or at least get protective. I took a 2 point stop and I don’t consider that a failure since it could easily have been a 5 point stop, except that the MiM signal was gone and for me that means I should go, too.
Here is the MiM from July 16th:
Again, we start off with a strong indication that we are going to sell and instead we end up with a reversal. If you shorted early, you needed to get out.
Here is August 22nd:
Another strong early MiM reading for the buy side and, again, an evaporation and indication that if you are long it was a good time to exit.
The MiM is worth looking at for any trader trading in the final hour. A sneak peek at the closing imbalances can help build confidence or have you add protection into those last crucial moments of the day that often makes or breaks your daily profit line.
If you want to join the meter readers you can go to: Join the MiM
Comments about TLT (Twenty year Bond ETF):
Holding, looking for 108.25
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Breadth Charts in Full :
Zweig Breadth Thrust:
Just a bit stronger.
Cumulative Volume Index:
Upside volume has stalled out.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
New Highs / New Lows ratio chart :
Short Term Trender – McClellan Summation Index:
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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