The way I see it, the market is trading between 1693 and 1672, like a trapped high pressure system, both sides trying to gain a strategic advantage. Our short term trender has gone from Bullish to Neutral today and there is indication that some of the underpinnings are a bit weak. Yesterday I discussed the weakness for risk and again,like yesterday the Russell has laid low with an A/D line of nearly –4:1. Our NYSE A/D line was almost 2.5:1 and that has the Zweig finally below 50. For today, I would be watching that 1693 area for a bullish test. Should it give, say 1695 or more, we would be very impressed, especially considering some of the weakness momentum we are seeing in the breadth charts.
On the ATR greater than 3 watch, you can see we have done a decent pullback, that actually favors the bulls just a bit in there. If we decide to negatively move, then 1672 is clearly an area of interest and for us, 1666 is the line in the sand.
Prices not rising may seem weak, but maintaining here is quite bullish. The best the bears can do is about 1.5% back from the highs and today, despite the weaker A/D lines, we are closing in on just 0.5% back from the highs. There is no room for a bear victory dance in here. The elevator has stalled indeed, now we will find out how strong the cable is.
I would like to see one more shakeup and then some selling to come in for a bearish August, but we might just get this Bermuda high that stays in place for a few more weeks.
On the MiM:
The MiM just seemed boring yesterday. I know we all want to open that URL http://closingimbalance.com and see a 90% 500MM signal to trade on. It doesn’t happen that way every day and the MiM closing data was not strongly directional. Don’t try and create a trade when there clearly isn’t one.
For those that have access to the MiM, you were better off than most because you knew during the last hour that there wasn’t likely to be a big spill into the close because there was no MOC to fuel it… and knowing that there is nothing is something. Right?
This is our new daily snapshot that now includes the percentage of symbols that are biased one way or another. We have had a series of divergent data from the MiM where there symbols can be 3:1 in one direction and the dollar imbalance showing the other direction. Even yesterday as we moved into the the close we had 62% of the symbols showing buy imbalances while the MiM was a neutral 53% with a small 28M positive imbalance showing. The more lined up the market is, the more we like the trade. The new data has been applied to all of July’s snapshots and is available to anyone for study. http://closingimbalance.com/snapshots-mim