Today’s Economic News:
Mostly good still coming out of the economic numbers. For today pending home sales should be the most interesting feature.
Quote of the Day:
Adversity attracts the man of character. He seeks out the bitter joy of responsibility.
–Charles de Gaulle
Featured Breadth Chart of the Day:
We got our turn around below the 56 area that we wanted. We want some more downside follow through to take us to below that 40 value again. Once there we can restart a breadth thrust count for real possibly this time.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
Double bottom in at 1626 area.
We think there is just a bit more downside to come in the next few days, heading toward our 1606 area. So far this pull back is quite healthy. We would expect 1656 to repeal any rally attempt and maybe even 1643.
We did get a significant signal yesterday, a nice 9:1 down volume day. (A day when 90% of the volume on the market was negative).
We have been waiting for that, in fact the lack of that signal was what convinced us that the low for this correction was not in yet last week. We want a 2nd 9:1 day like in June to complete the selling. Until then we remain bearish.
On the MiM:
What a great crowd in our MiM webinar yesterday. Sorry about some of the technical glitches but almost everyone got in ok and got to spend a day on the closing MiM to see it in action, even though that action was somewhat lackluster to say the least. Thank you to our host Jill from The Street.
I tried hard, maybe too hard, to convince everyone that on a day when the ES is down 20+, a lackluster MiM is information. Trading into the close and knowing that there isn’t going to be a big counter move into the close is worth points.
There was a ton of great questions about how I trade the MiM (I am a straight trader long or short futures and very selective about my entries). Yesterday did not meet my criteria because of the lack of size (I want > 150MM) and strong alignment in dollar and symbol percentage (> 66%).
My reading from yesterday, going into 3pm ET with a –4:1 NYSE A/D line, was that this closing auction wasn’t going to matter. The direction from the day should dominate the close. There was some small covering around the reveal time (3:45pm ET), but it didn’t last.
Thank you to those that joined. There is still room on the MiM for others that want to join. Danny has guaranteed that after one month riding the MiM you will understand more about the close and how to trade it. If that is not the case your one month fee will be returned. It is the best education value you can get, like a one month long webinar in the closing batting cages.
If you want to join the meter readers you can go to: Ride the MiM
Comments about TLT (Twenty year Bond ETF):
Earlier this year we called for a sub 100 price on the TLT. We think this counter move here is setting that up. Our downside for now is 101 but we are waiting to see where this bond rally is going to end.
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Breadth Charts in Full :
Zweig Breadth Thrust:
We want oversold again.
Cumulative Volume Index:
Finally some volume.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
There goes the breadth along with the markets.
New Highs / New Lows ratio chart :
Stayed below 90, that is what we wanted.
Short Term Trender – McClellan Summation Index:
Long Term Trender – Cumulative 4-week Highs – Lows (the fat lady):
back to bearish for the fat-lady
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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