We had a really great rainbow at home yesterday and I tried to capture it using panorama. A sense of the intensity is missing, maybe I can process it but I have not seen such an bright rainbow in a long time (note the reflection in the water). We could see the 2nd inverse bow, also, which if you squint you can see in this picture. We couldn’t find the pot of gold so we have to trade today.
Today’s Economic News:
Not sure why the German Service PM was such a disappointment, it is above 50 so that is ok. UK on the other hand, nice. In the US for today it is the ISM number that will be watched.
Quote of the Day:
All I Really Need To Know I Learned In Kindergarten
(I think these quotes, like me, are starting to repeat).
Featured Breadth Chart of the Day:
This market looks like it wants to run again, but before it does that, we think the new highs need to strengthen just a bit more, at least the ratio does. I have highlighted the “trending” signal that sets up when we are moving higher, you can see that we are currently off that pace. This run is really beginning to look ragged.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
We continue to have doubt about the strength of the legs of the bull to put together another good run to the highs. We are watching the ATR though, and it has moved back down into bullish rally mode. It is some of the breadth charts and the lack of momentum here that makes us think that at least the lug nuts are loose now on our rally car.
That breadth could gather and become the fuel for the next rally higher. We have a short term goal of 1706 for a possible resolution for the top and 1691 as a quick dip target from here.
On the MiM:
It is worth noting that we had serious network issues on Friday. I was unable even to post. For those not aware, there was a major outage at our DNS provider that had about 5M sites down, ours being one of them. We are putting redundancies in place at MrTopStep to ensure that a single DNS failure does not take us out. Our apologies.
The frustrating thing about Friday’s action is that our data-servers were fine and continued to run, just nobody could get to them. So this is Friday’s snapshot and it shows us what we missed. Again, we see a late arrival building buy imbalance. Not as strong as Thursday’s, but strong enough to issue a buy.
My personal breadth work is raising warning flags on the loss of breadth momentum on this attempt to rally so I am curious to see if we can use the MiM data to help us find the top of the rise. I am finding these late arrivals interesting.
We did rally into Friday’s close.
Comments about TLT (Twenty year Bond ETF):
Our 104.90 target was perfectly placed. We would like to see 107 tested and the 105.25 for a hold.
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Breadth Charts in Full :
Zweig Breadth Thrust:
Can’t seem to get itself going.
Cumulative Volume Index:
New price highs but not new volume highs
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Again, not able to muster the broader market to move.
New Highs / New Lows ratio chart :
This is our highlight chart, see above for comment.
Short Term Trender – McClellan Summation Index:
Bearish, even as price moves higher.
Long Term Trender – Cumulative 4-week Highs – Lows (the fat lady):
Bullish, continues to feed off days like Friday’s 402 new highs.
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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