Today’s Economic News:
That European service PMI says it all, sandwiched between the German and UK PMIs which show decent growth. The pan Europe one isn’t bad, but the cornerstone economies of Europe continue to pull ahead.
Don’t wait for the last judgment – it takes place every day.
Albert Camus
Featured Breadth Chart of the Day:
We stopped our Zweig count since there is no way to get there in 10 trading days, we want that one more dive, this time with volume.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
Short: 1654
Long: 1606
On the downside, it is the 1630 area and then a break of 1627 that will leave us just a bit more satisfied here. We still await another swoon with some commitment from sellers. A negative 9:1 down volume day. Our target on the downside remains 1606 and we think the market is capped here at 1654 for the time being. On the occasion that we are wrong, the upside target above 54 is the 1679 area. That is the playground for now.
Our trenders remind us that we are in a bearish trend, that means the proof is up to the bulls to show both hunting and gathering skills for the end of the year. We think a weak starting September is ultimately good for the markets going into the close of the year with yet higher prices possible, a cruel sell off over the next couple of weeks in order to be kind into the end of the year.
We are 4 days now selling the close on the MiM, read below:
On the MiM:
Day four of selling on the MiM (-210, –33.5, –504, –208) so they continue to sell the close in here. Trading the MiM yesterday required waiting patiently for that 3:20pm to 3:30pm window to put on as the market rallied a bit from 3:00 to 3:40pm giving a nice long for 3.5 points. You could have squeezed out three on the short side with some fickle trading. I tried to fill in the 3:20 timeframe and could not get my price and it wasn’t the type of MiM values worth chasing.
Watch those last few minutes of the market on these sell days and then the 15 minutes post cash close to see how the shorts are balanced against the longs. We had a nice short covering right into the 4:15pm close. Too many shorts.
If you want to join the meter readers you can go to: Join the MiM
Comments about TLT (Twenty year Bond ETF):
The 3-day-weekend-with-war-drums trade ended on the Tuesday open as the bond piggy bank was opened and sold on the news that the USA is full-ahead-stalled now on it actions. We want to watch TLT base in here, we think it is on track to be sub-100 before the end of the year, but that won’t be a straight line.
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Breadth Charts in Full :
Zweig Breadth Thrust:
Zweig is winding up but which way is the breakout?
Cumulative Volume Index:
Bears looking a bit stymied here on the volume. Some of that volume should start picking up at the end of the week into next week.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
This is getting about as low as it can go and is ready to provide fuel for another run higher. We just want that one more down day.
New Highs / New Lows ratio chart :
Nothing here to read.
Trenders :
Short Term Trender – McClellan Summation Index:
Bearish.
Long Term Trender – Cumulative 4-week Highs – Lows (the fat lady):
Bearish.
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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