Today’s Economic News:
Look at those PMIs from around the globe. There is suspicion about the China numbers as the independent HSBC PMI continues to diverge from the “official” Chinese government version.
Quote of the Day:
Nothing is too high for a man to reach, but he must climb with care and confidence.
–Hans Christian Andersen
Featured Breadth Chart of the Day:
Our Zweig is still not recovering, even as we try and make a 3rd attempt to break out higher.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
We sit far apart on our top and bottom calls, 1697 x 1666, 30 points! Looking at our ATR you can see that volatility is expanding and that is not the way that new highs and follow-through rallies are made. The market is expending energy just to hold here.
We have been looking for this last push to move up and exhaust. We think this might actually be it after some more upside first, though.
We won’t know for sure until we break that 1672 area. Globally, the numbers are quite bullish with PMIs all beating expectations and numbers above 50 showing expansion. Growth, though, is a dual-edged sword as expansion means time for more austerity and pulling back market stimulus to more reasonable levels.
Our trenders remain divergent with our shorter term trender already signaling a turn to bearish. The Fat-Lady remains stubbornly bullish. We are waiting. In the meantime, expect more of those violent 10 point intraday moves.
On The MiM:
I have put in both shots today to show just how strong the orders were to get out yesterday. 98% to the sell side, 91% of the symbols were showing sell imbalances. That is wholesale selling, but today the market is just absorbing what could be just end of the month cleaning.
Today will be another day. I did get some great emails after the close as this was the best setup in July for the MiM by far. There was no doubt about what the meter was saying, none of the nuance of divergent symbols, or big sellers or disappearing orders. The numbers were bearish out of the gate and grew each 10 minute interval. If only they were all that easy!
There have been several requests to include a chat function with the MiM. I have been hesitant to do that as I do try and get into the MrTopStep IM Pro room each day to monitor and trade the MiM with the group in there. Yesterday we captured most of that 12 point move as Sam Easely had posted in the room around 3:12pm ET:
Sam_Easley (15:12:51): the bears algos are licking their chops es 94 we will see if they got their dream short of the summer
That made most of us fence watchers pull the trigger and get in what turned out to be a great short confirmed by the MiM. The MiM is now free with an IM Pro membership, so if you want to be with a group of excellent traders and trade using the MiM, that is one option. If you haven’t taken a free trial of that service you can do so at http://mrtopstep.com/free (the free trial doesn’t have direct access to the MiM, but you can follow the trades).
I also want to make sure that we separate my trading and blogging from the service itself. The MiM is data. It is not a trading system. It is very unique data. Data not available anywhere else. I think it is valuable data.
You as a trader have to decide for yourself if it is worth the Monthly cost. Certainly yesterday paid. I write my blog and share those snapshots as glimpses of how I am approaching, as a trader, trading this data. I have only seen this data since May and I still have my learners permit.
Those best trades snapshots are not indicating what I am taking out of the market everyday, they are benchmarks of what I could have done. Trading is messy, but if you don’t have a benchmark to watch and trade against, how do you know how you are doing? I believe in going to the batting cages every day, our minds are much greater integrators of information than computers but you have to feed them good data.
Bring on August.
Comments about TLT (Twenty year Bond ETF):
Last week we sang “I see the bad TLT rising” and here it goes. It played with the 119.20 area for a while, we think it could be in trouble for a while here as far as upside, but would like to see the 120s soon in order to put on some downside pressure to aid the bears.
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Breadth Charts in Full :
Zweig Breadth Thrust:
Looking to go above 50 today.
Cumulative Volume Index:
Negative volume continues
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
New Highs / New Lows ratio chart :
Watching to see if we can get it higher
Short Term Trender – McClellan Summation Index:
We have the chart continuing bearish:
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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