Today’s Economic News:
Inflation numbers continue to come in on point. Today in the US we will watch the housing starts and permits and what Michigan has to say about inflation and consumer sentiment.
Quote of the Day:
Your heart often knows things before your mind does.
–Polly (Pearl) Adler
Featured Breadth Chart of the Day:
With the Zweig moving to below 40 (oversold), we are getting ready to watch for bounces and to see how far this downturn will go.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
We have 1648 as a possibility for our downside for the day. We would expect 1668 to hold as the upside of a bear flag. There should be more downside so the game now is timing the bounces in here.
Our expectation for today is a narrower ranged day and then we see more selling next week.
Despite the strong selling, we did not put in a 9:1 down/up volume day. These pullbacks are usually marked by two very close to each other. You can see that in the end of June bottom. That makes us think that there is more to come.
Message for today: price is picking up downside momentum now but volume has to come in and confirm.
On the MiM:
The MiM confirmed that selling was in vogue, but despite the size of the move of the day, it was surprisingly light. None of that 1BB type number. As we approached the close, that sell side bias was evaporating. To make the trade in the meter direction you had to be in early at that 3pm ET as we did get a counter move between 3:20 and 3:50. See how that ate up some of the imbalance as sellers closed into the rise.
If you want to join the meter readers you can go to: http://closingimbalance.com
Comments about TLT (Twenty year Bond ETF):
Lower we go on the TLT-A-Whirl, hitting our lower target of 103.75. We would expect to bear flag again in here before another move down and we would expect that to reach as high as 106.25 with 105.25 more likely.
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Breadth Charts in Full :
Zweig Breadth Thrust:
Cumulative Volume Index:
Starting to chase.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Breadth was part of the move.
New Highs / New Lows ratio chart :
This puts us into hold/bounce mode. We don’t expect to follow through to the downside today.
Short Term Trender – McClellan Summation Index:
Long Term Trender – Cumulative 4-week Highs – Lows (the fat lady):
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader
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