Today’s Economic News:
Not much out today. In the USA, the government and some services are closed for Veterans Day.
Quote of the Day:
When it is a question of money, everyone is of the same religion.
–Francois Marie Arouet de Voltaire, 18th-century French author, wit and philosopher
Featured Breadth Chart of the Day:
Our long-term trender has us looking for the market to get more bearish. This is the slowest-turning trend indicator and last week took it bearish.
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
Short: 1770
Long: 1760
We see weakness on the horizon but the market still has some momo to the upside that needs to get satisfied. For today we will watch the 1770 area for a possible top and reversal for the day.
On the downside at 1760 if this market is truly bullish, we would expect to find some buyers and to see breadth move back in.
On the MiM:
We had a late arrival on the MiM on Friday, a MiM that did not show strength until really late in the window.
That prevented me from making a MiM trade. I saw several emails and posts from traders that did and they were happily rewarded with that 3:20pm timeframe which, yet again, shows up as the best entry window for the trade.
The late arrival did make me curious and as I expand some of my studies that I am doing on the MiM, I am looking to see if the MiM is useful at signaling sentiment that might have a multi-day influence. So off to the snapshots I went and found the following similar-looking MiMs:
That twin set from the beginning of August looks a lot like what we saw on this Friday and Aug. 2 was also a Friday. What did the market do after these?
Those 2 magenta lines show the top signaled on 8/1 and 8/2 and the Sept. 17 MiM was just one day away from an exhausted top with a sustained pullback. Are we close to a top again this time? Mark it down and note it in your trading diary.
That topping view lines up with my breadth work that shows a divergent top being put in and an expectation of downside travel starting sometime this week. That is a complex way of saying I am biased toward shorting rallies. That does not mean I don’t think we will get higher, but I do think there is more down than up from even here.
If you want to join the meter readers you can go to: Join the MiM
Comments about TLT (Twenty year Bond ETF):
We are taking some time out of the TLT to watch and let it settle.
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Breadth Charts in Full:
Zweig Breadth Thrust:
There is that Zweig bounce we were looking for. It is about higher highs and lows for the bulls. For the bears it is about breaking down below 46 and hitting the 40 now.
Cumulative Volume Index:
Near the highs, but where is the upside volume? Missing. That missing $ volume scares us.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Too much air in the piston that took us up. Look how the breadth is not confirming the move here either.
New Highs / New Lows ratio chart:
There is going to be a battle this week.
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