Featured Breadth Chart of the Day:
We will bring out the Zweig today and show that weakening formation. The more time marches on, though, the more “virtual” selling and correcting the market is doing. It is like a marathon runner, pacing and waiting for the side money to accumulate and then for it to impatiently enter the market in another squeeze higher. Think of it as sentiment correcting without price.
Today’s Economic News:
Not much news in Euro land. Watch those PPI numbers and see if the ECB is making headway on deflation.
Plenty of USA numbers to follow.
Quote of the Day:
The two foes of human happiness are pain and boredom.
–Arthur Schopenhauer
Comments and Levels for the Front ES (S&P500 – Emini futures) contract:
Short: 1814
Long: 1794
I usually write this piece early in the AM as I have a better chance of being right and looking more clever. My schedule for today doesn’t permit that so I have to take a stab at guessing the market 16 hours out, so here goes…
I wrote yesterday that I need a couple of days of post-holiday markets to determine where the participants are driving this market to. We have one day under our belts and they showed that they were not over-exuberant at taking this market higher. On the bulls’ side, there is fear of tapering and those good PMI numbers, like yesterday, help bolster the fear. Our local market drug dealer, Quick Fix Ben, is leaving and it is not clear that Yellen is going to weigh the bags as liberally.
To that end, bonds are falling and the market is stalling. It isn’t falling as much as stalling. Call me when we hit 1% back at 1794. Speaking of 1794, we are going to make that our low target area on the day with an understanding that if we are below that at the open we are looking toward 1790.
If 1794 proves a hold, or if we rally from 1798, then we continue to look toward new highs at 1814. That might not be much help tomorrow, but look that those extremes for trades.
On the MiM:
Back-to-backs on the MiM. Another great day of selling and an easy 5 points on the trade for those going short. So far MiM riders are really liking December!
These are the days that the MiM is clear and we want to watch for continued liquidation into the end of the year.
Every day from here til January we will take a special look at the MiM and trading follow-through
If you want to join the meter readers you can go to: Join the MiM
Comments about TLT (Twenty year Bond ETF):
101 on the TLT a Whirl … if this keeps going the way we think, we could see a sub 100 before the end of the year! Today’s price action put 101 in the crosshairs.
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Breadth Charts in Full:
Zweig Breadth Thrust:
Sneaky feeling that there is going to be another attempt to summit to new highs.
Cumulative Volume Index:
Stalling.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Broader market weakening …
New Highs / New Lows ratio chart:
No hold yesterday.
Trenders:
Short Term Trender - McClellan Summation Index:
Neutral.
Long Term Trender - Cumulative 4-week Highs – Lows (the fat lady):
Neutral.
Thank you for Reading –
Marlin aka RedlionTrader @redliontrader