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Today’s Economic News:

Not the best economic news out of Europe, just one number out of the USA today.  Today’s trades will be follow-through to all the intervention talk from last week.

Quote of the day:
Programming today is a race between software engineers striving to build bigger and better idiot-proof programs, and the Universe trying to produce bigger and better idiots. So far, the Universe is winning. – Rick Cook

Current Breadth Readings: (click here to see all our breadth charts)

Today’s breadth indicator is the Cumulative 4 week NH/NL which has chopped back to full bullish after the last couple of days monster rallies.

ES SP500 Futures Comments:

Short: 1385
Long: 1351

When the market runs against you, it can really run.  For all those that say the markets fall faster then they climb, we have witnessed one of the best couple of thrust days to the upside that the market has ever produced.  Ever.  Almost 5% in 48 hours.   That move put in the higher high which we had targeted at 1384 on Friday.  We hadn’t predicted it but it was published as the upside price extension area.  We are there now and today will be an interesting day.  With an overbought market (interesting that our 60 min RSI it is not signaling overbought yet), the question today will be “is there more to squeeze out or have the bulls done the easy damage?”.

Our buy area to enter for another leg is in the 1351 area.  We don’t think we will move much below that in this current bullish intervention climate.  Our short area remains at 1385 as we think price hit its target.   Bond prices dumped on Monday and that helped fuel the run.  Some are calling it the end to the bond bubble.  We think there might still be some fight left in there.

US Dollar DX Futures Comments:

The US dollar has recovered some from Friday’s selling and is back to holding that 82.50 area.  The bulls will need further breakdown of the dollar to help fuel higher prices in equities.   We think there will be some upside testing yet.

TLT Twenty Year Bond ETF Comments:

The selling in bonds is fairly pronounced.  The move below the 130.50 line on TLT is an encouraging sign.  World wide government intervention has help spur the bulls and scared the dooms dayers who fear there might be another extension put in place to the ending of the world.  Talk is cheap, and thus far it has been all talk.   Implementation in Europe and the US for that matter is much nastier, so we think there is room for negative news over the next couple of weeks.

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