Around the Globe
Today’s Economic News:
Not a ton of economic news this AM from around the world, just more evidence that we are fighting hard against deflation. In the USA, the news will all be over by 9:55am ET. Eyes on the prize today for the 8:30am news. Not sure if the GDP will top the expected 1.5% or not, and really not sure what the price action will be either way.
Quote of the day:
A sense of humor is part of the art of leadership, of getting along with people, of getting things done. – Dwight D. Eisenhower
Current Breadth Readings: (click here to see all our breadth charts)
Since we are, and continue to be, bearish and looking for more downside here, we need to present a new chart that is running counter to our call and that is the Cumulative NH/NL. We have been concerned about the lack of new lows during this time-frame and the number of stocks making new highs. That shows up both in the daily HH/NL chart and our Cumulative chart that we use for trend calling. A one day green score puts this chart officially in neutral. That has our trend charts in a split mode.
ES SP500 Futures Comments:
We thought we would fail in that 1355 area, that has not happened and we continue to push higher, now just 1% away from the highs. (Our total trip down was about 4%). Looking over the breadth charts, we still think the tide has changed to the downside. We did expect this bounce off that bottom that would not be able to establish a higher high. That is the action we are working on now. If we’re wrong, we are looking for a higher high price extension to 1384, so if you are bullish here, that is the current price objective. For those of us bearish and looking for a fall from here, our downside price objective is pushing down as we speak and now sits around 1310.
GDP will come out today and expectations are very low. I am not sure beating expectations is a good thing for the markets. That might mean that QE is not going to happen and it certainly means that the better GDP was achieved on high unemployment and not fantastic earnings. That message does not foster hope. It’s a tricky call, we could fall apart on a beat or even rally on a miss.
We are in the T+3 period now where equity purchases and sales are part of the August record. It is the first month of the quarter so window dressing should be minimal.
Enjoy the weekend, and watch the news at 8:30am.. that is when the show begins today.
US Dollar DX Futures Comments:
I am too lazy to type in the decimal numbers so we call it the 83 area for a hold and 84 for a breakout. There will be movement on this today going into the weekend. If GDP is bad today, expect the Fed’s to do a rain dance to wash out any bears’ parade.
TLT Twenty Year Bond ETF Comments:
TLT is falling short of the 135/36 target so far, still holding the 130 area. We should get some good movement today on the GDP news. The bears are against the wall and need to push the markets down and squeeze what is left of risk money into bonds to complete our price objectives. If only we were in charge.
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