Around the Globe
Europe as of 7:12am EDT
Today’s Economic News:
News out of Europe was mostly positive and the markets find themselves with a little bounce pre-open USA.
Quote of the day:
‘Tis an ill wind that blows no minds. – Malaclypse the Younger
Current Breadth Readings: (click here to see all our breadth charts)
Our 2nd trender has succumbed to the selling, moving form bullish to neutral. Another down day and it should be a bearish indication. The most important sign of a top on this indicator will be the crossing of the 15 DMA. That is a ways off.
ES SP500 Futures Comments:
This is like watching a 500 lb man on a spring board. One bounce, two bounce, three – break or bounce – ? That 3% area we set as our outlier to maintaining our call on a small correction versus something more serious has held to the penny, at least for the first bounce. First bounces don’t usually count for much. If the bulls can capture and hold the 1435 area, then the last fall is done. There is a cup and handle forming on the 60 minute chart at that neckline and if the market can get a little sip of the coffee in the cup, we have an upside target around 1445 to watch.
We need to see today’s action in order to pull that short area into focus. Yesterday’s new lows pushed it all the way up to the 1465 area for a retest attempt. That would mean that the fat man bounces.
US Dollar DX Futures Comments:
That 80 area set up for a nice test yesterday, peeking above for a portion of the day and eventually closing lower . Our overnight low was around 79.75 and we are currently attempting to build up momentum for a retest with trading around 79.90 as I type. So if you haven’t read this column before… we watch the strategic levels on the dollar for hints on what the broader equity markets might do. We have a strategic reflection point at 80 that, if it breaks higher, would look to us like pressure for more stock downside. If we resume the downward trend, we would expect a recovery rally to continue.
TLT Twenty Year Bond ETF Comments:
As with the US Dollar, we watch the action in bonds very closely using the TLT 20-year ETF as our indicator. This indicator, too, is at a crucial turning point at the 125 area and flirted all day with that level. Again, if we go higher on the TLT, we should see stocks further decline and the opposite if the opposite.
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