Around the Globe

Asia – CLOSED
• Shanghai (China) +0.46%
• Hang Seng (Hong Kong) -2.03%
• Nikkei (Japan)-1.48%

Europe as of 6:55am EDT

• DAX (Germany) -1.15%
• FTSE (UK) -1.29%

Today’s Economic News:

Quote of the day:
Doing nothing is very hard to do … you never know when you’re finished. – Leslie Nielsen

Current Allocations from our room:

Performance Month to Date from our room:

Current Breadth Readings:

We haven’t looked at the McCSi index lately as it is a trender that we use to gauge longer holds.  It currently holds bullish, but that flattening yesterday may not be able to hold today.  Should we fall apart here, we would expect to see a neutral on the McCSI after over a month of bullish readings.

ES SP500 Futures Comments:

Buy Area: 1325
Short Area: 1390

We are going to need to find a lower short area orphaned way up there at 1390.   We have now had 5 days of selling since the 7/5 top exhausted at 1375.   Today we are looking for a hold around 1325 and here we are at premarket already trading 1324.50, so this is the buy area.   Earnings are coming in short and high dollar valuation during Q2 is a common theme of blame.  Watch that dollar as it is in a complicated place now, a fall from here will certainly excite the markets long, especially now that lots of CFO fingers are pointing that way.

Bonds too are at exhausting, unsustainable levels, a bond bubble, and when it bursts it will force a reallocation of funds, so the market is ready, but when?

Here in Maine, our tides are about 10 feet in height.  Everyday, twice a day, the ocean moves up and down ten feet.  That is a lot of moving water and it creates currents that are noticeable.  For example, lobster boats in a harbor will suddenly all turn at once as the tide turns direction from ebb to flood and the bows all point like tide compasses into the tidal current.  Some of these afternoon rips have felt like tidal changes over the last five days, but so far that hasn’t happened.  Unlike the temoral predictability of the ocean tides, the markets move to their own rhythm.  It is not a matter of if, just when and from where.  We will continue to use our breadth charts like the fleet of fishing boats in harbor to point out any sea change.

US Dollar DX Futures Comments:

The dollar has setup this strange bull flaggish pattern again.  If any reader knows what this is or has a study, I would love to hear from you.  The last time we setup 5 days and fell.  Today is day four of the current consolidating pattern.  We are watching price slowly sneak up to 84, which we last hit on June 1st.  Our $SPX bottomed out there at around 1280.  We are sitting now at 1341.

TLT Twenty Year Bond EFT Comments:

TLT, our upside target, is recalculated at 130 to 130.50.  Bonds are acting bubblicious and will have to relax at some point. 

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