The action remains unstable here until we can set a direction. I started trading futures about a month ago and for the last two nights have been trading through the night session learning how to read thinly traded markets so I missed yesterday's post which got 80% done. Let me tell you it was the best one ever and had you traded some of the recommendations you wouldn't need to be here reading this one today. Sorry about that. This one will be a little abbreviated too.
Just to show you what a crazy ride it was last night here are the ES futures from the close until 8 am this morning. Down almost 8 points back up 6 points and back down 6 points. A good trader could have made 10 points out of the possible 20. That is another whole day of trading.
The culprit was the DX.
Between the two charts you can easily see the reverse correlation between the two.
Overnight China was up over 1.5% on its majors while Hong Kong and Japan struggled and closed slightly in the red.
Europe opened strong this morning and slid into mid-morning selling and is currently at their lows of the day down close to .4% from yesterday's close.
Our futures look terrible coming into the opening.
Economic News today:
Claims should be interesting today after last weeks spike. Hopefully the post Christmas numbers will settled into the correct direction.
Breadth Charts
40 DMA % Index
Yesterday's market did a good job getting this chart pointing in the right direction.. Today's market will have to work hard to keep it there. The chart scores a +6.
10 Day High - Low
This chart also improved but not enough to change the momentum direction back up. It scores a neutral 0.
52 Week New Highs
The 52 week chart also improved but still not enough to push back up the 5DMA so this chart too scores a 0.
Conclusion
We now have to doubt this thrust. The buyers that came in off the February bottom here just are not strong enough to get up and through the current band of sellers that are finding a second opportunity to get out of the market. If that selling band gets exhausted we could go higher, or if the buyers can build some new momentum behind them (like some positive economic news) they could turn some of the sellers into holders and bring in some more buyers. That is not happening as the dollar is strengthening and the economic numbers printed are less than stellar.
| Chart | Score |
| 40 DMA % Index | +6 |
| 10 Day High - Low | 0 |
| 52 Week New Highs | 0 |
| Total | +6 |
The charts from yesterday are on the bullish side of neutral but the overnight action has wiped most of that out. See if buyers come back in to buy this market today.
$SPX
It is shaping up that we are going to be testing on the downside today so I will scroll my charts up. Most likely we will open below the 1100 mark this morning. If the bulls could hold 1094 area and mark that as a double bottom technically that would be good. A break of 1094 puts in a pattern of lower lows which would be good for the bears. After 1094 there is resistance at 1090 a break of that puts the 1076 number back into play. Watch those.
Bull Plan: Hold 1094 and close the gap. Close above 1100 and if you really want to impress make some higher prints above 1106 and close in that area.
Bear Plan: Take advantage of the head start and slice through 1093 like it means nothing. Fight the bulls at 1090 and make a new low in there. Close below 1093 would be a good bear day.
Hope to see you in the markets.
Marlin
