We are caught in that sideways chop area that was defined for us in November and December. We could be in for a bumpy ride until we can get to cleaner air both above or below this chop zone.
Asia
China's Shanghai was slighty red while Hong Kong and Japan put in good green days this morning.
Europe
Europe opened strong and put in some good economic numbers this morning. The inflation numbers in Europe came in good and the UK GDP numbers came in stronger than expected.
United States
Economic news
We have our own GDP number revision this morning as we get a second look at the revised GDP.
We will also find out if the Michigan consumers are as gloomy as the rest of us here. These sentiment numbers have been disappointing so we might be setup for an upside surprise here.
Earnings
Breadth Charts
40 DMA % Index
The 40 DMA is again pointing in the wrong direction but it remains in neutral territory as long as the index stays above the 20 DMA. This is the most bullish chart we have which scores a 0 today.
10 Day High - Low
The 10 day high low chart has been shredded with this gappy behavior at the opens. The chart scores a bearish -6 with both lower new day bars and lower momentum indicators.
52 Week New Highs
This chart also scores a -6 today with a lower new day bar and lower momentum indicator. Today we would need a 115 number (60 new highs at the 30 minute mark) to begin to turn things around. Breaking 200 today or about 100 at the open would re-instill some faith that the bulls were back in control.
Conclusion
| Chart | Score |
| 40 DMA % Index | 0 |
| 10 Day High - Low | -6 |
| 52 Week New Highs | -6 |
| Total | -12 |
The charts have returned to their bearish ways with yesterday's large gap down. The strong rally into the close which never allowed the charts to catch up so the selling could be over and the market might climb higher. I would approach the day with skepticism from both sides here. Technically I see weakness except with that intraday pricing action yesterday which seemed to coincide with the end of the bond auctions. I am going to approach the markets neutrally today despite the strong bear score.
$SPX
Looking back through November and December you can see that the area we are currently in is a turbulent chop zone. This is a difficult area to trade when we are accustomed to be looking for trends and we have a major sideways move. Until we break out of here we should assume we are going to get the same type of sideways behavior with 1085 being rejected and unable to break above 1115. Once we get into clearer air then ride the trend in the mean time play the chop.
That being said short 1110 and buy 1086.
Bulls Plan: The bulls rejected the bottom yesterday and closed slightly green. Today they need to keep that momentum going with a strong start and rally above 1110. Some higher prints above the 1110 area would be great as would a breakout of 1116. Until we break above 1116 we should consider ourselves in no man's land.
Bears Plan: The bears have their goal line down at that 1085 area. First a break of 1100 than 1000 and then down and through the area that yesterday was a trampoline (1086). Any close below 1100 would be bearish.
Beehive
The BTS trade is still in effect from 2/23.
It was green yesterday for the first time since executing but closed back into the red with yesterday's strong afternoon rally. There is no way to generate a close signal today so Beehive will be holding through the weekend.
