Finally the healthcare bill is behind us. The rhetoric will drop a little now and the falling skies promised will not happen and we can go on our merry way working harder to earn more money to help support our healthcare system. I spent a little time reading through the bill and in fact it is front loaded a money raising deficit reducing bill with back end promises that we most likely will not be able to keep. So short term it could be good for the U.S. dollar as far a strength.
The reaction around the world in Asia was a combination of U.S. news and the India interest rate height.
Asia
Europe
Europe is in the midst of a strong selling day. The FTSE, CAC and DAX are all trading down about 1% here.
United States
Economic news
No news today.
Breadth Charts
40 DMA % Index
The curl is in place on our 40 DMA % Index. The 20 DMA is catching up. A crossing is a sell signal for a correction and we are not there yet. This chart scores a 0 today as the Indices are pointing down but are still above their 20 DMA.
10 Day High - Low
A perfect bearish -6 score for our 10 day high-low chart today. We have lower bars and lower 5 day moving averages. We do need to be careful about a bounce today as those zero crossings are turbulent.
52 Week New Highs
Another chart putting in a perfect bear score of -6 today. The daily bars just did not hit the numbers and the 5 dma is also on the down side
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Conclusion
The market has hit a resting zone in here and taken a step back. Caution for the shorts is advised as the market is still loaded for bear and could spring back up to the recent highs in a moments notice. If this short term top forms like the others in this bull run we should be in for 3 or 4 days of turbulent markets as the bears and bulls wrestle for control. A pull back from here of greater that 3% is not likely as bull markets just don't top like that. It is a gradual weakening process where we make new highs on weaker breadth. That has not been the case as we just made new highs with stronger breadth.
I will be scalping up and down in our likely trading range here for the next couple of days picking up weakness and sell into weakening strength.
$SPX
Our chop should stay contained within the 1140 to 1170 area. That is a 30 point range so a lot of room to play in here. Breaking much below 1141 will cause me to re-evaluate and breaking out above 1170 with renewed breadth will put doubt on a pullback and make me think the correction is over and up we go.
Long term I remain an un-repentant bull as the breadth has just been fantastic. Enough breadth to fuel us at least for another month.
Let the games begin. I am long TF from 665.30.
Happy Trading - See you in the markets.
