Today we have a slight gap up opening which will be a change and real test of the evaporating momentum. Each day we have reached the close with lower breadth and hence seeing price momentum slow. Today without a gap down and with the winds from the world wide markets performances at our backs, we will see if the market has enough oomph to rebuild price excitement and hit some of those juicy targets like DOW 11,000 and NDX 2000.
What the world did last night:
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Asia
Both the Hang Seng and Shanghai put in strong days with better than 1.5% for the Hang Sang and Chian up about .8%. Japan was a little more subdued but had their best day of the week.
Europe
A 1% day for Europe going on right now. The 7 am news from Great Britain threw a little water on the party. The producer price numbers were way out of line showing first real ugly head of inflation. Canada put up some disappointing employment change numbers this morning.
United States
The UK hot inflation number and the weaker Canada employment number should help strengthen the dollar today. That could put a damper on any party planned here.
Economic news
We are light in news here in the US with just the wholesale inventories at 10am.
Breadth Charts
40 DMA % Index
Our 40 DMA index remains in bear territory as yesterday we added more stocks to the category of trading below their 40 day moving average. The NYSE now sits at around 83% of stocks trading above their 40 DMA. That puts the NYSE below its 20 DMA for the index which has proven an excellent sell signal. We will correct from here the question is when? The Russell and NAZ (had it generated a chart) are in the same position. These charts all together score a bearish -6 today.
10 Day High - Low
Our ten day high low chart shows increased weakness in the NYSE. We will put that on the watchlist today looking for any renewed strength. It had been all the strength the last two week taking us to the new highs and now is rotating out.. the question being will the RUT rotate back in and lead the charge once again?
52 Week New Highs
The 52 week chart has now put in three days of lower bars on the NYSE and NAZ. Yesterday's price action was just enough to keep momentum alive here. Today on the NYSE we will need about 150 new high between 9:30 and 10:30 to stay bullish. Today's chart scores a neutral 0 on all three indexes.
Conclusion
| Chart | Score |
| 40 DMA % Index | -6 |
| 10 Day High - Low | 0 |
| 52 Week New Highs | 0 |
| Total | -6 |
We are still in -6 area waiting for the 10 day high low or the 52 week new high to signal a confirmation of a weaker days ahead. To front run the charts we will be watch the pace of new highs in the first hour of the markets live in the trading room: http://ttthedge.acrobat.com/traders.
$SPX
The SPX spent the entire day and energy yesterday trying get back to to surface after yesterday's dunking open. Today if the gap holds, and it should since there is no pre-market news scheduled, we will open above that 1188 area and most likely make an early test of 1191. I doubt we have enough sustaining momentum to get us up and over 1192 and break into new highs.. that might have to wait until Monday. The SPX did make its 1.25% correction knocking that 40+ day stat (that was seen published everywhere) off the blogs.
New highs need to return back with a vengeance so any rally for me will be measured against the new highs number for validation. Today the NYSE new highs need around 150 in the first 30 minutes.
Bulls Plan: take the gap up and run right up to the highs trying to self-generate some momentum. Set new highs and closes above 1190 for the week.
Bear Plan: Fail a run to the top and sell back down to the 1175.50 area. Put in a close below 1180. Baby steps.
I am going to short any new market tops. I am expecting a red close today.
Careful.. Always use stops and practice safe trading.. Hope to see you in the room.. if not have a great weekend. http://ttthedge.acrobat.com/traders.
Marlin aka: RedlionTrader
