Featured Breadth Chart of the Day:
The Zweig has broken out to the downside, now it is the bears’ turn to convince the markets and that means follow-through.
Just when I was feeling better about Europe, out comes the Month over Month numbers showing contraction. That will help with deflation.
In the USA the continuing jobs claims and retail sales will steal the show.
Quote of the Day:
When you get to the end of your rope, tie a knot and hang on.
–Franklin D. Roosevelt
Comments and Levels for the Front(S&P500 – Emini futures) contract:
Selling, selling over the ocean blue. We took a dive yesterday and headed down and followed through a bit overnight in the rest of the world, ending up exactly on the 2% mark around 1776. This area is critical as it forms a neckline to a long top that started mid-November.
We would like to see a pullback to that 1740 area, even 1737 . That would be just 4% back and, while scary, a pretty small correction.
For today we want the bears to show some follow-through. We want 1794 to hold if tested, but better yet 1775 to go. If we do see more downside we will be looking at 1768 for a possible upside move.
On the MiM:
On the fast track for the MiM yesterday as it produced a nice selling imbalance with market follow-thorough. A 3pmET entry could have given you five or more points trading the S&P500 futures. Many traders in the IM Pro room took the trade and left the day with a smile.
There was nothing shy about these numbers as they remained strong during the entire last hour across the board and the actual NYSE MOCs came in at over a billion to sell. We like those odds.
For the multiday market, we continue to see closing liquidations. It has been a while since we have seen a buyer’s MiM. December has been all about taking so far, taking those year-end profits.
We will be trading the MiM live every day as part of the MrTopStep boot camp. If you want to be a part of that starting on Friday, there is still room and time to sign up and you can do that here.
|Date Of Signal||Direction||x:00 Entry/Close||x:20 Entry/Close||x:30 Entry/Close|
* – NFP Day before and day of.
If you want to join the meter readers you can go to: Join the MiM
Comments about TLT (Twenty year Bond ETF):
We are looking for 101 by the end of the year and maybe sub 100. We think 104.25 caps the top side for this year.
>>> You can follow me on Twitter @redliontrader <<<<<
Breadth Charts in Full:
Zweig Breadth Thrust
The Zweig is looking for a reset to the 40 level.
Cumulative Volume Index:
Selling is picking up now.
Number of NYSE issues trading ABOVE their 40 day moving average (40DPI):
Down to just 33% of stocks now above their 40 day moving average.
New Highs / New Lows ratio chart :
One more negative day and we will be in bounce zone.
Short Term Trender - McClellan Summation Index:
Long Term Trender - Cumulative 4-week Highs – Lows (the fat lady):
Yesterday we featured world leaders behaving badly, today I want to take a shot at traders behaving badly. I talked to a trader the other day who said that he found a someone to trade with and was all excited. I asked him what the strategy was and the reply was, “Whatever he calls I do the opposite!”
Really? Now that makes no sense to me. He assured me he was making money, but the longer-term outlook seems to me to be a problem. If a trader is always wrong they will run out of money and then what will your strategy be?
There are two types of contrarian trading. One is math and statistical based, the other emotional as it comes from the need to be right, the need to stand apart from the crowd. One is good, the other is not healthy.
If you are going to find a trading partner, and you should, find someone who shares your style, size and frequency of trading and work together. Synergy is a much better trading energy than competitive trading.
MrTopStep has assembled a team of world-class traders ready for you to trade with. Unlike monolithic rooms, the collective trading power and styles of MrTopStep’s IM Pro room creates a sort of collective intelligence that helps to digest and trade the market.
If you would like to explore the MrTopStep IM Pro room, there is a boot camp with in-room training starting this Friday and extending through next Thursday. All the traders will be available to you and you can ask and learn and see if you can find a trading buddy to trade with, not against.
>> Click here to attend the MrTopStep Boot Camp – Dec 13-19 <<
Thank you for Reading -
Marlin aka RedlionTrader @redliontrader
DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. RedlionTrader.com, its officers, directors and its contributors may in the normal course of business, have position(s), which may or may not agree with the opinions expressed in this report. RedlionTrader.com, its officers, and directors are not agents, representatives, or affiliates of the CME Group or any trading entity. Trading Futures, Options, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.