Morning Wrap – What to watch today.

Good morning – August 28th.

This morning’s price action review:

The TF futures (Russell 2000) emins is the chart I am showing here.   I have switched to the futures for tracking indicies because so much of the technical work now is down after hours.  Our highs and lows and corrections now occur in the middle of the night sometimes.  A recent high on the TF was set at 10pm.  For review the red,white and blue lines are 1%, 2% and 3% pullback areas from a recent high.  You can see that after last Friday’s thrust and Monday and Tuesday’s follow through which set the most recent high, we pullbacked Tuesday and just hung around the 1% line.  Thursday opening we had an “amateur” sell off and classic bear trap only to close on the highs of the day.  Currently (around 7:30am EST) the TF futures are pointing higher with a good chance of pushing through to new highs.

News:

This morning at 8:30am Core PCE Price Index, personal spending and income, at 9:55 Michigan will let us know the sentiment of the consumer.  This past week has been all about finding the consumer with serious talk about how this economy continues its recovery with a much damaged consumer and missing consumer. This morning numbers should feed directly into the weeks spin and hence have a potential effect on this mornings price action.

 

Our Sentiment Charts:

Our Zweig for this market is in neutral territory, pointing south so really not telling us much.  The Zweig likes to chop so an up day into overbought is certainly not out of the question.

The NYSE new highs does give us something to watch today.

With yesterday’s close of 70 new highs, the secondary peak of new highs has officially lost momentum pushing our 5 day momentum indicator down from 97 to 96.  Just slightly down.  Today’s day-5 or bar-5 number is 95 so we would like to see 100 new highs in order to regain positive momentum or under 90 to continue that downward line. Notice during the last peak we also had one of these “kinks” only to be followed by a strong day and then resumption of weakness.  Will this repeat?  I will attempt to tweet during the day NYSE updates and let you now what the final prediction will be.  At 30 minutes we have a pretty good range and at 60 minutes our strike zone is even narrower..  So again we are looking for  less then 90 showing continued market weakness here at the top and greater than 100 to show bulls regaining their footing for a possible run up.

10 Day Hi-Lo (Russell 3000):

The 10 day High-Low continues to weaken.  For the first time since we have created this indicator we had intraday values that were negative.  Our price action continues to be sideways with underneath weakening that could simply be marking consolidation after last weeks thrust.

 

Percentage of NYSE stocks above their 40 day moving average:

Yesterday I sent out an intraday version of this chart.  The orange line represents the number of NYSE stocks above their 40 day moving average.  We are currently at 86.77% which is historically high.  A drop below the 20 day moving average.. I have 19 days here.. has historically been a good short entry in to the market.  Intraday yesterday we crossed below but the late morning save and rally forced the symbols back above their 40 day average.  We will add this to our watch list of potential weakness.

 

Happy Trading:

Marlin aka: Redliontrader

 

About Me:

I have been trading for a living for over 7 years now, learning through doing and listening and researching.  Like most traders I have developed my own personal style and favorite indicators.  If you want to trade with me and my partner Tom come visit us at http://ttthedge.com.

If you have a pal-talk account come by for a visit.  It is a premium room but we leave it open for visitors and friends.  We are there everyday trading the markets, sharing data and calling trades.  It is a room full of active professional and full-time traders.  Using paltalk express you can get to the room using this URL:

http://express.paltalk.com/index.html?gid=1088749347

You can follow me on twitter as Redliontrader where I will update charts and data throughout the trading day.