You gotta like those who stick by their calls. The Cramer vs. Kass standoff is very interesting to watch.  I am very nervous being in the Cramer camp and I could switch sides on any 15 minute bar from now.  At 4:30 am this morning I became very bullish for today’s open at 4:30am this morning, not so bullish last Friday, then I thought we were going to get a gap down in the am.  I was only off in the direction by a little. It was a long weekend. 

In the TTTHedge.com trading room Tom called an all in after the open and I more than covered my shorts so all is good.

The NYSE 52 week highs continue to pile on like waves in a rising tide as does the Nasdaq highs, but.. the Russell what is going on here?

The NYSE new highs are reaching to the same heights as the last index highs, the NQs are weaker and the Russell is a little runt.  We need to see some strength in the RUT if we are going to carry ahead here.

So tomorrow we will watch and see if the Russell can gain any ground here.  Three trading days in a row it has been the laggard on the A/D line.

You can get my live new high data feed with new improved scoring.  You can read how to interpret the data from this posting: How to Interpret the New High Data.

If you want the live data-feed on twitter than follow http://twitter.com/redsdata

Good morning,

The Bulls are waking up to Christmas and the Bears just want to find their dens and hibernate.  It is like those World’s Gone Wild videos.  Currently the Futures are 11 points above their Friday close and it is beginning to look like a large gap open here as our holiday markets get a fresh open on a new fall season.

Trading rooms will be full and those High Frequency systems will be kicked in.  Expect a large volume day today.

Gap Research

I did some research last night looking at gap opens since March 9th to see how they performed.  I set as my threshold 2 point gaps of which there have been 15.  I was hoping to wake up this morning and throw out my research and return to my original plan for the day which was to sell the gap down.  My 4am check-in got me out of bed to revise my research, but in the other direction, a larger gap.  What was our largest gap open of the run? On July 15th we gapped up 4.3 points.  So an 11 point gap is off the charts during this bull run, but we did miss a day of trading.  I looked at our other post-holiday opens like Memorial day and 4th of July holiday where we also missed a day of trading, and the markets simply took off where we left them the day before.

At some point today the markets and the futures have to realign and I would expect that the alignment will start pre-market with the futures pulling back in fear of the uncertainty of the open.  There is no econ news this am and any market news will likely be bullish M&A type activity that will add even more octane to the bulls fuel.

The lower that opening gap becomes the more favorable for a gap closing, the larger the gap the more likely a rocket launch day where prices never look back.

We should know after the first 15 minutes how the market is running.  Gap failures have been failing quickly where successful gaps have just climbed from the open.

What we are watching:

• We will watch the strength of the open, particularly in the RUT which has performed relatively weakly over the last week. So traders in the room, follow AJAY’s posting on the A/D and see how the advance/decline values are trending relative to each other.
  
  • Our 52 Week New Highs should just jump off the charts.  I would expect to get over 50 new highs in the first 15 minutes, that compares to just 27 on Friday.  I will post a special 15 minute update at the opening, see if we break that 50 number.
    
    My 30 minute updates are now being automatically posted on our new twitter datalink: http://twitter.com/redsdata.  I will try an post in the room, but if you want the fastest most reliable data feed of new high data follow the twitter link.  (I added a new scale to make it easier to understand.. each report has a score ranging from 4+ to 4-, 4+ being very bullish, 4- very bearish).  Watch for changes post to post.
    
  • Watch for oil to rally to confirm the world wide bull expansion’s thirst for the black gold and as always use Goldman Sachs or the bank index to monitor the strength of the financials
    
  • Some SPX cash values to watch today.. 1018.50 is 2% support line, 1028 is 1% and  1039.28 is our all time high.

 

The rocket is on the pad, it is fueled with unbelievable and unsustainable fuel and it will most likely launch today on another run to new highs, we will monitor the trajectory today looking for weakness but we also don’t want to miss the ride.

Premarket, Tom will be giving us some plays to get aligned with the market so make sure you read his postings and morning wrap at 9:15.

See you in the markets!

Marlin (RedlionTrader)

 

 

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