Around the Globe

Asia – CLOSED
• Shanghai (China) +1.00%
• Hang Seng (Hong Kong) +0.84%
• Nikkei (Japan)-0.01%

Europe as of 7:14am EDT

• DAX (Germany) +0.42%
• FTSE (UK) +0.67%

Today’s Economic News:

Not much on the docket for news today.  We will watch the 10am Euro consumer confidence numbers for an indirect effect from Europe.

Quote of the day:
All the President is, is a glorified public relations man who spends his time flattering, kissing and kicking people to get them to do what they are supposed to do anyway. – Harry S Truman

Current Allocations from our room:

Performance Month to Date from our room:

Market Sectors to Year to Date:

Current Breadth Readings:

Breadth continues for the bulls in a nice upside grind.

ES SP500 Futures Comments:

We like it short right on the open today in this 1314/1318 area.  We think a sideways consolidation pattern is setting up and the bottom of that range needs to be put in, which may be no lower than 1300.  We like it short better than long.

Our target for a correction is 1288 area with a serious looks at 1300 and 1295 for the long side.

Our intermediate look 3 to 6 months out remains bullish based on the broad strength and duration of the rally.  We will accumulate longs whenever the markets give us a chance.  There is a tier of second chance buyers lining up and any pullback will reveal their conviction.

US Dollar DX Futures Comments:

The US Dollar will not rally with the markets and remains blocked from upside movement.  A rally from this 79.77 area up to the 81.50 area with a failure will put in a head and shoulders pattern.  A break of 79.75 will have us looking in the 78.63 area for strength. As yield and interest rates rise the dollar should become more attractive, especially if it is the result of a stronger US economy and Euro weakness. We are looking for another good entry long.

TLT Twenty Year Bond EFT Comments:

We have put in three decent downside days on TLT now, testing the 116.80 50% fib level.  A break here will give us more confidence of the call down to 111.

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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. TTTHedge.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. TTTHedge.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.

Not Sure what a Ned Davis 4% system is?  Read more about it here and get access to our indicators and strategy files for backtesting on TradeStation and NinjaTrader.

Twofer for the bulls.  Monday will begin a new cycle in the new highs, and Tuesday if all goes well should produce our first full bull score again.

52 Week new highs are starting to build again.  They need next Monday or Tuesday to be setting anything but neutral scores.

The 10 day cycles are coming back strong.

The 50 DPI remains in bull territory.

Follow me on twitter: @redliontrader

We are in cruise mode now as the markets continue to want to climb ever higher.  Breadth still looks good.

Nice recovery on the 52 week new highs.

The 10 DHL stalled a little.  Looking for two in a row to set a pattern.

The 50 DPI still looking good but getting into correction area yet again here.

Video: How to interpret 10 Day Highs minus Lows

Download: StockFinder  5.0 10 DHL code

Follow me on twitter: @redliontrader

A run to new highs on Friday with afternoon selling kept the breadth positive, I would expect at most a slow grind this week upward.

All three hit their mark on Friday.  The NYSE and RUT put in more new highs than the recent February highs.  That shows some good breadth behind the market.

Our ten day chart is topped out, expect to see this go into a correction mode with price action still advancing in the morning and going soft in the afternoon.

50 DIP needs a little bit of correction.  Very powerful.  Buy the dips.

Video: How to interpret 10 Day Highs minus Lows

Download: StockFinder  5.0 10 DHL code

Follow me on twitter: @redliontrader

Breadth took a little healthy break on Monday to close down at –4.  Although the ending was a little bit frightening, the overnight session have held up well, so I would expect breadth to open the day just fine and let us put in at lease a more favorable neutral score of Tuesday.

52 week New Highs came off a little too much.  Today will be a good tell as we begin day 2 of a 5 day cycle and all we have to do is put in a higher daily for a bullish score.

The 10 Day chart just missed, a good solid neutral score.

The 50 DPI remains above the bull/bear line in bull territory despite the one day weakness.

Video: How to interpret 10 Day Highs minus Lows

Download: StockFinder  5.0 10 DHL code

Follow me on twitter: @redliontrader

A “V” shaped day put the bulls back in play shaking up the bears and adding some short fuel to the fire.  Follow through is needed, especially in the Nasdaq.

The NYSE 52 Week new highs now have a downward trend working, so we need some perk here for the bulls.  There are two more days of the “easy” cycle left before these type of days turn to bearish signs.

Ten day cycles are looking great.

The 50 DPI still has to get that NYSE and Nasdaq to confirm.

Video: How to interpret 10 Day Highs minus Lows

Download: StockFinder  5.0 10 DHL code

Follow me on twitter: @redliontrader

Just wanted to drop a note to remind you of the ten day trades and how they are working out.  This is our current portfolio..

Note that we have three shorts that are to exit in the morning and one long to add at the open.

WTW (Weight Watchers) is a weird add as it gapped up on earnings and has trailed down into the trade so it will be interesting to watch.  Notice also that the entry price is lower than today’s close.  I have had a couple of questions how to handle that, the answer is I enter at the open if the price has not gapped above the entry price for a long or below for a short.

Here are the most recent results..

In general I am liking how the mechanical system is trading, we are around the 70% win/loss ratio which is ok and if you dig through some of the losses there are a lot of break-evens or near break-evens like the DDR which I mechanically took at the open but could have easily closed for a slight gain.  As you know win/loss is not the only measurement.  Our average gain per trade is 4.27% and average loss 4.43%. They are very close and as long as our win/loss ratio remains above 50% we should be making money on this long/short system.

Thought you might like the update.  Hope all your trading is going well.

If you are not gold and want to gain access to the trades, or any of the premium indicators now is the time to step up to gold level for just $75 for 12 months of trade and unlimited access to my indicators.

See you in the markets..

Marlin aka RedlionTrader

@RedlionTrader

We are very excited to be hosting FuturesTrader71 as a guest speaker in our live on-line trading room on Wednesday, February 16th.

FT71 is a traders’ trader and has been actively giving back to the trading community to help traders navigate through the dangerous carnival midway that leads too many astray.  He is a full-time trader running a proprietary trading firm in Chicago where he derives all his living and runs a popular website www.futurestrader71.com and is active in social media circles on StockTwits.com and twitter as @FT71.  Through those two primary outlets he has generated a passionate fan base and at the request of our membership an invitation was sent and FT71 gladly accepted and we are honored.

We will open our doors to anybody who would like attend to hear FT71 talk about the skills of trading and how to treat trading like a job.  Space is limited as we can only get 100 in our room so we need to get RSVPs if you would like to attend.

The seminar/webinar will be on Wednesday February 16th @ 12pm EST, if you reply back we will send you a link to attend.

Looking forward to seeing you and hearing from FT71!

Team TTT

The score so far for Friday

Asia:

• Shanghai – closed
• Hang Send – closed
• Nikkei +1.08%
• No Economic news.  China remains closed until Monday for Chinese New Years

Europe: as of 6:43 am

• DAX +0.28%
• FTSE +0.32%
• Moderate gains in Europe today
• No economic news

USA:

• 8:30am NonFarm Payrolls exp 150K last time 103K
• 8:30am Unemployment rate exp 9.6% last time 9.4%
• 8:30am Average Weekly Hours exp 34.30 last time 34.30
• 8:30am Average Hourly Earnings (MoM) exp 0.2% last time 0.1%
• 1pm FOMC member Fisher speaks

Quote of the day:
In the land of the blind, the one-eyed man is stoned to death. – Joan D. Vinge

Current Allocations:

 
Breadth:

The markets continue to chop around as breath put in a –8 score and brought us back to the bear side.  Today will be all about trading around the jobs number.

$SPX chart:

The markets on Thursday came down and tested the top of Tuesday’s gap at the 1295.12 area before the dip buyers came in an grabbed up all the bargain stocks to push them back up to near the market highs.

The Bull line today remains the same at 1309 and the bear line at 1282 as we build this wide consolidation area.

Obvious areas today to watch are 1309 for a breakout, which should run another 5 points to 1314.  That 1301 area did not offer much resistance yesterday on the initial fall through, but on the rally back gave footing to the bulls for the next leg up.  So watch 1301 for a hold and 1295 again for a test.

All eyes today are on the jobs data which will set the starting line.  If we are to breakout from here and breadth agrees, I could, by the end of the day be in a buy the dip mode again.

Merger – mutual fund Monday is just two days away and there is a history of front running to catch a Monday gap up opening.  There is a moat of Saturday and Sunday  before Monday’s open with little chance that world peace will breakout in between so it will make for an interesting close today.

I remain in a sell the rips mood until the 50 DPI tells me otherwise.

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