March is almost behind us and at TTTHedge.com I will be working late tonight crunching not only our monthly trading return numbers but the end of the first quarter numbers too. First we must get through today which is make or break time for this supposed mini correction. Yesterday we saw an unchanged day but there was some disturbing increase in breadth strength which should scare those that are oriented toward short. We will look into that but first lets see what happened in the world while we slept.
Asia
The Nikkei was trading around .4% in the green most of the day and then selling hit in the last hour causing the Nikkei to loose its gains and close basically unchanged from 2 days ago. The Hang Sang and Shanghai both had slow trend down days opening on the highs and closing down both around .6% for the day.
Europe
The DAX and FTSE had strong openings and rallied up but have since pulled backed to about unchanged.
United States
Economic news
The big number today is the ADP report as many use it as a talisman for predicting Friday’s number. Watch the 9:45am news just as the market opens where we get the Chicago PMI and then 15 minutes later factory orders. You would think they could co-ordinate their releases?
Breadth Charts
40 DMA % Index
We have mixed charts today.. the NYSE scores a -2 as the Index has moved below the 20DMA and is more negative then the day before. The Nasdaq’s index gained strength but remains under the 20DMA hence a neutral score and the RUT is a -2 with weaker and weaker days. So in total the chart scores a -4.
10 Day High – Low
A neutral 0 for all three indexes which although the triad put stronger performances than the day before, they were not strong enough to turn the 5 DMA momentum.
52 Week New Highs
Our 52 week new high charts scores a neutral 0 like the 10 day above for all the same reasons. Stronger day to day but overall the last 5 days have been week. The gain in breadth strength that I alluded to at the beginning of this post shows up here on these charts. We have now put in two building days where we have had successive higher bars. That is a trend that must end for the bears to succeed. Today if we pass our new high counts we would turn the momentum indicators back to bull here and start thinking about the long side again. The developing gap opening is making that less likely as the gap will suck out the momentum for the markets.
Conclusion
| Chart | Score |
| 40 DMA % Index | -4 |
| 10 Day High – Low | 0 |
| 52 Week New Highs | 0 |
| Total | -4 |
If you have ever sailed you know the frustration of bobbling around when there is a dearth of wind. The gauges move in random patterns, the sails hang and the boom wobbles to and fro hoping the next slight puff will fill the sails and build up speed. The boat floats like a cork in the water, rudderless with a seasick grouchy crew. When you are out on the water you can read the wind and its interaction with the sea. It always seems as if the wind is just over there. We sit at that place here in the markets where the indicators are sitting right on their tipping points and just the slightest breeze can make us run one way or another here waiting for a wind to set up. The markets have no real direction and are victims to waves of selling and buying. We need the directional wind.
$SPX
Our SPX chart is basically unchanged from yesterday.. We did get a spike on the open up to 1176 and it looked like the next leg had started only to fail there and then head to the lows. Those percent pullback numbers are doing a good job here pointing out resistance areas so we will use those numbers today.
Because of the weak ADP numbers it looks like the SPX will open below or at the 1168 -1% number. Breaking today the 1163 number will put the bears on some solid ground and reasons to claim a victory. We are boxed in here between 1157 on the low side and 1176.50.
Bulls Plan: Close this morning gap and show how strong the market is by shrugging off bad news. Break 1176 and close above that number.
Bears Plan: Take the gift and drive prices below 1168, break 1162 and close in that area. The ultimate goal is to break 1157.
- Good Luck out there.. Come visit us the room at http://TTTHedge.acrobat.com/traders
Marlin aka RedlionTrader
