Monday Outlook

This market is as hard to read as any I've seen in years. The only good thing I can find right now is that the uptrend that goes all the way back to last July is still completely intact, as you can see in this weekly Dow chart. And although we had some bad daily declines last week, overall the week ended with a small advance, and that came on higher volume than the big decline of the week before.

That said, there's no guidance from the VIX right now which is hovering in the middle of its Bollinger band range. Oil, on the other hand shows no signs of retreat and as I showed in my last post, oil has been in an inverse correlation to the market since the end of January, and that correlation is getting more pronounced. I think a lot will hinge tomorrow on the market's reaction to the announcement this weekend about possibly releasing oil from the Strategic Petroleum Reserve. If that weakens oil, the market should react positively. And historically, we are entering the middle of March, which is the best part of the month historically.

But for the time being, all three futures are down (1 AM EST). ES and NQ are both down by just over a third of a percent, so that's not very encouraging. Beyond that, I admit I was wrong about last Friday and I don't have a real good feel for where we're going tomorrow.

Important numbers to watch for tomorrow

12,100, the center of the RTC. The low for the Dow on Friday was 12,079, exactly that same point on this rising line for that day. A break below this is bearish, above is bullish.

12,203, the Dow daily pivot. If we can get over this, then bullish. Hitting this level and reversing would be bearish.

12,250, the most recent resistance level in the Dow established last month.

And of course, 12,000 on the other end, the prime psychological support.

Performance

Although the Dow gained slightly last week, it was not a good week for me. I lost 1.32%. It was a week that just did not suit my style and my attempts to work around this only made it worse. However, the damage could have been worse I suppose and I'm still up 6.69% year-to-date, compared to the Dow's 5.11%. We'll see what this week brings.