Monday higher possible, rest of week uncertain

Last Thursday night, I was weakly bearish on the market for Friday.  Turns out the Dow posted a 43 point gain after wandering around the flat line most of the day.  So I was wrong and J-Trader was right by sticking with his buy signal from the day before.

Now we're at an interesting juncture.  Friday's gain came on significantly increased volume and the Dow is now rather oversold.  The VIX also fell on Friday for the first time in five sessions and its indicators have now peaked from overbought levels.  The VIX looks ready to go lower still tomorrow (Monday) which would imply higher stocks.

However, the weekly Dow chart doesn't look good at all.  In fact, it's almost the opposite of the daily chart.  On the weekly, the indicators are looking overbought and last week's big loss formed a nasty looking bearish engulfing pattern.

So all in all, I'd say that an advance might be possible tomorrow but the rest of the week's not looking so hot.  For that matter, all three market futures are actually lower right now by nearly half a percent.  That's the main negative point I'm seeing right now and it's worth keeping in mind.

Key numbers to watch on Monday: 1310.33, the ES daily pivot.  At 1:30 AM EDT we're sitting just below that at 1309.50.  If we can break above this before the open, that strengthens the outlook for the day considerably.  If not, look for a lower close.  Friday's Dow daily pivot was 12,478 (I don't have Monday's number yet but it should be pretty close to this).  We closed just barely above that at 12,480.  If the Dow opens up and stays above its pivot, again that would be bullish.  It's not guaranteed by any means though.  We'll see.