Monday going lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Monday lower, high probability
• ES pivot 1207.00. Current price is below that.
• Rest of week bias higher, rebound possible by Thursday.
• Monthly outlook: bias higher, see previous post for details.
• ES Fantasy Trader opened new short position at 1191.25.

Recap

Last Thursday night I called for more upside even after a four day rally in the Dow and we in fact did manage to tack on an additional 76 points to finish off a nicely rewarding week.  The weekly Dow candle in fact made a strong bullish engulfing pattern that took us to the top, or slightly above a trading range that goes back five weeks now.  In addition, the weekly indicators all appear to have bottomed from oversold levels and are turning upward now.  Coupled with much higher volume last week than the week before, this all looks bullish on a weekly basis.

The technicals

Short version again tonight.  That said, the daily charts aren't looking as promising.  The Dow lately has been running on a cycle of about 15 days between peaks.  It's been exactly that long since the last peak.  We're also looking at a 5 day winning streak, the longest since last June.  And the daily indicators are now in overbought territory.  RSI has actually already peaked, a bearish sign.

And the futures are all significantly lower tonight, ES being down by 1.7% at 2:25 AM EDT.  It's also below its new daily pivot of 1207.00.    So while the weekly outlook may be positive, things aren't looking so hot for Monday, especially with more bad news out of Greece again.  So I'm looking for a lower close Monday possibly followed by some recovery later on this week, more than likely on Fed news.  That will clearly trump the technicals this week.

ES Fantasy Trader

I had to cancel my long trade from last Thursday.  I thought the contract would roll over automatically from U to Z, but it didn't leaving my trade in limbo and with no way to fairly value it.  So all I can say is that I was on the right side and it would have made money had I entered the Z contract.  But I'll leave the stats as they were and call this one a wash.  For tonight, we're going short at 1191.25.