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- Thursday higher, high confidence. Bull-bear ratio is 9:0.
- ES pivot 1127.59. Watch for any break under..
- Rest of week bias uncertain, lower possible Friday.
- Monthly outlook: bias down, on technicals
- ES Fantasy Trader going long at 1134.25.
Last night I called for some more upside today and indeed we were well rewarded with another 131 point gain in the Dow. We were strong out the gate and then just drifted higher the rest of the day without the mad and maddening yo-yo swings of recent sessions..
The technicals
The Dow: Put in a strong green candle but left us with mixed indicators. RSI turned lower and OBV is at levels associated with a top, but the stochastic just made a bullish crossover. With no resistance til 11,000 and no reversal pattern on the chart, I tend to believe the stochastic and give this one +1 bulls.
The VIX: Last night I wrote "more downside for the VIX Wednesday" and that's just what we got today with the VIX down another 7.4% on a solid red candle. But even at that, the indicators are still all just coming off overbought. And finally coming down out of Psycholand (the region above 40) can only be a good thing, so +1 bulls.
VIX futures: Again tonight, this chart looks like the VIX itself, reinforcing my belief that we have lower to go Thursday. That's also +1 bulls.
Market index futures: All three are basically unchanged at 1 AM EDT. In fact, the ES chart looks a lot like it did last night. With no reversal pattern in sight and a stochastic just coming off oversold, I see nothing bearish here, so +1 bulls.
ES daily pivot: Now 1127.59. ES being seven points above this now, we're just on the edge of gravitational attraction. The pivot is always worth watching, but without some external influence I don't think it will be a factor tonight. +1 bulls.
Dollar index: Finally! The dollar came down today on a big red candle confirming last night's doji as a top. Its stochastic also executed a bearish crossover today. Even though it remains in its rising regression trend channel, it looks likely to go down at least a bit further from here, so +1 bulls.
Oil: after some confusing signs last night, oil finally did reverse and go higher today. With new support established and its stochastic making a bullish crossover today, it looks like oil will continue higher on Thursday, so +1 bulls.
Morningstar Market Fair Value Index: Today the index rose from 0;77 to 0.79, so +1 bulls.
History: According to The Stock Traders Almanac, tomorrow is actually a positive day, so +1 bulls.
And the winner is...
The bulls, by a shutout with a 9:0 bull-bear ratio. Technically, I'm reasonably confident we're going higher again Thursday, as long as Greece can avoid collapsing overnight and the members of the ECB can keep their mouths zipped for a day or so. Enjoy it while it lasts. While this market still seems to have the mojo right now, I think Friday may go lower.
ES Fantasy Trader
Closed today's trade at 1125.75 for a nice 15.5 point gain. Once again, I left some money on the table, but no one ever blew up their account doing that. There's simply no point being greedy.
Portfolio stats: the account is now $146,375 after 22 trades (16 wins, 6 losses) since inception on 8/18 with $100K.
SLD 10 ES false DEC11 Futures 1125.75 USD GLOBEX 11:07:52
Tonight we go long again at 1134.25.
Posts
Home run, you nailed it!
ReplyDeleteThank you so much. Admittedly I'm on a roll lately, being 4 for 4 this week. And I probably shouldn't even say it because the market has a way of rewarding hubris with nasty surprises. But at least for now, it's cooperating :-)
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