Tuesday higher

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

• Tuesday higher, medium confidence. Bull-bear ratio is 4:0.
• ES pivot 1193.42.  Holding above is bullish.
• Rest of week bias uncertain, on US & EU politics.
• Monthly outlook: bias uncertain on politics.
• ES Fantasy Trader remains long.

Recap

I had a bad feeling about today despite a majority of last night's indicators looking bullish.  Turns out my instincts were correct as the Dow handed us a nasty 249 point dump amid continuing uncertainty in Europe and the comedic antics of our very own Twelve Stooges in Washington.  And you super-committee-ians are earning a paycheck for what exactly?  Where is Donald Trump when you need him to tell you you're all fired?

But before I tell you how I really feel, let's look at the charts to see where Tuesday might lead.  Tonight we again concentrate on just the Big 4.  And I am deliberately excluding the commodities and historical effects I normally consider because of their erratic behavior lately.  I find this helps cut down on the noise when the VIX is at elevated levels. 

The technicals

The Dow: As I suspected, the Dow chart last night was looking a bit queasy.  And so today it barfed up a gob of points to take us right to the lower BB.  The last two times a big drop took us to that level, we rallied the next day.  A stochastic finally making a bullish crossover tends to support that view, so +1 bulls.

The VIX: Put in an unusual dark cloud cover on a gap-up red candle today.  So while the VIX did gain 2.8% today, it was almost all right out the gate with the rest of the day retracing.  I know I called for a lower VIX today and didn't get it but tonight the case is much stronger for lower tomorrow, so +1 bulls

Market index futures: Unlike last night, right now all three are actually in the green by non-trivial amounts, with ES up 0.44% at 1:15 AM EST.  There's support at 1191 and the indicators are all now quite oversold.  The stochastic has completed a bullish crossover and OBV has bottomed.  Having now hit the lower BB, I think we're due for a bounce from here, so +1 bulls.

ES daily pivot: Now 1193.42.  We've finally moved above the pivot, or more to the point, the pivot has moved below the current price of 1195.50.  The pivot is now support, so unless we cross back under, it's looking good for Tuesday.  +1 bulls.

     And the winner is...

It's all bulls, 4:0.  I'm not ready to call it a trend, but I think we're due for an oversold bounce on Tuesday.  That's it in a nutshell.


ES Fantasy Trader

Last Friday I said that sometimes you just have to take the heat.  This trade is starting to get pretty hot though.  Ouch.  Portfolio stats: the account still remains $173,500 after 35 trades (26 wins, 9 losses) since inception on 8/18 with $100K.