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- Tuesday higher, low confidence.
- ES pivot from Friday 1244.08.
- Rest of week bias historically higher.
- Monthly outlook: bias up, on technicals.
- ES Fantasy Trader standing aside - ES closed.
Last Thursday I thought we still had some room to run higher and Santa delivered one last Christmas present in the form of an additional 124 Dow points. With a quiet week ahead and the futures still not open for trading again, there's not a whole lot to go on this evening, but let's see what we can do.
The technicals
The Dow: Friday's close of 12,294, albeit on low volume, was still significant in that it finally broke the 12,225 resistance level we've been trying to pass since October. From here, there's no more resistance until 12,386, the upper BB. And while the indicators are now in overbought territory, they have not yet given a reversal signal.
The VIX: The VIX meanwhile broke under its support at 21.5 and now has no support til its lower BB at 20.14. And without a reversal candle it looks like it still has room to test that level.
Morningstar Market Fair Value Index: On Friday the index rose another tick to 0.88, a bullish sign.
History: According to The Stock Traders Almanac,the first trading day after Christmas is quite bullish.
And the winner is...
Well there's not much to go on here, but I'm going to say we still have a bit more room to go still higher, although the overbought alarm bells are just starting to ring faintly in the distance. We may see a pullback of some sort this week but I don't think it will be Tuesday. Absent any new disasters from Europe and assuming continued good news at home, I'm going to call Tuesday higher.
ES Fantasy Trader
Last Thursday night I wrote " I may regret this in the morning, but tonight we're going short at 1232.50." Well I did and Friday we covered this ill-advised short for a nasty ugly loss of 24 points. Portfolio stats: the account is now down to $127,250 after 46 trades (30 wins, 16 losses) since inception on 8/18 with $100K. Reminder: the portfolio will reset to $100K cash on January 1st, to make year-over-year comparisons easier No trade tonight - ES is still closed..
SLD 10 ES false MAR12 Futures 1232.50 USD GLOBEX DEC 22 00:40:18
BOT 10 ES false MAR12 Futures 1256.50 USD GLOBEX DEC 23 01:42:43
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