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- Friday higher, high confidence.
- ES pivot 1210.08. Switched to March contract.
- Next week bias higher, on technicals.
- Monthly outlook: bias up, on technicals.
- ES Fantasy Trader went long at 1220.25.
Today was very interesting. We got some good economic news in the morning that sent the market up. This was followed by some fairly discouraging news out of Europe. However, unlike past reports this time the negative market reaction was fairly subdued. In fact, the Dow managed to hang on for a 45 point gain. Is this a sign of things to come?
The technicals
The Dow: It might very well be. The 11,819 support line held again today giving us an inverted hammer reversal candle. Also, the stochastic began a bullish crossover and that's always a good indicator. We were even back above the 200 day MA at 11,940 for a while this morning until the Europeans rained on the parade. But that suggests another attack in the works for Friday.
The VIX: The VIX, which had gapped up over its 200 day MA yesterday, gapped right back down below it today posting a 3.57% drop. It closed just above its support at 24.5. I was wrong about the VIX closing higher today, though I was right about it going higher, opening at 24.38 and closing at 25.11. These gap-down green candles are always tough to analyze. I suspect this one was news induced. There's no telling where it will go on Friday.
Market index futures: Tonight we finally have a bit of clarity in the futures. All of the futures are in strong rally mode tonight with ES up a significant 0.7% at 2:15 AM EST. The formation right now is similar (though not quite) a morning star reversal pattern and the overnight action is good enough to take us to the edge of the descending RTC, both bullish signs. The indicators have all bottomed oversold and hooked back up, another good sign.
ES daily pivot: Now 1210.08 - reminder, we're now looking at the March (H) contract. We're now more than 10 points above that, another good sign.
History: According to The Stock Traders Almanac,the S&P was up 20 out of the last 28 on this triple witching Friday.
And the winner is...
I almost hesitate to say anything anymore, having been wrong for two days running. But the crystal ball has defogged tonight and it looks pretty clear that the bulls take it. I'm feeling a lot more confident in calling Friday higher. I'll be truly surprised if we don't get a decent gain to close out the week.
ES Fantasy Trader
Sigh - two days ago I went long and got clobbered. So last night I went short - and got clobbered again. This time it was a 12.5 point loss. Portfolio stats: the account drops to $134,375 after 44 trades (29 wins, 15 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 Tonight we go long at 1220.25 at 1:56 AM.
SLD 10 ES false DEC11 Futures 1207.25 USD GLOBEX 01:48:57
BOT 10 ES false DEC11 Futures 1219.75 USD GLOBEX 13:08:15
Posts
I think the markets are setting up for huge decline that will continue in the first quarter of 2012, the China too has gone in recession and by the time the reality hits the investors it will be too late to exit. Please visit http://www.kalpeshmaniar.com for accurate forecasting and live trades.
ReplyDeleteChina will no doubt play a role, but when you toss Europe into the mix I have to agree - from the way it looks right now 2012 is shaping up to be a tough year.
ReplyDeleteThis market is so hard to read right now. Not sure what to do. Thanks for sharing Michele.
ReplyDeleteThanks very much for the encouragement. It's been a very frustrating year.
ReplyDelete