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- Friday uncertain, ES pivot is key.
- ES pivot 1253.25, holding above is bullish..
- Next week bias historically higher.
- Monthly outlook: bias up, on technicals.
- ES Fantasy Trader standing aside.
Last night we had some very mixed messages with the Dow pointing down but the futures pointing up. The good economic news today provided the deciding vote and helped drive the Dow up 136 points. That leaves just one more day til 2011 is history.
The technicals
The Dow: Today's solid green candle exactly mirrored yesterday's solid red candle - rather unusual. The fact that there was no follow-through to Wednesday's bearish setup is bullish even though the indicators remain quite overbought.
The VIX: The VIX was unable to make any headway above yesterday's highs, finishing down 3.7%, and making an almost but not quite dark cloud cover in the process. This suggests a slight bias lower, which would be good for stocks.
Market index futures: Interesting - as I began writing this, all three futures were in the red. Then at exactly 1:28 AM EST, they suddenly took off like a rocket - quite unusual for what is usually a pretty quiet time of night. There was a story on the newswire about China eyeing "pro-growth" economic policies around this time - I don't know if there's any connection. In any case, we're now looking at small gains rather than losses, which is a positive sign.
ES daily pivot: Rose from 1250.67 to 1253.25. We were above the former number earlier this evening and are even more above the new higher number now at 2:12 AM. I view that as a positive.
Morningstar Market Fair Value Index: Yesterday the index dropped form 0.89 to 0.86 - that's bearish.
History: According to The Stock Traders Almanac,the last trading day of the year is historically bearish.
And the winner is...
Sigh - yet another very tough call. Tomorrow being a Friday as well as the last trading day of the year we'll be looking at another low volume day with a variety of competing influences. The charts bear out this mixed picture. Accordingly, I'm not going to make my usual call tonight. My wild guess though is that if ES can hold up over its pivot by the open then we stand a chance of closing higher. But tomorrow is really just a good day to take off and go to the liquor store to stock up for New Year's Eve.
ES Fantasy Trader
Last night's speculative long in the face of a poor looking Dow chart paid off and just after noon today we took a profit of 4.75 points. Portfolio stats: the account is now $134,750 after 48 trades (32 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. Tonight we're standing aside - there's just too much uncertainty and I don't think there will be much money to be made in the overnight trade anyway.
BOT 10 ES false MAR12 Futures 1249.75 USD GLOBEX 01:28:10
SLD 10 ES false MAR12 Futures 1254.50 USD GLOBEX 12:06:20 
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