Actionable ideas for the busy trader delivered daily right up front
- Monday lower, low confidence, waiting on economic news..
- ES pivot 1249.25. Breaking under is bearish.
- Rest of week bias higher, on technicals.
- Monthly outlook: bias up, on technicals.
- ES Fantasy Trader standing aside..
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| Fasten your seat belts, boys... |
This coming week we have the irresistible force, being a slew of economic news here at home, meeting the immovable object, namely Europe. And thrown into the mix is the expectation of the imminent arrival of Santa Claus and his yearly rally. And if that isn't enough, it's another triple witching week. To paraphrase Mae West, "Fasten your seat belts.boys, it's going to be a bumpy week".
The technicals
The Dow: The Dow remains unable to gain any traction above the 12,165-12,200 resistance zone. Four swings last week, four misses. A big move down on Thursday and entirely retraced on Friday. The daily indicators look overbought but the weekly stochastic is actually executing a bullish crossover. What does it all mean? Who the heck knows. Let's go ask Mr. Vix and see if he knows.
The VIX: Took a big dump on Friday with a 13.76% drop not seen since the beginning of October. However, unlike then Friday's close at 26.38 left us just above the 200 day MA at 25.55. If you look at the way the VIX has behaved this year when approaching the 200 MA from above, you'll see that it either bounces right off, or spends a day, not more than two, below and then rises again. This suggests that we'll at least take a look at 25.5 and that allows for at least a bit more upside in the market early in the week.
VIX futures: The futures look to be guiding lower too, supporting the idea of at least one day of lower VIX.
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| ES daily |
ES daily pivot: Rose a bit tonight to 1249.25. We were above the pivot most of Friday and remain above it now. However, we're only six points off, so the pivot is within striking distance. Watch this number before the open for any attempts to drive under. That would be bearish.
History: According to The Stock Traders Almanac,the December triple witching week is quite positive historically.
And the winner is...
Hard to say. I was going to suggest a weak bullish bias until I saw an item come through in the news that the FX boys are cutting their forecasts for the euro. The euro's been in an 8 day downtrend, putting upward pressure on the dollar and that' bad for stocks. So honestly, at this early hour it could go either way.
I'm going to guess that we'll see another small range doji day as traders wait to get the whisper numbers on Tuesday's economic data, and see what those pesky Europeans have been cooking up over the weekend. J-Trader is going to a short position but I'm just going to stand aside on Monday again. Perhaps tomorrow will bring some clarity to the market.
If I had to guess I'd say that if ES breaks the 200 day MA and its daily pivot, we'll close lower, otherwise higher.
2:15 AM Update: ES has just broken under the 200 MA and is now down nearly half a percent, so I'm going to go with a bearish call for Monday.
ES Fantasy Trader
On Friday I had to throw in the towel on my Thursday night short for a 20.25 point loss. Portfolio stats: the account has dropped to $146,750 after 41 trades (28 wins, 13 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
SLD 10 ES false DEC11 Futures 1233.00 USD GLOBEX DEC 9 01:18:28
BOT 10 ES false DEC11 Futures 1253.25 USD GLOBEX DEC 9 12:23:22
Tonight we're standing aside again - no trade.
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