Tuesday likely higher

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

• Tuesday higher, low confidence.
• ES pivot 1204.75.  Failure to hold above is bearish.
• Rest of week bias uncertain
• Monthly outlook: bias down, on technicals.
• ES Fantasy Trader holding long at 1220.25.

Recap

We've seen this movie before.  Seems like every day lately the market opens up and begins to rally.  Then at some point during the day, some European opens his mouth and rains on the parade.  Today's downpour courtesy of the ECB cost us another 100 Dow points.  Is there no end to this?

The technicals

The Dow: The good news today was that despite going lower, we closed outside the right edge of the descending RTC from December 12.  That is a bullish setup.

Market index futures: Finally, all three futures are higher at 2:45 AM EDT.  However, ES is playing tag with the new daily pivot at 1214.75.  Although ES is still up 0.42%, I really want to see it break back over the pivot.  On the plus side, I note that ES OBV has turned positive from the lowest levels of the new contract yet, and that's often a good sign.

Sentiment: It's Monday again and the latest Ticker Sense Blogger Sentiment Poll is out.  Here' how the numbers shake out:

          Bullish Bearish Neutral

Last Week   52%     26%     22%

This Week   41%     38%     21%

In this case at least, the contr4arian assumption played out.  The bulls had a two to one advantage last week and the market had a terrible week.  Keep in mind of course that the poll is a 30 day outlook, not the coming week.  Still, I can't help but think that recent events affect peoples' feeling about the future, whether it's 30 days out or 7 days out.

What's interesting is that this week, the bullish sentiment has dropped considerably, creating a virtual bull/bear tie.  This reflects the ongoing tug of war between good economic news at home and a continuing flood of disconcerting noise from Europe.  Until the Europeans figure a way out of their mess, this market schizophrenia is likely to persist.

And for the record, I changed my vote to negative this week, based on my reading of the monthly SPX chart.  After a strong October, November gave us a long legged doji.  December so far at least is confirming that with a basically solid red candle.  That spells lower next month in my book.

     And the winner is...

Tonight, I'm giving it to the bulls.  With ES up nearly half a percent and looking ready to attack the pivot again, and the market in general getting pretty oversold, I think it's time for at least a one day rally before Christmas.  Tuesday may be it.  Assuming those pesky Europeans can keep quiet for that long.

ES Fantasy Trader

As I mentioned last night, on Friday I decided to hold my slightly underwater long over the weekend, a decision I may yet come to regret.  But it is what it is.  We'll see.. Portfolio stats: the account remains at $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