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- Friday higher, low confidence..
- ES pivot 1290.00. Holding over is bullish..
- Next week bias lower technically.
- Monthly outlook: bias up.
- ES Fantasy Trader standing aside.
Things were looking good for my call for a slightly lower close today until a late day rally hoisted the Dow to a modest 22 point gain. Nevertheless, the Dow continues to have trouble cracking resistance at 12,500. Will Friday be the day?
The technicals
The Dow: Today's gain came in the form of a second hanging man in a row. As we've seen before, one hanging man, bad - two hanging men, real bad. There's no guidance at all from the indicators which are all still stuck in overbought-broken mode. But the candlesticks are looking bearish.
The VIX: The VIX has been putting in some strange looking candles the past few days with a big inverted hammer today. Meanwhile it just continues to trend lower. There's some support at 20 just below today's close but that's about it.
Market index futures: The futures on the other hand are all running in the green tonight. At 1:40 AM ES is up a non-trivial 0.23%.
ES daily pivot: Rose nearly five points to 1290.00 tonight but ES just continues to move up up and away. Rising away from the pivot is a positive sign. The funny thing is that while the Dow is looking toppy, Es just seems to keep climbing the wall of worry. After two doji days in a row, we're simply continuing higher. We've left the 1279 resistance line in the dust. At this point there is no resistance until the psychological 1300 level and then the upper BB at 1311.
History: According to The Stock Traders Almanac, Friday is only slightly more bullish than today.
And the winner is...
Hard to say, once again. I have the feeling that this rally is getting a bit old here. I have yet to have a losing day this year after eight sessions and my trading account is up 4.7% YTD. Clearly this is unsustainable. In fact, it's starting to remind me a bit of the way last year began. We're getting overdue for a pullback and I expect one sometime over the next few days.
Will it be tomorrow? I'm guessing not. I still just don't really see enough technical reversal signs or bad economic news lately. I think we have one more day of gains possible on Friday before some profit taking sets in. I'm more cautious about the early part of next week. We'll just have to see.
ES Fantasy Trader
Tonight we threw in the towel on our short for a loss of 12 points. We are now going to stand aside for a day to avoid getting whipsawed.
Portfolio stats: the account drops to $97,375 after 4 trades (2 wins, 2 losses)
BOT 10 ES false MAR12 Futures 1294.75 USD GLOBEX 01:24:23
SLD 10 ES false MAR12 Futures 1282.75 USD GLOBEX JAN 10 20:15:24
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