Thursday maybe a bit higher

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

• Thursday higher, low confidence.
• ES pivot 1297.67.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias up.
• ES Fantasy Trader standing aside.

Of note


You may know I've been following the saga of the decline and fall of Kodak since last fall in my regularly updated post here.  Well, we just learned that, to the complete surprise of absolutely no one, Kodak has finally, at long last gone bankrupt, having just filed Chapter 11.  It is the end of an era and the end of an icon.  My sympathies go out to all the employees and retirees who will be hurt by this action.

Recap

Last night I published at 8 PM as a gesture of sympathy with the Stop SOPA movement.  And it was a perfect example of why I usually post around 2 AM instead.  At 8 PM it looked to me like we were going lower today.  Instead, the Dow gained an impressive 97 points.  Is there any more where that came from?  Let's take a look.

The technicals

The Dow: The big thing about today's action was that we finally managed to close above the 12,500 resistance level that has dogged us for over a week now.  The next resistance is the upper BB at 12,674, then last summer's highs around 12,725, and finally last year's high at 12,876.  For the time being, today's solid green candle invalidates yesterday's inverted hammer and the preceding hanging man.

The VIX:  Last night's solid green candle sure looked like it would run the VIX higher today and it did - at first.  After a big gap-up opening, it dribbled back down to actually end lower by 5.9%.  That formed a  very negative looking dark cloud cover that takes the upward wind right out of the sails of the VIX for Thursday.

Market index futures: Aside from a mysterious spike around 9:45 PM this evening, the futures have been fairly quiet and are essentially flat at 1:45 AM EST.   The indicators are all broken in overbought mode so no guidance there.  There's no candlestick reversal signs on this chart but the upper BB at 1310.68 represents the next resistance.  Today's close above 1300 is a promising sign.

ES daily pivot: Moved up from 1291.00 to 1297.67.  With ES at 1302.50 at 1:40 AM EST, we're in good shape as long as ES doesn't break under that level.

Dollar index: Gapped down today with all its indicators in decline, pointing the way for lower still on Thursday, also good for stocks.

Copper: Broke out over resistance yesterday and continued higher today.  It is now climbing its upper BB on the daily chart.  No reversal sign here, another positive sign for stocks.

     And the winner is...

Tonight, I'm giving it to the bulls.  Not so much because I see any roaring signs of upward pressure as because I don't see any signs of downward pressure.  Even though a lot of indicators are overbought, we still have some room to run before encountering more resistance.  So on that basis, I'll call for Thursday at least a bit higher, though I'd be surprised if we run up as much as we did today.

And because we're so close to the ES pivot, if we should break convincingly below that before the open on Thursday, then all bets are off.

ES Fantasy Trader

Because I'm not expecting a significant move in the overnight, I'm going to take the conservative route and stand aside once again. One of the luxuries we have as traders compared to blackjack players in Vegas is that we don't have to play every hand.  It's OK to just sit at the table and watch without worrying about some surly pit boss coming around to chase you away.

Portfolio stats: the account remains $97,375 after 4 trades (2 wins, 2 losses)