Tuesday looking lower

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

• Tuesday lower, medium confidence..
• ES pivot 1285.58.  Holding under is bearish..
• Rest of week bias lower technically.
• Monthly outlook: bias up.
• ES Fantasy Trader standing aside.

Recap

Last Thursday night I was expecting a turn in the market but I didn't think it would happen on Friday.  Well, it did, in the form of a minor 49 point drop in the Dow.  We're coming up on yet another holiday-shortened week, but it's still worth taking a look at where we might be going on Tuesday.  Here's a quick look with more detail to follow tomorrow.

The technicals

The Dow: Of greater significance than the small decline was the hanging man the Dow put in.  That makes now three hanging men in a row, and the largest of the three.  I'd say the Dow is trying to tell us something here, if you know what I mean.


Market index futures: The stock market may be closed Monday but futures trading resumed Sunday evening and right now at 2:10 AM EST all of the big three are down.  ES is off nearly half a percent after a gap down opening.  With a three day pattern of small hanging man, doji, big hanging man, ES looks ready to move lower still.

ES daily pivot: Moved down from 1290.00 to 1285.58.  However, ES is still trading below that, at 1283.00.  Unless it can break above this level, that only strengthens the bear case.


     And the winner is...

Right now, I'd have to say it's looking like there's more downside risk than upside potential.  Asia was down in their regular hours today and the repercussions of the S&P European ratings downgrades last week may not yet be fully baked into our market.  We'll have a clearer picture tomorrow evening, but at the moment I'm leaning to a lower close on Tuesday.

ES Fantasy Trader

Because of the  typical holiday-induced distortions, we're standing aside again tonight.

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