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- Wednesday lower, medium confidence..
- ES pivot unavailable - SOPA blackout...
- Rest of week bias lower technically.
- Monthly outlook: bias up.
- ES Fantasy Trader standing aside.
The technicals
The Dow: I'm a bit concerned about the shape of today's action - an inverted hammer that was unable to break the12,500 resistance level that has been stopping us for five straight sessions now. We are now at the top of this rage with not much momentum seemingly available to push higher.
The VIX: Took a 6% jump today out of oversold territory on a solid green candle that portends higher once again, a bearish sign for stocks.
Market index futures: Right now, it's still very early at 8:40 PM Tuesday night. However, all three futures are running just barely in the green. The trend though, going back to about noon today, is lower.
ES daily pivot: Unavailable tonight since I'm writing this before midnight.
Morningstar Market Fair Value Index: Today the index took a big drop from 0.90 to 0.87, a bearish sign.
History: According to The Stock Traders Almanac, this whole week is historically pretty bad. Wednesday "has been down big 9 of the last 13".
Sentiment: It's the start of a new week so once again it's time for the TickerSense Blogger Sentiment Poll. We continue to track the poll to see how well it performs. Here's how things stack up so far this year:
Week % Bullish % Bearish NightOwl SPX
1/3 46 21 + 1258
1/9 56 37 + 1278
1/17 41 33 + 1289
The SPX number is the closing price of the S&P on the Friday before each new poll comes out. The "NightOwl" column is how I voted. Since the poll is for 30 days out, after the first four weeks we'll be able to see how well we did. For the record, I voted bullish yet again this week, mainly on the basis of my reading of the monthly SPX chart as well as on seasonality.
Today we note that both bullish and bearish sentiment have declined since last week. .But bullish sentiment declined more and in fact is now at its lowest level of the still young year. That alone could be considered a contrarian bullish indicator. Going by the bull-bear spread though, not so much. With just an 8 point gap between the two, there's not much predictive power there.
And the winner is...
A tough one but given the bulk of evidence I'm going to say lower on Wednesday. I'm just not feeling the love.
ES Fantasy Trader
Once again we're standing aside in solidarity with the SOPA blackout.
Portfolio stats: the account remains $97,375 after 4 trades (2 wins, 2 losses)
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