Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher, medium confidence.
- ES pivot 1366.08 . Holding above is bullish..
- Rest of week bias uncertain technically.
- Monthly outlook: bias up.
- ES Fantasy Trader standing aside - entry missed..
Last Thursday I wasn't quite sure what to make of Friday, expecting a small range doji. Well we got a small range, with the Dow gaining just 46 points, but it was in the form of a solid green candle. With a holiday-shortened week ahead, let's see if the technicals can give us a clue as to where we might be going on Tuesday. With Greek news coming up, it should be an interesting ride.
The technicals
The Dow: Technically, Friday's advance gave no indications of a possible reversal. In fact, the stochastic completed its bullish crossover on increased volume. With the upper BB at 12,982 and the psychological 13K level still a bit above us, there's still a bit more room to run before encountering any resistance.
The VIX: After spending a few days above its descending RTC last week, the VIX dropped right back into it on Friday., losing 7.49% on a second solid red candle. Its indicators are all in solid declining mode right now too and the lower BB is at 16.81, intimating that we still have close to another point lower to go before a reversal. We're getting there, but not quite just yet.
Market index futures: The only real guidance we have for Tuesday comes from the futures, which did trade for a while yesterday and today. And the futures seem to be liking the news out of Europe. With the announcement of the Greek deal earlier this evening, the futures are all running higher at 1 AM EST with ES up half a percent.
But that still leaves us right around the level from Sunday's open, suggesting that this news was already baked in yesterday. The US holiday is messing with the charts a bit, but this action is obviously good news. The only bad news is that I'm now looking at two gap-up stars on the daily ES, and that's a potential reversal. But being as they came on weekend trading, you have to take them with a grain of salt.
ES daily pivot:Jumped from 1358.00 to 1366.08 tonight. Despite some up and down over the last two days, we were above the old number and just broke through the new number, another positive sign.
Dollar index: The dollar is pretty much hostage to the euro right now. And with the big pop the euro took on the Greek news, you can be sure the dollar's going lower on Tuesday, which ought to be good for stocksd.
Morningstar Market Fair Value Index: On Friday the index remained at 0.96 , the same high point it's reached all month. I'll be looking for it to rise some more to be considered bullish on Tuesday.
History: According to The Stock Traders Almanac, the day after Presidents Day is historically rather bearish.
And the winner is...
With the European markets applauding the Greek developments and the euro headed higher, I can't really see our market going lower on Tuesday. The Dow now clearly seems to be gearing up for an assault on 13,000. I wouldn't be surprised to see that number tomorrow, though perhaps not closing there just yet. All in all though,m I'm reasonably confident we'll see a higher close Tuesday.
ES Fantasy Trader
Unfortunately, I missed the major move in ES that happened right at the open on Sunday, so I'm just going to stand aside tonight. I think most of the money has already been made on this trade. But that's OK - the market is like a bus - there's always another one coming along you can jump on.
The account remains $112,750 after 14 trades (11 wins, 3 losses) starting from $100,000 on 1/1.
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