Tuesday, February 28, 2012

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, medium confidence.
  • ES pivot 1363.67.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias up.
  • ES Fantasy Trader standing aside.

Well, scratch everything negative I said last night about the market.  Although the Dow did in fact end lower (if you can call a minus 1.44 points a loss) both the S&P and the Naz posted slight gains.  Where does this leave Tuesday?  Read on for my take on it.

The technicals

The Dow: Gosh, I might as well just copy last night's post into this one since everything looks the same.  Yesterday the Dow gave us a doji.  Today we got another, even bigger doji.  Normally, I'd say two dojis like that make a reversal more likely.  But this helium market just refuses to come down to earth.  I'm through calling for a change in direction until I see some proof.  And so far, I don't see it.

The VIX:  As I thought last night, the VIX did go higher today, by 5% but it did it on a gap-up red candle.  And even that five percent bump was not enough to trigger a stock sell-off today.  With the VIX registering a green candle only once in the last seven sessions, it's looking bad for the bears.

Market index futures: Tonight all three futures are up with ES gaining a third of a percent at 1:48 AM EST following news of the German vote on Greece.

ES daily pivot: Tonight the pivot is only slightly down from 1364.42 to 1363.67.  ES broke above the pivot this morning at 11 AM.  Since then, it's only gone higher, extending its gains after midnight.  That's all positive for stocks.

Dollar index: The dollar managed to eke out a tiny gain today but the strengthening euro will put the kibosh on that tomorrow.  And that's another positive for stocks.

Morningstar Market Fair Value Index: Did not update today.

History: According to The Stock Traders Almanac, there's just a small bearish bias to Tuesday.

     And the winner is...

I think I let myself be a bit too influenced by the daily Dow chart which is just moving sideways.  ES is in a clear uptrend now.  Until I see a confirmed reversal sign there, I'm going to have to vote with the bulls.  So for now, I'm going with a higher close Tuesday.

ES Fantasy Trader

Well this short just didn't work out and I'm not sticking around to see about tomorrow, so we took an ugly 10.75 point loss tonight.  Serves me right for trying to anticipate.  Tonight we stand aside while I try to find some more clarity.

The account is now $107,875 after 16 trades (12 wins, 4 losses) starting from $100,000 on 1/1.

BOT    10    ES    false    MAR12 Futures     1372.00    USD    GLOBEX    01:14:08   
SLD    10    ES    false    MAR12 Futures     1361.25    USD    GLOBEX    FEB 27 00:45:31  

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