Monday uncertain

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

• Monday uncertain.
• ES pivot 1467.00.  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

I called Friday uncertain as a possible topping day.  It is of course too soon to say if we've topped or not but we did get a pretty mixed session with the Dow gaining all of 17 points and the SPX down just 0.07.  Which all leaves us at an interesting juncture for the coming week.  Let's see what the charts have to say about it.

The technicals (daily)

The Dow: Friday's 0.3% gain came in the form of a hanging man.  This of course requires confirmation but with the indicators still overbought and RSI apparently having already topped, I'd say the odds here are at least even for a move lower Monday.

The VIX:  Just when it seemed the VIX couldn't go any lower, it did, dropping another 0.96% on Friday to close at 13.36.  We have to go back to June 2007 to find the last time we were at these levels.  Of course, that was shortly before the VIX exploded, hitting nearly 90 by October 2008.  Can the VIX still go lower?  Sure.  It's lower BB is falling away rapidly, now at a crazy 7.31.  And let's not forget that for four entire years, between 2003 and 2007, the VIX regularly found support down around 10.  We're not quite that low yet, but the longer term view of the VIX is that it has only one way to go, and that's higher.

As for Monday, hard to tell.  We're in a sort of congestion area now between 13.2 and 13.7.  I've been calling for it to move higher for a week now and it hasn't happened, so I'm just going to shut up for a while.

Market index futures:Tonight all three futures are higher at 12:50 AM EST with ES up by 0.12%.  This gives us a green candle for the moment but we're still below the level of the red hanging mannish thing on Friday.  I note that 1471 has proven to be strong resistance three days running now.  Can we break that on Monday?  I'm not so sure.  We had a decent run last week and that put ES at overbought.  People have been calling for 1475 and even 1500 lately, and while I agree we'll see that by springtime, I don't think we'll get there on Monday.

ES daily pivot: Tonight the pivot rises from 1464.00  to 1467.00 even.  With a rise in the Sunday overnight, we remain above the new pivot, so that's bullish.

Dollar index:And what of the dollar?  On Friday, it gave us yet another doji, this one a gap down bullish morning star.  Indicators are still not quite yet overbought and we still have aways to go til the lower BB so some caution is required, but overall I'd say we're at least setting up for a move higher soon.

Euro: Meanwhile, in Euroland, the currency continued its winning ways on Friday, closing at 1.3346, just above its upper BB.  And in the Sunday overnight, it's actually moving higher still, now at 1.3398, entirely above the BB.  This has moved it into overbought territory  but in the absence of a reversal candle, I still can't call the euro lower just yet.

Transportation:Like the hanging man in the Dow, the trans on Friday gave us a reversal candle in the form of a nice star.  Indicators here remain overbought so the next logical move is down.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    2      2      3           1       0.600     0

     And the winner is...

The SPX Hi-Lo index has been stuck on 100 for three days now.  It's unusual for it to go that long without seeing some sort of pullback.  The charts have bestowed a bunch of dojis on us, but they all require confirmation, so they're not much help.  With no major economic news coming out on Monday and no fake political "crises" looming, it's hard to see what will move the markets.  Maybe some good earnings could power another leg higher.  I just don't know and I'm just not seeing any good direction from these dang charts tonight.  And we're once again entering op-ex week with all the gyrations that generally brings.  So once again, it's Monday uncertain.  But that's OK - our time will come.

ES Fantasy Trader

Portfolio stats:  tonight the account remains at $103,750 after one trade (1 for 1 total, zero for zero longs, 1 for 1 short).  Tonight we stand aside once again in the face of a lack of good guidance.