- Tuesday lower, medium confidence.
- ES pivot 1455.75. Holding below is bearish..
- Rest of week bias lower technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader going short at 1454.75.
Last night I said that ES needed to break above its pivot in order to close higher. Well the ES commandos made a valiant effort to take Hill 1457.33 at 2 AM and again at 3:30 AM but were repulsed both times by the Bear defenders. It was all over after that and while the Dow did recover somewhat from its intraday lows, we still finished down 0.38% on the day. As we're finally getting a full week of trading going with full participation, the charts should settle down and give us some more reliable clues. So let's bring out the magnifying glass, Holmes, and start the search.
The technicals (daily)
The Dow: We got some clarity from today's 51 point decline which solidified a congestion range of 13,390 - 13,435. The indicators are also just about at overbought and the stochastic is now very close to forming a bearish crossover. My best guess is that the break out of this range is going to be to the downside.
The VIX: Last night I talked about some support around here for the VIX and it basically held on Monday as the VIX lost just 0.29% to close at 13.79, just under Friday's close. This leaves us just outside the descending RTC for a bullish setup. The stochastic is lying on the floor with nowhere to go but up and the other indicators are now oversold. I take the failure of the VIX to push substantially lower today as a sign it may be getting ready to move higher.
Market index futures:Tonight all three futures are lower at 12:45 AM EST with ES down by 0.09%. Like the Dow, ES gave us a hanging man today. Following two days of spinning tops, it looks like we may finally be getting ready to roll over. The drift lower in the overnight seems to support this. It's also dragging us out of the rising RTC for a bearish setup and the stochastic has just eked out a bearish crossover. This chart definitely looks ready to go lower on Tuesday.
ES daily pivot: Tonight the pivot drops from 1457.33 to 1455.75. With ES mounting yet another unsuccessful assault on the pivot around 3 PM Monday, we remain below the new number tonight, so that's bearish.
Dollar index:I was right about the dollar moving lower on Monday as we lost 0.30% on the $USDUPX. This also formed a bearish evening star pattern and peaked the indicators at overbought. This chart looks likely to continue lower on Tuesday.
Euro: I also called the euro correctly today as it closed up to 1.3120 on a nice green candle. In the overnight tonight it's sort of bouncing around but seems inclined to continue higher. With a complete bullish stochastic crossover and indicators now bottomed at oversold, that seems likely.
Transportation:Last night I was talking about what a great run the trans were having. Tonight it looks like that may be over as we got our first loss in five days, dropping 0.37%. More telling was the candle, a hanging man. The indicators are also starting to turn lower from overbought and today's close was just outside the rising RTC for a bearish setup. That all spells lower for Tuesday.
Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll. We continue to track the poll to see how well it performs. Here's the final cumulative list for 2012.
Wk.# Week % Bullish % Bearish NightOwl SPX Accuracy
1 1/3 46 21 + 1258 1/1
2 1/9 56 37 + 1278 2/2
3 1/17 41 33 + 1289 3/3
4 1/23 46 32 + 1315 4/4
5 1/30 48 31 + 1316 5/5
6 2/6 56 30 + 1345 6/6
7 2/13 48 31 + 1343 7/7
8 2/21 44 32 + 1361 8/8
9 2/27 48 24 + 1366 9/9
10 3/5 43 26 + 1370 10/10
11 3/12 46 32 + 1371 11/11
12 3/19 46 29 + 1404 11/12
13 3/26 39 29 + 1397 11/13
14 4/2 42 21 + 1408 11/14
15 4/9 25 46 - 1398 12/15
16 4/16 26 48 - 1370 13/16
17 4/23 30 48 - 1379 14/17
17 4/23 30 48 - 1379 14/17
18 4/30 44 32 + 1403 14/18
19 5/7 23 50 - 1350 15/19
20 5/14 32 44 - 1353 16/20
21 5/21 30 52 - 1295 16/21
22 5/29 35 42 - 1318 16/22
23 6/4 32 48 - 1278 16/23
24 6/11 28 40 - 1326 16/24
25 6/18 39 26 - 1343 16/25
26 6/25 38 46 - 1335 16/26
27 7/2 41 40 - 1362 16/27
28 7/9 42 38 - 1355 16/28
29 7/16 44 32 - 1357 16/29
30 7/23 33 42 - 1363 16/30
31 7/30 43 22 + 1386 17/31
32 8/6 52 28 + 1391 18/32
33 8/13 43 21 + 1406 19/33
34 8/20 46 31 + 1418 20/34
35 8/27 39 29 + 1411 21/35
36 9/4 31 38 + 1407 22/36
37 9/10 54 29 + 1438 23/37
38 9/17 63 22 + 1466 23/38
39 9/24 52 30 + 1460 23/39
40 10/1 39 39 - 1441 24/40
41 10/8 52 34 + 1461 24/41
42 10/15 41 32 - 1429 25/42
43 10/22 38 41 - 1433 26/43
44 10/29 36 43 - 1412 27/44
45 11/5 44 33 - 1414 27/45
46 11/12 38 46 - 1380 27/46
47 11/19 52 34 + 1360 28/47
48 11/26 48 26 + 1409 29/48
49 12/3 57 21 N 1416 29/49
50 12/10 46 29 N 1418 29/50
51 12/17 52 28 - 1414
52 12/26 52 26 + 1430
1 12/31 40 48 - - 1402
2 1/7 47 30 + + 1466
In the meantime, I note that I changed my vote from bearish to bullish along with the majority of voters. I'm not sure why they did, but I'm seeing a bullish trigger on both the weekly and monthly SPX RTC. We're also in a period of strong seasonality anyway.
Accuracy (daily calls):
Month right wrong no call conditional batting Dow
average points
January 1 1 1 1 0.667 7
And the winner is...
After two days of vaguely bearish charts, tonight the bear case seems to be strengthening as I'm seeing more signs of tops. I'll add that the TLT looks ready to move higher too - always a bad sign for stocks. And the SPX Hi-Lo index hit 100 again on Monday, also a good sign a top is coming. So all in all, I'm going to just say that things are looking good for a move lower Tuesday.
ES Fantasy Trader
Portfolio stats: tonight the account remains at $100,000 as we enter our first trade of the year by going short at 1454.75.
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