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- Friday higher, medium confidence.
- ES pivot 1494.83. Holding above is bullish.
- Next week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader going long at 1497.75.
[ES pivot values corrected, Friday, 2/1/13, 12:24 PM]
I know I was taking a chance calling Thursday lower in view of the fact that it was the last day of January, but sometimes the logical point of view pays off as the Dow lost 50 points, defying the historical odds. Despite this, January was a stellar month and the needle on the famous "January Barometer" spun all the way around twice and flew off. Now let's lay some odds on Friday. Will we roll seven or snake eyes? Let's shake the charts for luck and find out.
The technicals (daily)
The Dow: With two consecutive equal length red candles, things aren't looking so hot for the Dow at first glance. Interestingly though, even with that we're still inside the rising RTC, just barely. That means we cannot yet declare the uptrend over even though the indicators have now started to come down off their pegged-oversold levels of recent days. So this chart looks possibly, but not definitely bearish.
The VIX: Meanwhile, the VIX actually posted a drop today, down 0.28% after forming a hanging man at the top of Wednesday's green candle. We remain in the rising RTC here too but the indicators on this chart have been moving higher for days and are now well into overbought territory. I'd say there's a fair chance of the VIX moving lower in a day or two.
Market index futures:Tonight all three futures are higher at 1:21 AM EST with ES up by 0.32%. On Thursday ES traded outside its rising RTC for a bearish trigger. However it did it on a small morning star type doji. The new overnight candle is gapping up giving support to the doji so I'm hesitant to be too bearish here right now. See my comments on the trans below which are painting a similar picture.
ES daily pivot: Tonight the pivot drops from 1498.25 to 1494.83. A rising ES in the overnight combined with this move now leaves us above the new pivot, so this becomes bullish.
Dollar index: This one surprised me. Rather than move higher, the dollar lost again today, down another 0.13% as it following a lower BB that's now falling away. Once that starts happening, it can go on a while so in the absence of a good reversal candle, I'm not going to call the dollar higher from here just yet. There's no support til 54.40 on the $USDUPX anyway.
Euro: And as the dollar drops, so rose the euro. After putting in a small green doji on Thursday, it looks like that's being rejecting with the overnight candle gapping sharply higher to remain well inside the now eight day rising RTC. Currently at 1.3626, with no reversal candle and the upper BB now at 1.3365, this one looks to still have room to run higher on Friday.
Transportation: On Wednesday the trans crashed out of their rising RTC for a bearish setup. Thursday traded entirely outside for a bearish trigger. However, it did so on a green spinning top which makes me cautious about being too dogmatically bearish here.
Accuracy (daily calls):
onth right wrong no call conditional batting Dow-101
And the winner is...
What we have here is a market that looks like it's having second thoughts about moving lower. What was looking bearish last night now isn't looking quite so bad. And given the fact that the first day of February is historically very strong with both the Dow and SPX up 9 of the last 10 according to The Stock Traders Almanac, I'm not wanting to buck those kinds of odds. So in the absence of any real bearish pin action, I'm just going to call Friday higher.
ES Fantasy Trader
I said last night that I wasn't going to take any chances with this trade and I didn't. As soon s I saw it moving against me, I got out, and just in time to eke out a half a point profit. And for the benefit of anyone following the live trades on Twitter - here is what greeted me when I tried to post the exit:
I'm like, huh? Did some Middle Eastern despot get overthrown again? Anyway, I was able to get through an hour later, but an hour is an eternity in trading ES. So just a word to the wise - don't trust Twitter. I'll continue to post the trades live just to prove I'm really doing it, but there's no guarantee they'll get through.
Portfolio stats: the account inches up to $93,875 after 4 trades (3 for 4 total, zero for zero longs, 3 for 4 short) starting from $100,000 on 1/1/13. Tonight we're entering our first long trade of the year at 1497.75..
BOT 10 false ES MAR13 Futures 1494.00 USD GLOBEX 11:12:43
SLD 10 false ES MAR13 Futures 1494.50 USD GLOBEX 01:00:00