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- Tuesday higher, low confidence.
- ES pivot 1555.00 . Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- ES Fantasy Trader standing aside.
Once again the market opened down but then spent the rest of the day floating back up to the surface - the "rubber ducky" market as I call it. You can push him underwater but he always pops right back up. Quack quack. Now let's see about making a (duck) call for Tuesday.
The technicals (daily)
The Dow: Monday was very similar to last Friday - an initial dive followed by retracement. Only this time the Dow managed to finish in positive territory by 48 points thereby keeping the one up/one down streak alive, now up to, gosh, it seems like 147 days by now. They were even talking about it on CNBC. Anyway, Monday gave us a second hammer in a bullish engulfing configuration as well as a stochastic just a hair away from a bullish crossover. So the chart is back to looking bullish.
The VIX: Last night I wrote "I'd be quite surprised to see the VIX move higher from here on Monday." And indeed there was no surprise on Monday as the VIX dropped 5.24%. So - rejected by the 200 day MA, two red candles, bearish stochastic crossover, no support until 12.71 - it all spells lower again to me.
Market index futures:Tonight all three futures are higher at 1:42 AM EDT with ES up by 0.11%. Monday's big green candle in ES confirmed Friday's hammer and formed a bullish engulfing pattern. It also brought us just back into the rising RTC. The overnight seems to be providing follow-through ad with a freshly completed bullish stochastic crossover, I see no reason why ES can't visit its upper BB at 1565.79 on Tuesday. That also happens to mark resistance from last week.
ES daily pivot: Tonight the pivot vaults from 1544.83 to 1555.00 even. We were above before and remain well above the new pivot, so this remains bullish.
Dollar index: Last night I wrote "the dollar at least has a shot at moving higher from here." Well the shot was a bullseye on Monday as the dollar jumped 0.32% to confirm Friday's hammer and very nearly give us a bullish stochastic crossover. Interestingly, the dollar and the market which for a long time had been inversely correlated, now appear to be moving in sync. And this chart looks ready to move higher again on Tuesday.
Euro: After putting in a simple star on Monday the euro resumed its advance overnight and is now close to its upper BB at 1.3094. This move also has the indicators quite overbought and the stochastic is flattening out for a bearish crossover. However, we remain inside a rising RTC, so while there's at least a chance of a move lower on Tuesday, it's not a sure thing.
Transportation: The trans continue to outperform, gaining 0.90% on Monday to the Dow's 0.33%. We also now have a completed bullish stochastic crossover, an oversold RSI, and a bullish RTC trigger. Looks like more upside in store here on Tuesday.
Accuracy (daily calls):
Month right wrong no call conditional batting Dow
January 5 7 6 3 0.533 -101
February 3 4 5 6 0.692 131
March 5 7 5 2 0.500 121
April 2 1 1 0 0.500 89
And the winner is...
I'm seeing essentially no bearish signs tonight. Now I almost hate to say it because it would end the one up/one down pattern, but it sure looks like the logical call is for Tuesday higher. I feel like I'm going way out on a limb saying it, but sometimes that's a good thing.
ES Fantasy Trader
Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13. Tonight we stand aside yet again because even though everything is looking bullish, I can't shake off that one day wonder thing we've got going.