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- Monday lower, low confidence..
- ES pivot 1688.33.. Holding below is bearish.
- Rest of week bias lower technically.
- Monthly outlook: bias lower.
- ES Fantasy Trader remains short at 1643.00.
Well last Friday could have gone either way from what I could tell Thursday night. Turns out it was down, to the tune of 73 Dow points. It was another one of those U-turn days, although this time the right side of the U was weaker than previously. So with a new week at hand, where does that leave us? Get ready for the running of the charts, snort, snort.
The technicals (daily)
The Dow: After some uncertainty Thursday night, Friday's big red candle left us solidly inside a descending RTC. But it was enough to *almost* cause a bullish stochastic crossover. But "almost" is the operative word. With the lower BB still at 15,417 and falling away at that, it looks like there's still more downside to come.
The VIX: Last Thursday the VIX was too tough to call. Turns out it went up 5.34% on Friday on a move that sent the indicators higher off oversold. With moderately similar action in VVIX Friday, I'd say odds are good for more upside on Monday.
Market index futures: Tonight the futures are mixed at 12:39 AM EDT with ES down by 0.09%, YM down 0.07% but NQ up 0.03%. This sort of directionless trading is typical as we wind our way through the dog days of summer. Anyway, Friday's candle was bearish engulfing and tall enough to keep us in the current descending RTC. It also finally drove RSI oversold (just), but the stochastic is still not really close to a bullish crossover. So on balance, this chart remains bearish.
ES daily pivot: Tonight the pivot dips from 1691.75 to 1688.33. Even with that step down, we remain below the new pivot, but by a bit less. Still, it's bearish on the face of it.
Dollar index: After hitting its lower BB on Thursday, the dollar posted a green harami on Friday that caused the stochastic to curve around in preparation for a bullish crossover. This was also a bullish RTC exit so overall this chart looks ready to move higher on Monday..
Euro: After a bearish harami on Friday, the euro seems to be confirming it in the Sunday overnight with a further 0.18% decline. That's enough to drop it out of its rising RTC for a bearish setup as well as form a bearish stochastic crossover. That's three strikes and yer out. The euro looks like it's headed to the showers on Monday. And that syncs with my call for a higher dollar.
Transportation: Last Thursday the trans looked to be headed for a bullish RTC exit. But alas it was not to be as we dropped 0.64% on Friday on a big inside harami which was enough to keep us inside said descending RTC. Indicators are now closer to oversold than overbought but with the lower BB still not til 6356, the general gestalt of this chart is lower.
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 7 5 5 3 0.667 328
May 3 4 6 4 0.636 85
June 6 5 6 0 0.545 543
July 10 2 4 4 0.875 486
August 6 0 1 0 1.000 373
And the winner is...
Tonight, the charts are all generally bearish, so there's little to quibble about. Logic dictates a call for Monday lower.
ES Fantasy Trader
Portfolio stats: the account remains at $115,000 even after 14 trades (11 for 14 total, 6 for 6 longs, 5 for 8 short) starting from $100,000 on 1/1/13. Tonight we remain short at 1643.00.