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- Tuesday higher, medium confidence.
- ES pivot 1633.92. Holding above is bullish.
- Rest of week bias higher technically.
- Monthly outlook: bias lower.
- ES Fantasy Trader standing aside.
Well I called last Friday higher and it didn't work out but that's so long ago now that I'm sure no one's even interested anymore. So let's just move on to a new week and a new month.
The technicals (daily)
The Dow: On Friday the Dow put in a nominally bearish engulfing pattern, but with end of week and end of month stuff going on, I'm taking this one with a grain of salt. Indicators remain low suggesting the bias is more towards the upside from here.
The VIX: After a big gap up last week, the VIX put in three reversal warning candles. Add in Friday's tall inverted hammer and that makes four. With a stochastic on the verge of a bearish crossover, I'm thinking that what went up is about to come down.
Market index futures: Tonight all three futures are higher at 12:35 AM EDT with ES up by an impressive and unusual 1.01%. This move completely negates the dark cloud cover we got last Friday, helps establish a new rising RTC and just gave us a newly completed bullish stochastic crossover. That all leaves this chart looking bullish.
ES daily pivot: Tonight the pivot notches down from 1636.42 to 1633.92. After being above all day last Friday, we're even higher now, so this one is looking clearly bullish.
Dollar index: After last Thursday's bust through the 200 day MA< we saw follow-through on Friday as the dollar gained another 0.17% on a green spinning top. It left the indicators considerably overbought though so I'd say there's at least a possibility of a move lower on Monday.
Euro: The euro continues to be trapped in a steep descending RTC, despite having hit oversold two days ago. And it's continuing lower in the Monday overnight so I'd say there's a definite possibility we'll hit the 200 day MA at 1.3137 in a day or two.
Transportation: The trans underperformed the Dow badly on Friday, down 1.14%. That was enough to touch the lower BB intraday and move the stochastic into position for a coming bullish crossover. While there's no reversal candle on this chart, I think the downside is limited from here.
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 11 3 6 2 0.813 687
And the winner is...
The first day of most months are historically bullish and September is no exception despite its poor performance overall. And with generally bullish charts tonight plus the futures guiding higher, it looks logical to call Tuesday higher.
ES Fantasy Trader
Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15 total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13. Tonight we continue to stand aside - this time because again I feel like I missed the entry with ES having already posted a good size move this evening.