Actionable ideas for the busy trader delivered daily right up front
- Tuesday uncertain.
- ES pivot 1671.25. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader remains long at 1695.00.
Well it looks like Mr. Market is starting to get a slight case of the ol' Debt Ceiling Blues. After a big dump right out the gate Monday morning, he made a valiant effort to retrace half that, only to see all those gains evaporate in the final hour as we ended right back where we started. And so it goes. The Destroyers of Wealth in Washington continue their pig-headed ways, every last one of them, fiddling away like mad while America burns. Hello? Earth calling Washington - clown time is over, you need to get your act together. Meanwhile, we trudge along analyzing the market as best we can to see what the charts might have in store for Tuesday.
The technicals (daily)
The Dow: Monday's 0.90% loss felt worse than it looks on the charts. We simply remain in a long-running descending RTC with highly oversold indicators. Nothing is likely to change until the Clowns squirt their last flower and honk their last rubber bulb horn. And so the bears roar on.
The VIX: The VIX made a big move on Monday, gapping up a whopping 16% to close more than an entire point above its upper BB and handily clearing resistance at the patriotic 17.76. This is starting to look like back in late May when the VIX crawled up its upper BB for two whole weeks before finally giving up. So Monday's gap-up hanging man sure looks like a reversal candle, but given the current insanity, anything's possible.
Market index futures: Tonight all three futures are finally higher at 12:36 AM EDT with both ES and YM up by 0.01%. That's actually a lot better than we were looking at this hour last night when ES was down 0.64%. ES actually tried moving higher Monday morning but was rejected ending the day just about where we started on Friday. The overnight is forming a star doji that came within two points of the lower BB so there's at least a hint of a reversal now. We have support form the lower BB and some more at 1656 but with the continuing Washington nonsense, blah blah blah you know the drill...
ES daily pivot: Tonight the pivot drops from 1679.42 to 1671.25. That still leaves us below the new pivot, though by a lot less than last night. But until ES can break back above, this one remains bearish.
Dollar index: On Monday the dollar was unable to capitalize on Friday's move out of its descending RTC. The 0.24% drop cancels the bullish setup by dropping us just barely right back into that channel. You can see the dollar weaving all over the place since the gummint shutdown began. Accordingly, I have no clue where it might be headed next. Hey, sometimes life is just like that..
Euro: The euro has been a bit more stable, though I was wrong about it falling on Monday. Instead it put i a fat green spinning top to close at1.3580. And then promptly gave in all back in the overnight where the new candle is starting to look like bearish engulfing. And with the bearish RTC exit complete and a bearish stochastic crossover complete, I'm sticking to my story and claiming the euro will go lower on Tuesday.
Transportation: The trans continued to put in lower highs, on Monday, down 1.09%. But even that wasn't enough to drive the indicators oversold. We're now near support at 6525, but overall this chart remains bearish.
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
September 8 3 3 3 0.800 485
October 1 0 2 1 1.000 136
And the winner is...
I'm seeing a few turn-around signs tonight, but not a lot. For example the NYSE A/D line had come down a lot and the SPX Hi-Lo indicator has come down off 100, though at 80, that's not exactly a roaring bull case. What we do have is a VIX that looks ready to come down, though I hesitate to say it because it's not really being well-behaved right now due to you-know-what. So the market isn't a slam-dunk lower either, not like last night. All in all, I'm not getting a good enough read to call this one either way, so all that leaves is Tuesday uncertain.
ES Fantasy Trader
Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16 total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13. Tonight we remain at 1695.00.