Actionable ideas for the busy trader delivered daily right up front
- Monday higher, low confidence
- ES pivot 1798.42. Holding above is bullish.
- Rest of week bias higher technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside
How do you like that? Last Thursday night I wrote "break out the thorazine" and it looks like Mr. Market took his does because all of a sudden on Friday, good news was good news (imagine that) and the Dow had its best day in a month. Very interesting... So let's see how this development changes the technicals as we run down the charts for Monday.
[Note: once again, Blogspot's spell checker seems to be on strike (for a higher minimum wage no doubt) so I apologize in advance for any typos].
The technicals (daily)
The Dow: After a pretty glum week, the Dow went out with a bang last Friday with a jolly green marubozu that blasted it right out of its descending RTC for a bullish trigger, caused RSI to bottom convincingly on oversold, and formed a bullish stochastic crossover. So this chart is now looking bullish.
The VIX: Last Thursday night I wrote "I really can't believe the next move is anything other than lower.". And on Friday the VIX had clearly had enough. The VIX rarely spends three days around its upper BB, and last week's four days was highly unusual, leaving the VIX ripe for a fall. And fall it did, crashing right back through its 200 day MA on a big gap down for an 8.55% loss and a bearish stochastic crossover. But even that still left it overbought. So I have to think that even at 13.79, there's still room to run lower on Monday.
Market index futures: Tonight all three futures are higher at 12:18 AM EST with ES up by 0.15%. Friday's big ES pop ends the latest descending RTC and formed a bullish stochastic crossover but the indicators are still nowhere near overbought and the upper BB is way up at 1816 so this chart looks like it's got more upside available.
ES daily pivot: Tonight the pivot jumps from 1786.75 to 1798.42. Despite this move, ES still remains a good 10 points above the new pivot, so that's continued bullish.
Dollar index: Last Friday the dollar attempted some retracement of Thursday's big dump but to no avail, settling for a red spinning top at the base of Thursday's marubozu. We're now sitting just off the lwoer BB but indicators are not particularly oversold and we've yet to get a bullish stochastic crossover, so I'm not too optimistic on this one..
Euro: And on Friday the euro continued climbing its upper BB, a move that continues in the overnight. While the indicators are now fairly overbought, I see no real reversal signs here just yet, so continued higher looks likely.
Transportation: Pretty much the same story as the Dow here: bullish RTC exit, bullish stochastic crossover, and RSI bottoming. So with not even any resistance until 7215 this chart now looks bullish too.
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 7 5 8 2 0.643 674
November 6 6 2 1 0.538 123
December 2 2 1 0 0.500 225
And the winner is...
A big move like we had on Friday practically begs for retracement but I'm not so sure we'll see it on Monday. The charts are all looking reasonably bullish now so the logical call is for Monday higher.
ES Fantasy Trader
Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17 total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13. Tonight we stand aside.again.