Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher, low confidence
- ES pivot 1808.42. Holding above is bullish.
- Rest of week bias higher technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside
Well we did close higher on Monday but it was pretty much what you'd expect after such a big move last Friday as Mr. Market took a pause to catch his breath. Will he get his second wind on Tuesday? Let's check the charts and see.
The technicals (daily)
The Dow: Monday's Dow candle was an inverted hammer but it isn't supported by the indicators which are still only just barely off oversold. The stochastic has also just completed a bullish crossover so I'd take this reversal warning with grain of salt. Still it's questionable whether the Dow can resume its advance so soon after last Friday's big move.
The VIX: Last night I wrote "there's still room to run lower on Monday." and run it did, down another 2.18%. The candle was mostly bearish engulfing and the indicators are now clearly moving towards oversold. The VIX shows no interest in filling Friday's big gap down and with the lower BB way down at 11.6, I'd say the downside is still not over.
Market index futures: Tonight all three futures are higher at 12:18 AM EST with ES up by 0.07%. On Monday ES gave us a stubby gap-up spinning top vaguely reminiscent of an evening star. But the indicators are not yet overbought and the overnight is continuing higher. With no resistance now til the upper BB at 1816 and a new rising RTC established I see no technical signs of a move lower on this chart.
ES daily pivot: Tonight the pivot rises again from 1798.42 to 1808.42. And like last night we remain above the new pivot, though only by two points this time. But so far ES is showing no interest in attacking it, so this one remains bullish.,
Dollar index: Last night I wrote "I'm not too optimistic on this one" and that pessimism was rewarded with a 0.22% drop on Monday. That was enough to drive the indicators oversold and keep us inside a descending RTC as we dribble down the lower BB. I see no reversal signs here, so lower looks likely again.
Euro: Last night I wrote "continued higher looks likely" and that's just what we got on Monday. All the factors in place last night are still there tonight and the new overnight is already up another 0.13% so it looks like this upward move still has a ways to go, possibly all the way to resistance at 1.3800.
Transportation: Last night I wrote "this chart now looks bullish", and so it was, up another 0.35% and handily outperforming the Dow on Monday. So now we have two white soldiers, an upper BB at 7285, no resistance til 7257, a completed bullish stochastic crossover, rising indicators, and a new rising RTC. I'd say this sure looks continued bullish.
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 3 2 1 0 0.600 230
And the winner is...
The technical situation tonight is at least as bullish as it was last night and mostly for the same reasons so the logical call is simply Tuesday 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.