Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher, low confidence.
- ES pivot 1779.75. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside
Wow - well I sure wasn't expecting a 192 point pop in the Dow on Monday - that one just came out of the blue. Of course since I'm always net long, all that was hurt was my pride, but still. What further surprises may this week have? Maybe we can dig up some dirt in the charts.
The technicals (daily)
The Dow: I was far too conservative last night about the Dow's doji off the lower BB. Turns out to have been an excellent reversal sign, and one that drove the Dow right out of its descending RTC for a bullish setup and also gave us a bullish stochastic crossover. So this chart has now turned bullish.
The VIX: At least I called the VIX correctly when I wrote "there could be more upside potential from here" because the VIX gained 1.71% on Monday in a move that keeps pace with a rising upper BB. That now makes four in a row of touching the upper BB. And with indicators now coming off overbought and a stochastic leveling off for a bearish crossover, I'd say that further upside is now quite limited and the VIX is due to go lower Real Soon Now. A drop in VVIX on Monday with a hanging man supports this idea.
Market index futures: Tonight all three futures are ever so slightly higher at 12:43 AM EST with ES dead flat and YM up just 0.07%. Monday's big move in ES took it right to the edge of its descending RTC for a bullish setup and gave us a bullish stochastic crossover so this chart now turns positive.
ES daily pivot: Tonight the pivot steps up from 1776.50 to 1779.75. With ES trading sideways in the overnight we remain above the new pivot so this indicator now turns bullish.
Dollar index: Last night I wrote that the dollar "wants to retrace some of last Thursday's big gains" and that's what it did, down 0.15% on Monday almost totally erasing that pop. But with a green candle and rising indicators the momentum now swings to the up side so now I'm looking for a move higher on Tuesday.
Euro: The euro tried to make a big move on Monday but was pulled back to end with small gains. It's making another run on resistance at 1.3769 right now but with indicators remaining quite overbought and no distinct RTC for guidance, I'm not sure it can really push much higher right now.
Transportation: Last night I wrote "this chart is looking at least a bit bullish", and so it was, with a big 0.91% bit to the upside on Monday. A complete bullish stochastic crossover reinforces that there's more gains to come.
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 5 4 2 0 0.556 169
And the winner is...
It's admittedly going to be a fairly crazy week but the technicals now seem to be lining up on the plus side. So I may regret this, but I will now officially make a call of 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.