Actionable ideas for the busy trader delivered daily right up front
- Tuesday higheronly if ES stays above pivot, else lower.
- ES pivot 1844.00. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside..
Well the Olympics are finally over and after OD'ing on everything from figure skating to hot dog skiing for two solid weeks, I'm slowly starting to recover So we fondly bid adieu to all the winners and the lugers (that joke just never gets old, does it), and it's time to return to that other endlessly entertaining circus called the stock market. So let's get right to it, as Team Night Owl goes for the gold and a winning forecast for Tuesday. We're back, baby!
The technicals (daily)
The Dow: Last week, the Dow dropped out of its rising RTC but the bearish setup never got a trigger and instead we got Monday's Rally of Nothing. Or was it? We saw high volume and a bullish stochastic crossover from a high level. So with no resistance til 16,250, I have to think there's still some upside left here, like the Dutch speed skating team.
The VIX: This chart was even more clear - a classic bearish stochastic crossover on Monday with a 3% drop that sliced right through the 200 day MA and hey you've got to think this one's going lower than the US men's hockey team.
Market index futures: Tonight all three futures are just a tad lower at 1: AM EST with ES down by 0.07%. ES had a good day Monday with a bullish engulfing candle that finally managed to crack resistance at 1843 that had stood in the way all year so far. The indicators are just overbought but haven't been terribly useful lately. And the upper BB isn't til 1871, so more upside is possible here though the lack of pin action in the overnight does raise an eyebrow.
ES daily pivot: Tonight the pivot rises from 1837.00 to 1844.00. That leaves ES just barely above the new pivot. While this is still marginally bullish, ES is in easy striking distance should it decide to break under, and that would be bad.
Dollar index: The dollar spent most of the Olympics falling faster than Bode Miller on the downhill until last Thurday. But that breakout didn't hold and now it looks like it wants to move lower again. But the indicators remain oversold so this chart is sort of a conundrum wrapped in an enigma. I'll need the photo finish to figure out this one.
Euro: The euro is similarly conflicted, having now put in four dojis in a row around 1.3740. In the absence of any RTC or a clear direction, more sideways drifting seems to be ahead.
Transportation: A note of caution here. On Monday the trans posted a decent 0.44% gain but did it on an inverted hammer that touched the upper B. The only saving grace is that we're still a ways from overbought o this isn't automatically fatal. But we still need to wait for the second run down the track to see if this time will hold up.
Accuracy (daily calls):
And the winner is...
I'm a bit worried about things looking somewhat overbought at the moment, but the overall patterns remain bullish, or more to the point, they don't look bearish. I'm feeling a bit half-hearted about it all, particularly with ES's proximity to its pivot. So I'm going to make it a conditional call: Tuesday higher onyl if ES manages to stay above its pivot by mid-morning, else lower.
ES Fantasy Trader
Portfolio stats: the account remains at $103,000 after the first trade of 2014. We are now 1 for 1 total, 1 for 1 long, 0 for 0 short. Tonight we stand aside.