Actionable ideas for the busy trader delivered daily right up front
- Monday uncertain.
- ES pivot 1844.00 . Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside.
Well it looks like Friday's post somehow never made it out (probably because I uh, forgot to hit "Publish" (doh!)). That's what I get for not bothering to read my own blog. Sigh. FWIW, I was calling the day lower and that's what we got. Now let's see where Monday is going and we'll try to make sure this gets blasted out to the Webiverse on time.
The technicals (daily)
The Dow: OK, so despite last Thursday's big dump we did not get a DCB on Friday, continuing instead even lower. That drove RSI well into oversold, though at 19 not extremely so. Same goes for the stochastic - still not ready to commit to a bullish crossover. The only stopping point I see now is the lower BB at 15,985. The support at the even 16K level may be of as little help as it was the last time we dove under (ie. none).
The VIX: After blasting through its 200 day MA on Thursday and its upper BB too, on Friday the VIX just kept right on going, fueled by Putin, fake Chinese economic numbers (they're all fake), the phase of the moon, and whatever for a 10% gain. That took it from oversold to overbought in just one day, a rare occasion. That also puts the chart of the last five days in a classic exponential and we all know what that means - what blasts up, always comes down. While we don't actually have a reversal candle here at the moment, you can bet it won't be long in coming.
Market index futures: Tonight all three futures are vaguely flat at 12:38 AM EDT with YM down by just 0.01% and ES dead even. On Friday ES gave us a nice dragonfly doji. Coming as it did after a down week, this is a pretty good reversal indicator. The indicators are now quite oversold though the stochastic looks to be still a day away from a bullish crossover, so we really need confirmation of this doji on Monday.
ES daily pivot: Tonight the pivot drops from 1854.42 to 1844.00 even. We remain below the new pivot so this indicator remains bearish.
Dollar index: The dollar remains in a month and a half long descending RTC and while the indicators are now quite oversold, there's no indication that this downtrend is over yet..
Euro: And so of course the euro is in a corresponding rising RTC. After being unable to clear 1.3904 for three days, the overnight seems to be gearing up for another attack. With the upper BB now at 1.3944, that level is not out of reach.
Transportation: The trans lost just a bit on Friday for a doji star. This would suggest a reversal but the indicators are not yet on board so we have to wait for confirmation here.
Accuracy (daily calls):
And the winner is...
Tonight the technicals are shows some decent reversal signs but they all require confirmation and I'm not quite willing to go out on that limb just yet, particularly after Sunday's Anschluss vote in the Crimea. Since this came as a complete surprise to absolutely no one, it may not move the markets on Monday but there are other signs that the bottom may not quite be in yet. The SPX Hi-Lo indicator isn't all that low yet, though the NYSE A/D line has stopped making lower highs and lower lows. So it definitely doesn't look bearish to me but it's not quite bullish enough for me to call it higher, so that only leaves one choice: Monday uncertain.
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.