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- Monday higher, low confidence.
- ES pivot 2000.67. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside.
Well we took last Friday off and wouldn't you know it, that was the day the Dow finally decided to break out of its week-long doldrums on improved volume with a nice 68 point advance and almost a new record high. Now perhaps with all the players back in town we can do some technical analysis for real. So let's see whither the charts for Monday.
The Dow: Finally, after days of indecision, we've got some meat here to chew on as the Dow put in its best close in a month and broke out from its week-long sideways action. This clearly broke out of a shallow but narrow descending RTC for a bullish setup and formed a bullish stochastic crossover..So I have to think this chart has more upside left for Monday.
The VIX: And the VIX in mirror-image to the Dow meanwhile fell out of its rising RTC with a 4.35% drop for a bearish setup and a bearish stochastic crossover. So with RSI descending but still overbought, it looks like there's more downside left here on Monday..
Market index futures: Tonight all three futures are lower at 12:29 AM EDT with ES down 0.09%. Like the Dow, on Friday ES broke out of consolidation for a record close. However, the new overnight is cooking up a dark cloud cover, though the stochastic just completed a bullish crossover. With this much conflict, I can't offer an opinion on this chart tonight.
ES daily pivot: Tonight the ES daily pivot ticks up from 1999.50 to 2000.67. Despite a slow drift lower in the overnight we remain above the new pivot so this indicator is now bullish.
Dollar index: After blasting through its upper BB on a big gap up last Thursday, the dollar gave 0.09% of it back on Friday, though on green a harami that was just enough to remain in the rising RTC. So while the uptrend remains intact, this pattern is too tough for me tonight - pass.
Euro: And after last Thursday's big dump, the euro put in a small DCB on Friday in the form of a spinning top. But that's being non-confirmed in the Sunday overnight as the euro resumes its march to the cellar, now down to 1.2937, an area of weak support from the past two days.There simply continues to be nothing bullish about this chart.
Transportation: The trans had a very nice day last Friday with another record close at 8602. That leaves them oversold but the stochastic is not yet forming a bearish crossover and the upper BB is still a ways off at 8652. It makes sense that the trans will try to hit that level before reversing.
And the winner is...
The charts are not unanimous tonight but the bulk of the analysis is positive. So with the futures down a bit, I'm going way out on a limb and calling Monday higher.
ES Fantasy Trader
Portfolio stats: the account remains $114,250 after eight trades in 2014, starting with $100,000. We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push. Tonight we stand aside.