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- Monday higher, low confidence.
- ES pivot 2001.33. Holding above is bullish. Now running the "H5" contract.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside.
My my, Santa just kept right on delivering the toys as the rally marched on in a week that wasn't quite as boring as I'd expected, especially with the Dow crossing 18,000 for the first time. I'm dating myself but I remember when it crossed one thousand for the first time. So here we are facing the end of yet another year. I'd take this week off too with another holiday on Thursday but I'd like to at least check on how things finally wrap up. I won't bother posting Thursday night for Friday though. But for now it's on to Monday.
The Dow: Last week the Dow continued a slow crawl into record territory on low volume that left all the indicators at extreme overbought levels. How does 100 for RSI sound? And Friday traded just outside the long rising RTC for a bearish setup. Still, with the holiday last week and the end of the year upon us one must take these charts with a grain of salt. Let's call it a reversal warning but one which requires confirmation.
The VIX: Meanwhile the VIX continued its slide last week to find support exactly on its 200 day MA at 14.00. Support continued Friday giving us a pair of doji stars. With extremely oversold indicators and a stochastic in good position for a bullish crossover any time now, this one looks ready to move higher.
Market index futures: Tonight, all three futures are higher at 12:56 AM EST with ES up 0.08% ES like everything else last week continued higher into record territory, hitting impossibly overbought levels RSI=99.68). So the indicators are now all broken and useless. We still have a tight rising RTC and the upper BB continues to float away, now at 2115.84. So until I see a bearish sign, I guess I just have to think this one will continue higher.
ES daily pivot: Tonight the ES daily pivot rises from 2079.75 to 2083.83. We remain above the new pivot so this indicator continues bullish. Reminder - we're now (obviously) tracking the "H5" contract.
Dollar index: The dollar spent last week in a holding pattern. It did peel off its upper BB though and with highly overbought indicators, the next logical direction from here is lower.
Euro: The euro tried to rally at the start of December but ultimately failed only to resume its march to the cellar and closing at 1.2185 on Friday. On a monthly basis, that's the lowest close since April 2006. With 2010 and 2012 monthly support now broken I'd have to say we're looking at a visit to a patriotic 1.1776 before too long.
Transportation: The trans have been rallying steadily since the 12/17 bottom. Although all the indicators are now as impossibly overbought here as everywhere else, there's no reason not to believe the trans won't take a look at their upper BB at 9285 on Monday.
And the winner is...
Of course it's now the last week of the year and a holiday week at that and they can be tricky. However, seeing no bearish signs on the charts tonight, all I can do is call Monday higher.
ES Fantasy Trader
Portfolio stats: the account now stands at $110,500 after ten trades in 2014, starting with $100,000. We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push. Tonight we stand aside. I think we're probably done for the year and I'm considering dropping this feature next year - I'm just not feeling the love.