Monday, December 29, 2014

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • 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 technicals

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.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132

July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38

December   5       2      5           1       0.750    256

     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.


  1. I read you all the time, and value your work greatly. Fact is, the two or three comments I made, you either deleted or rejected, unclear why. I took it as a negative. I was a senior broker at Morgan, who lived in a Zen Temple, I honestly thought I bothered you. But now you force the issue. David Korn Special Projects.

    1. Well thank you very much for reading. I don't recall deleting any comments from you. Possibly they were auto-deleted by Google's spam filter. I'm not really sure how that works.

      My policy on comments is this: I don't moderate comments. Anyone can post anything. But it has to be on topic. The only things I delete are obvious spam ("hey great deals on v1agara at this web site") and people who are simply promoting their own paywall sites without contributing anything here. I don't reject comments just because I disagree with them.

      My apologies if I somehow cut you off.


Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.