Monday, January 12, 2015

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower.
  • ES pivot 2042.83.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader closed.

In retrospect it wasn't a bad thing to call last Friday as "uncertain" because the Dow did a triple digit turn-around despite all the signs looking bullish the night before.  Let's take a look and see if we've got any more clarity this Sunday night.  As op-ex week gets underway (is it that time again already?), things are sure to get interesting.

The technicals

The Dow:  Well I was a bit surprised on Friday.  I thought the Dow had a bit more upside left than, well nothing at all.  This 171 point dump instantly short-circuited a nascent rally that was only just off oversold and while the resulting candle was a bullish trigger on a descending RTC exit, I'm not convinced.   This chart now doesn't look at all bullish to me.

The VIX:  And hey look at the VIX.  On Friday it was up only 3.17% but it was on a bullish piercing pattern.  However, that wasn't enough to keep all the indicators fro moving lower off overbought so this chart is a question mark for Monday.

Market index futures: Tonight, all three futures are lower at 12:57 AM EST with ES down 0.07%  Like everything else, ES took Friday off, this time with a bearish inside harami that sent the indicators back lower.  The overnight is continuing that so it ain't looking good for ES right now.

ES daily pivot: Tonight the ES daily pivot falls again from 2044.58 to 2042.83. We've now dropped below the new pivot so this indicator turned bearish again.

Dollar index:  I've been reluctant to ever call the dollar lower lately but Friday was one of those rare days when it fell.  The odd thing is that even after putting four red candles in a row, it's kept moving higher - until Friday.  That was the first down day for the dollar in an entire month.  Now we've got a rare dragonfly doji touching its upper BB followed by a tall inverted hammer with indicators still highly overbought.  While I'm still loathe to call the dollar lower ever at this point I've got to say that's how it's looking for Monday.

Euro:  Last Thursday night I wrote that we "might see an up day for the euro on Friday".  And whadaya know about that - on Friday the euro put in its first winning day since Christmas Eve to close at 1.1848 with a descending RTC exit good for a bullish setup.  All the indicators have bottomed and are now rising off oversold and the overnight is gapping higher leading me to believe that there's more upside left here for Monday.

Transportation:  Like the Dow only more so, the trans on Friday took a 1.15% hit unable to make any headway at all.  There's no telling where this one's going next.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    3      0       1           1       1.000

     And the winner is...

I dunno.  It's Sunday night, it's late, and I'm not feeling the love.  Even though we've yet to hit overbought on anything, we're getting some negative guidance form the VIX and the futures and the trans (oh my).  So although it's far from a given, I'm going to go waaay out on a limb and call Monday lower.

Single Stock Trader
VZ retraced some of Thursday's fains on Friday but at this point it's just a hold.  I still see more upside potential than downside risk at 46.76.

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