Actionable ideas for the busy trader delivered daily right up front
- Monday lower.
- ES pivot 2024.25. Holding above is bullish..
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
Op-ex Friday is always good for a surprise and last Friday was no exception. This time though the surprise was that the technicals played out as they appeared, and the absence of any bearish signs meant just that as the Dow kept right on motoring higher, up another 121 points on a day that was basically all bullish. So with the excitement of the Fed and op-ex now out of the way maybe we can get back to doing some TA for Monday. Let's go and ogle the charts for a while.
The Dow: On Friday the Dow served up yet another green marubozu as it continues to refuse to deliver a reversal candle despite indicators now at extreme overbought levels (RSI=99.14). So I still can't call a top here.
The VIX: And similarly the VIX is now at extreme oversold a it just touched its lower BB again last Friday to close at 14.02, only two days after hitting 15. We are now sitting on seven month support and unlike the Dow Friday gave us a gap-down doji star, and that's a definite reversal warning.
Market index futures: Tonight, all three futures are lower at 12:31 AM EDT with ES down 0.17%. On Friday ES extended its gains making it three up in a row on a fat green spinning top. With indicators now extremely overbought this serves as something of a reversal sign. And with the Sunday overnight going nowhere, I'm wondering if ES has the mojo left to go any higher.
ES daily pivot: Tonight the ES daily pivot rises from 2024.25 to 2035.75. And that, plus an overnight sag in ES is enough to put it back below its new pivot so this indicator now flips over to bearish.
Dollar index: As I thought, after its monster dump last Thursday the dollar put in a DCB-style rebound on Friday. On any other day, a 0.35% move would be pretty big. This one barely regained the dollar's lower BB. Still with indicators now rising off oversold and some sign of a reversal, this chart now seems to have more upside potential than downside risk.
Euro: After two big days last Wednesday and Thursday, the euro finally gave it up on Friday back down to 1.12960 on Friday, coming off its upper BB. Indicators remain overbought but the Sunday overnight seems to be wanting to go higher again so I'd be wary of calling it lower on Monday.
Transportation: And finally on Friday the trans confirmed its 200 day crossing with a big 1.45% green marubozu that more than doubled the Dow's advance, continuing its Dow-theoretic outperformance. So nothing bearish here once again.
Month right wrong no call conditional batting Dow
January 9 5 5 0 0.643 1433
February 9 3 5 3 0.800 1133
March 5 3 4 1 0.667 125
And the winner is...
Tonight there are a few clouds gathering on the horizon. The VIX is throwing off a decent reversal warning, oil moved lower with a dark cloud cover on Friday, and the futures are all to the downside as I write this late Sunday night. So even though it's a bit of a reach, I'm going to take a stab at calling Monday lower.
YM Futures Trader
No trade tonight..