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- Monday lower.
- ES pivot 2041.75. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
Last Thursday's conditionla call for Friday worked out because ES remained above its new pivot by mid-morning Friday and the Dow did end higher. But that was then and this is now so let's take a look at what the charts might be hinting at for Monday as we begin another op-ex week.
The Dow: After a big dump last Thursday the Dow tried to recover on Friday briefly surpassing Thursday's open early on, but finally to no avail, as it just spent the rest of the day edging lower. In the end it still managed to eke out a 35 point gain on a tall inverted hammer. It's a sign of a move higher but one that requires confirmation, particularly since the indicators are still only about halfway between overbought and oversold.
The VIX: Last Thursday night I let a bullish crossover get the better of me on the VIX. Turns out it was a dark cloud cover that prevailed (something I'll admit I did not notice, perhaps because the candle was green) and the VIX dropped back five percent on a narrow doji star. And that bullish stochastic crossover has now turned into a bearish crossover. But with a star, all we can do is wait for confirmation.
Market index futures: Tonight, all three futures are lower at 12:17 AM EDT with ES down 0.12%. ES gained a bit on Friday with a lopsided green spinning top that left indicators still wandering around in No Man's Land between overbought and oversold. This isn't a good predictor either way though with further deterioration in the Sunday overnight, it's not looking all that great for Monday.
ES daily pivot: Tonight the ES daily ticks up from 2041.00 to 2041.75. So ES is below its new pivot and this indicator is therefore bearish.
Dollar index: After an indeterminate Thursday, the dollar fell again on Friday, very nearly down to support from way back last October. Indicators remain oversold but I don't put too much stock in them as the momentum here remains overwhelmingly negative.
Euro: Meanwhile the euro continues to remain stuck in a now seven day trading range featuring an amazing six spinning tops in a row, with nothing to show for any of them. This is why this candle requires confirmation. The new Sunday overnight is marginally higher but we're still waiting for the break and there's no telling which way this one is going to go.
Transportation: Last Thursday night I said that the trans were looking due for a winning day soon and that cam eon Friday as they rose just over one percent on a tall green inverted hammer that tested their 200 day MA, caused RSI to bottom out, exited a steep descending RTC for a bullish setup, and formed a new bullish stochastic crossover. On balance, that all looks positive for Monday.
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 8 6 6 1 0.600 222
April 2 1 2 1 0.750 139
And the winner is...
One effect of last Friday was that both ES and the Dow exited long rising RTC's back to the January lows for a bearish setup. The market's also been in a vague downtrend the last few days anyway but is not yet sufficiently oversold as to make a move higher a high probability. So with the overnight futures guiding lower and despite a VIX that could go either way, I'm going to go out on a limb and call Monday lower.
YM Futures Trader
No trade tonight..