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- Tuesday uncertain.
- ES pivot 2055.42. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: no trade.
Last night the charts were looking negative but I made a conditional call instead, choosing to wait and see if ES could break above its new pivot by mid-morning Monday. Turns out ES noodled around snorkeling below the pivot until just after the open at which point it shot up right through the pivot and never looked back. And hey presto, we closed higher. The conditional call doesn't always work but it does work often enough to be useful. Tonight we examine how this development changes things for Tuesday.
The Dow: After a big dump last Friday the Dow neatly retraced all of it on Monday, plus a bit to just squeak out a bullish engulfing pattern that bounced off its lower BB. That also sent the indicators higher off oversold and torqued the stochastic around into position for a bullish crossover. Does that make this chart bullish now? I'm a bit wary of that, considering the trouble the Dow has been having putting together winning streak longer than one for a month now.
The VIX: Last night I mentioned that "the VIX ... is showing a possible reversal". That possibility came to be on Monday as the VIX lost 2.39% on a tall red bearish engulfing pattern that stopped the indicators from moving higher. This looks distinctly bearish for the VIX right now.
Market index futures: Tonight, all three futures are essentially flat at 12:48 AM EDT with ES down all of one tick. On Monday, ES put in a classic bullish engulfing pattern to pop back up to 2062.75. But that left the indicators confused with RSI and OBV falling but momentum and money flow rising. The all-important stochastic looks like it's trying for a bullish crossover but it's really just flattened right now. In addition, the overnight is completely directionless. That leaves this chart too tough for me.
ES daily pivot: Tonight the ES daily pivot rises from 2048.50 to 2055.42. ES.is now back above its new pivot so this indicator turns bullish again.
Dollar index: After a giant gap-up doji last Friday the dollar came back in with a 0.05% decline Monday to complete an evening star. With indicators still overbought, this looks bearish for Tuesday.
Euro: On Monday, the euro gave us a bullish piercing pattern with indicators just off oversold after a big dump last Friday. That makes it look like there's more upside potential than downside risk here.
Transportation: After busting through their 200 day MA last week and suffering three ugly days of losses, the three black crows flew away on Monday as the trans peeled away from their lower BB for a 0.74% gain and a bullish inside harami, admittedly not the world's best reversal sign. But indicators are rising off oversold and the stochastic is primed for a bullish crossover. Still, I want some confirmation here first.
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 6 4 8 2 0.667 416
May 4 2 2 2 0.750 433
And the winner is...
Tonight we have a few nominally bullish signs on the charts, including the Dow and the futures (daily), but they require confirmation. And oil, which had a decent gain on Monday and helped propel the party is now sitting just under six month resistance. Finally with no guidance whatsoever from the overnight futures, I'm afraid I'm just going to have to call Tuesday uncertain.
YM Futures Trader
No trade tonight..