Actionable ideas for the busy trader delivered daily right up front
- Monday higher.
- ES pivot 2255.42. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
Last Friday the Dow capped off an impressive week of gains rocketing higher another 142 points to put it now into striking distance o the mythical 20,000 handle. I'll admit I didn't see this one coming At the beginning of 2016 I called for the Dow to end up about where it began And for much of the year that was looking about right.
But now with less than three weeks to go in 2016 it's instead looking pretty good that we will end the year with some decent gains. In any event we now move on to maybe the most important week of the month which features both options expirations and a Fed meeting that is all but certain to include another interest rate hike. Let's see how the charts are sizing this up.
The VIX: After a bullish engulfing candle last Wednesday the VIX put in a spinning top on Thursday suggesting it could go either way on Friday. This played into my decision to avoid calling Friday's close. Turns out the spinning top was confirmed with a 7% drop bringing the VIX back below 12 but not to the current support just above 11.50. With this tall red marubozu and indicators not yet oversold, this one now looks like more downside is available on Monday. Take a look at the chart here:
Market index futures: Tonight, all three futures are mixed at 12:32 AM EST with ES up just 0.03% while NQ is down 0.29%.
ES daily pivot: Tonight the ES daily pivot rises again from 2243.92 to 2255.42. ES is still above its new pivot so this indicator just continues bullish.
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 9 3 4 4 0.813 756
June 8 5 7 1 0.643 1393
July 5 6 6 2 0.539 -304
August 1 3 8 0 0.250 120
September 4 5 6 0 0.444 -59
October 10 3 4 1 0.786 314
October 10 3 4 1 0.786 314
November 4 4 5 3 0.636 463
December 2 1 4 0 0.667 41
And the winner is...
RSI on ES has now hit 100, as overbought as it gets. And Dow Theory-wise we saw some bearish divergence form the trans which fell 0.15% Friday on a day the Dow was up 0.72%. But the VIX seems to be in no hurry to move higher, both the Dow and SPX continue to climb their upper BB's and we're not really seeing any selling pressure from the futures in the Sunday overnight. Oil also continues to rise and that was good for the market Friday. I still feel like we're due for a pause here real soon but I can't find any signs of a reversal on the charts. So reluctantly I guess I'll have to call Monday higher.
YM Futures Trader
No trade tonight.