The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Monday uncertain.
- ES pivot 2055.75. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
Well I sure got fooled by April 1st last Friday. Turns out that the historical tendency of the first trading day to rise trumped some pretty negative looking charts. Let's go now to those same charts to sort out this apparent discrepancy and figure out what it implies for Monday as we begin the first full week of April.
The technicals
The Dow: Friday's green candle dwarfed Thursday's for a bullish engulfing pattern. Resistance at 17,725 was smashed and the indicators all rose to extreme overbought. Next resistance is at 17,889 and there's no bearish signs on this chart right now.
The VIX: The VIX popped higher Friday morning but it was all downhill from there as it ended with a tall red marubozu right back down to 13.10, its lowest close since last August 17th. And even that was only enough to barely send the indicators oversold. With support at 13.55 gone and the lower BB continuing to fall away, there are no bullish signs on this chart right now. The only thing is a stochastic getting ready for a bullish crossover, but it's not there yet.
Market index futures: Tonight, all three futures are essentially flat at 12:27 AM EDT with ES up just 0.02%. Last Friday ES laughed at Thursday's red spinning top and motored higher up to 2065, right on five month resistance. The candle was a hanging man, the indicators have now gone overbought, and the new overnight is making no further headway raising the question of whether ES has the mojo needed to move higher again on Monday.
ES daily pivot: Tonight the ES daily pivot rises from 2052.83 to 2055.75. That leaves ES above its new pivot so this indicator changes back to bullish.
Dollar index: On Friday the dollar confirmed Thursday's green hammer with a 0.04% gain on a tall green spinning top that sent the indicators all oversold. After falling so far last week, this is a hint that there might be at least a little retracement in order on Monday
Euro: Meanwhile the euro continued raging higher on Friday making it five up in a row to close at 1.14165, its best close since last October 14th. The indicators are all extremely overbought now and we also touched the upper BB on Friday before retreating on a green spinning top. That's a reversal warning and yet the Sunday overnight shows no signs of caving just yet.
Transportation: In a bit of bearish divergence, on Friday the trans closed down 071% ion a day the Dow was up 0.61%. The result was a tall gap-down red hammer that successfully tested the 200 day MA. Indicators are wandering about between overbought and oversold so this chart is somewhat lacking in clarity.
With a bunch of charts at important S/R lines, overnight futures going nowhere, and it being Sunday night, this one is a tough call. All these reversal signs require confirmation. so it looks like I'm just going to have to settle for calling Monday uncertain.
YM Futures Trader
No trade tonight..