The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Monday higher.
- ES pivot 2035.17. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: no trade.
Last Thursday night I called Friday higher based on a big hammer in the Dow. That's generally a pretty good pattern and it was confirmed with a 66 point gain on an op-ex Friday. That now brings us to the last full week of the so far true to form lackluster month of May, so let's see what Monday might have in store.
The technicals
The Dow: While last Friday moved higher, it did so on an inverted hammer that failed to top Thursday's open. We remain in a descending RTC and the indicators are going nowhere fast making me wonder if the Dow has the requisite mojo to make it two in a row, something we have not seen in a month now.
The VIX: Last Thursday I noted a tall gravestone doji in the VIX, adding that "this is quite the bearish sign". And indeed it was as the VIX fell 6.92% Friday on a tall red marubozu, completing the evenign star, sending the indicators lower off overbought, exiting their rising RTC for a bearish setup and completing a bearish stochastic crossover. More downside seems possible at this point. Check out the chart here:
Market index futures: Tonight, all three futures are higher at 12:17 AM EDT with ES up 0.15%. Like the Dow, on Friday ES confirmed Thursday's hammer with a nice gain that completed a bulish stochastic crossover and sent all the indicators moving higher off oversold. It would seem to be a bullish sign were it not for the market's continuing inability to string together two up in a row lately.
ES daily pivot: Tonight the ES daily pivot falls from 2035.17 to 2047.58. That leaves ES above its new pivot so this indicator continues bullish.
Dollar index: After an astonishing month-long run the dollar finally posted a lower candle on Friday, even though it was green with a scant 0.05% gain. Indicators are now extremely overbought, we've bounced off the upper BB and confirmed Thursday's red spinning top. That all makes it looks like the next move is likely lower.
Euro: Similarly, the euro seems to have finally found some support around 1.1209 after a hammer/inverted hammer pair to end last week. Indicators are now quite oversold, we've touched the lower BB and are on the verge of a bulish descending RTC exit. My guess is that the euro goes higher from here.
Transportation: Finally, the trans handily outperformed the Dow on Friday, up a big 1.13% to send all the indicators moving higher off oversold, confirming Thursday's spinning top, and establishing a new rising RTC. That all looks positive for Monday.
Tonight the general gestalt is positive and the overnight futures are guiding higher so that's what I'm going with: Monday higher.
YM Futures Trader
No trade tonight..