Monday ES outlook

[RL8093]

Quote from drmarkan:

If it doesn't gap, I think getting short at the open is the play, with the opportunity to hold the short down to 1520.00.

I'd be careful trying to hold for your 1520 target as there are some strong supports between here & there.

On 7/11 the ES opened ~1520, dropped down to test the 50D ema and bounced north. Today, both 50dma's are above that level and are likely to at least slow momentum. I'm not saying we won't get there (or below), but identify the strongest support levels (there are others besides the 50dma's) and watch the price action closely when we get in those areas and allow that to determine your next actions...

If we hit some of those supports after mid-day when momo is fading, you can expect some of those shorts to take profits and help the mkt to bounce.

R

 

[increasenow]

Quote from reno4nook:

From a contrarian point of view, the VIX is way over its 10dma which is a buy indicator.

Also the VIX candle formation today shows that the panic levels of this morning were driven way down by the close, whch is bullish.

And my favorite short term indicator, the McClellan Oscilator is at -36 which is also signaling a buy.

how does anyone use the VIX when daytrading the ES?..does it help in giving ES daytrading set-ups?

 

[reno4nook]

Quote from increasenow:

how does anyone use the VIX when daytrading the ES?..does it help in giving ES daytrading set-ups?

It's more of a swing trading indicator. But I use swing indicators in day trading.

I personally would be suspicious of any strong moves down on Monday since we're already oversold. Any day trades to the down side would have to be quick and nimble as I except buyers to quickly step in.

cheers,

 

[Option_Trader32]

I don't know if Monday will be a down day or not, but I expect a down move of some significants to go to the end of July.

 

[makloda]

Odd lot short % measured Friday is at levels last seen Feb 27 of this year. Gun to the head, I would say this week will be green.

 

[Spectre2007]

markets don't move up in a straight line, throughout the past years and decade, all these worries impinge on the market, and you will have intermediate to short term cyclical down moves.

the long term trend is still up, but the question becomes how much of a deviation to the downside will the cyclical move be. The fundamentalists will argue that there are a great deal of forces underlying that can hurt the market. Subprime, CDO's, housing, retail sales, commodity inflation, dollar depreciation.

the problem comes in that there are opposing forces at work, to the markets decrements. Mainly liquidity spiggot has been left on for awhile. When commodity prices start heading down, that will be the warning sign to the market. It means liquidity globally is being tightened. Thats why 80 dollar plus Oil means liquidity is still pretty high, which is favorable to the markets in the very near term.

a lot of this contrary sentiment creates the ability for wealth transfer to occur, for those who are looking at the long term trend. The trend will end when US markets have reached parabolic levels, and we are not quite there yet. It should be sometime after the election is over.

wallstreet has an interest in preserving the positive sentiment in the market. It has affiliations with the current GOP administration, and if you notice, the up moves are pretty swift with a breakout that just occurred. Plus bonuses and commissions will be less with the market enters a bear market period.

competing asset classes have to offer rates of returns against inflation that would warrant a shift away from equities. And bond yields arent there yet.

so the summation of forces have created this trend, and the prudent thing to do would be to pick a point during these fear cycles to get long since probability dictates we move back up and test highs again.

sentiment hasn't really shifted, Friday some key names were still green, while the broader market was hit, with a true sentiment shift, everything is thrown out.

the most conservative thing to do in equities is wait for a 200 or 250 day ma test, and get long. Historically that has worked out.

 

[makloda]

Quote from makloda:
Odd lot short % measured Friday is at levels last seen Feb 27 of this year. Gun to the head, I would say this week will be green.

So much for me making market calls

 

[austinp]

<i>"Oscillators have tons of predictive value and are best used to show buy areas within uptrends and sell areas within downtrends. Used correctly they can help predict expected direction after a trade is made. Also, when oscillators diverge with price, there is a great predictive ability as well. Thank you for your time"</i>

Amen

Unskilled craftsmen always blame the tools. Flailing traders mock what they don't understand.

Volume and internals, fundamentals mean jack-s(quat) for trading. Price action is king, and oscillators measure price action momentum. Bodies in motion tend to stay in motion, be that two minutes, two hours, two weeks or two years.

Tech analysis = charting price action rules!

 

[Thunderdog]

Isn't it wonderful how many people can disagree with one another? It's downright "spiritually uplifting." On the other hand, if you had perfect harmony and uniformity of opinion, then who would take the other side of your trades? Besides me, of course.

 

[smilingsynic]

I'll stick to the subject: Monday's ES outlook.

I rely largely on price action and principles grounded on years of my own research. I also follow the VIX, TRIN levels, put/call ratios, and such.

Conclusion? The market is short-term oversold. That is obvious.

But the pathetic attempt of the market to rally today suggests to me that one should expect new lows on Monday. On a daily chart, today will look like continuation, a pause on the strong downtrend.

Best case scenarios for those who are looking to buy (not daytraders) would be either (1) a painfully low open complete with high volume, bad news, tears (on CNBC), and pessimism, coupled with a quick reversal to new highs by 10:30 AM; OR (2) a decent gap up that finds buying and snaps back to new highs after appearing to be failing.

Good luck to all.