Wow, was I ever wrong about today. All the signs seemed to be lining up for an advance, and yet we ended up with a 51 point drop in the Dow. On top of that, as of right now (1:15 AM EDT) we are staring at an appalling 2.08% decline in the ES futures, for no reason I can see other than the fact that the Nikkei closed down a whopping 12%. While the Japanese certainly have good reasons for selling off their market, I'm afraid I just don't get the connection that much to the US market. The NQ and YM are down by almost as much as ES. It's looking to me like a massive panic type reaction and that's never good.
The only hope I can see right now is that the futures sell-off seems to have stopped around midnight at the 1259 level in the ES, which is the January support. ES has now bounced back to 1270. If this trend can continue, today's candle will be a classic hammer and that is a powerful reversal signal. Assuming technicals still mean anything anymore.
If not, the next support levels are 1260, 1250, 1235, and 1215. Below that, 1192 and 1174. Oil is back below $100 but the oil/market correlation seems to be changing again. Whereas we've been in an inverse correlation, lately oil is trading with the market. I'm not sure oil is leading the market right now.
The VIX meanwhile was rejected by its 200 day MA once again and put in a dark cloud cover. I really hate to sound like one of these people who keep calling for something to happen because eventually you're going to be right, but I don't see how the market can go much lower without the VIX heading higher.
However, with all the turmoil going on right now in the world, and so much stuff not making sense to me I'm going to have to take a break. I have no clue where this market is going to go and I'm not even going to try. All I'll do is turn the swing trend arrow to red and call it a day. Maybe tomorrow will provide some clarity.
Trades
Today I bought 100 shares of Ford (F) at 14.31; it closed at 14.29. My OMEX trade at least did gain a bit today, closing up 6.45%. There should be a lot more buying opportunities when the bottom gets put in.
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