Last night I wasn't quite sure how today would go, though I was feeling a bit negative about things. Well we were actually up a good part of the day until Uncle Ben came to my rescue by tanking the market with his speech this afternoon. Thanks, pal - you helped me improve my record for the week so far to 2 out of 3.
In a way, he made my job easier for tomorrow though. Today's Dow candle ended up forming basically a bearish dark cloud cover. The bullish trigger I was looking for out of the May 2nd descending RTC did not occur, so we remain in that downtrend, just. Today's 80 point drop also caused the RSI and momentum to put in an overbought top.
Meanwhile, the VIX put in a second hammer today. It's 18.52 close left it just under its 200 day MA at 18.79 and its daily pivot at 18.68. And its indicators inched closed to showing oversold. It's looking like the VIX would rather go higher tomorrow than lower, a bearish sign for stocks.
Looking at oil next, it appears to have put in a daily bottom yesterday and could move higher tomorrow. That's also bearish for stocks since oil is now back in an inverse correlation with the markets.
Turning to the futures, they're all lower by about a third of a percent at 1:30 AM EDT. Tomorrow's ES daily pivot is 1284.33, virtually the same as today, and we're already well below that at 1275.25. We won't go higher unless we can break above this level.
Put it all together and what do you get? Looking for lower once again.
The weekly charts, on the other hand are a different matter. I think we're pretty safe from hitting any 200 MA's this week. The Dow weekly chart right now is looking extremely oversold. We'll take another look as this week's candle fills in.
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