Yesterday I was thinking today would go lower and indeed it did, though admittedly not by much. And the Nasdaq actually managed to go higher, but it often marches to the beat of its own drummer, so I don't really follow it.
Now here's what's odd. It's 1:15 AM EDT right now and all three futures are up. ES is up 0.17%, NQ is up 0.22% and YM is up 0.15%. Why is this odd? Because today the Dow put in a small doji at the top of last Friday's tall green candle. It almost looks like day 2 of an evening star. And the Dow's indicators are all topping at overbought levels.
What's more, I was right about the VIX today too. Remember those two hammers from last week. Well they pounded the VIX higher today, leaving its own indicators looking like they have bottomed. The VIX certainly seems poised to go higher still tomorrow, implying lower stocks. And J-Trader's system is sticking to its guns on its now two day old short call.
Returning to the Dow again, today's close made two days we hit the 12,570 level - a resistance line we tried to break, unsuccessfully, twice in May. And a quick look at the daily dollar chart looks like it's getting ready to go higher tomorrow too, implying lower stocks.
It looks for all the world like this market should be going lower tomorrow. In fact, I even took out a position in SDS today to hedge against that. So I don't get it - with all these warning bells going off, why are the futures higher tonight? I always hate to go against the futures, but right now I have to go with the charts and say tomorrow is looking bearish. It will be most interesting to see how this plays out.
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