Actionable ideas for the busy trader delivered daily right up front
- Thursday higher, low confidence.
- ES pivot 1240.08. Breaking over is bullish.
- Friday bias up, depends entirely on Europe.
- Monthly outlook: bias up on technicals and seasonality.
- ES Fantasy Trader remains long from last Thursday.
Well we seem to be back on track, for now anyway. My idea of filtering out some of the noise seems to have helped and as I expected, the Dow did close lower today by 191 points. So I'm going to continue along these lines tonight, looking more at the forest than the trees to try and figure out which way this market may be hiking.
The technicals
The Dow: Today's close at 11,906 was right at a support level after a very odd session featuring two big cliffs separated by a gentle upslope - all related to Europe i one way or another. There remains a big symmetrical triangle forming, going back to October 28th. I'm still expecting a resolution to the upside within a few days.
The VIX: The VIX popped out of its own triangle, but it was to the upside. This does happen about 25% of the time. The "exit in the same direction as entry" rule isn't perfect. However, today's 7.3% pop came in the form of a hanging man which provides at least some expectation of going lower tomorrow which would be good for stocks.
Market index futures: All three are in the green tonight at 2 AM EST by nearly half a percent. ES has been rising since about 8 PM this evening and looks to be getting primed for a run at the new pivot. Note also that today's low stopped short of recent support around 1225. Catching some traction from 1230 is a good sign. The indicators are also now approaching oversold levels, with the exception of OBV which is running quite high. Overall though, being as we are now at the bottom of the recent trading range and near support, I'd say ES has a better chance of advancing tomorrow.
And the winner is...
The bulls. I'm starting to see various charts moving enough out of the dangerous middle ground to areas from which reversals become more likely. I can't say this is the start of any trend, but I'm feeling better about our chances for tomorrow so I'm going to call Thursday higher.
ES Fantasy Trader
Gosh, this is the trade that wouldn't die. We still continue to hold the long position from last week.. Portfolio stats: the account still remains $173,500 after 35 trades (26 wins, 9 losses) since inception on 8/18 with $100K.
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