Actionable ideas for the busy trader delivered daily right up front
- Wednesday lower, medium confidence
- ES pivot 1196.25. Holding under is bearish.
- Rest of week bias uncertain, oversold rally not done..
- Monthly outlook: bias down, on politics and technicals.
- ES Fantasy Trader stuck long..
We opened up today as I expected last night, then see-sawed the rest of the session to finish up 33 points. With no bad numors out of Europe today, the bears couldn't find an excuse to knock 'em down.
Tonight we're going to run the abridged edition of the Usual Suspects again and likely will continue as long as Europe continues to be running our show.
The technicals
The Dow: Today's small gain formed an inverted hammer and after yesterday's big advance that equals a shooting start. That's a reversal indicator, though not a particularly powerful one. Still it's worth paying attention to this. The indecisive intraday zig-zag action gave the distinct impression of a market about to turn, especially considering the decreased volume today compared to Monday..
The VIX: Dropped 4.64% today to close just about its recent support at 30. The last time it did this under similar chart conditions it popped higher the next day. It could still go either way but I wouldn't be surprised to see it go higher on Wednesday.
VIX futures: I mentioned last night that the futures looked to be headed lower and they did just that today. Tomorrow's direction is less clear. We're still in the middle of the BB's and just at a support point.
Market index futures: All three are down tonight at 1:30 AM EDT. ES is off a not insignificant 0.8%. The overnight candle is forming a pattern close to an evening star and that's generally quite bearish. This reinforces the feeling I get from the Dow's daily chart.
ES daily pivot: Now 1196.25 and we're now below it, having been drifting lower since today's close. Another bearish sign.
And the winner is...
Tonight I give it to the bears. I think there' still more room to run up in the next week or so, just not on Wednesday. After two decent days of advances, the market seems to be signaling a timeout. We're due for a bit of profit-taking here. But once again, I have to add the usual disclaimer that anything coming from Europe will move the markets regardless of what the technicals tell us. It's not the best time to be s short-term trader.
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