Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday lower, medium confidence.
• ES pivot 1260.08, holding under is bearish. 
• Rest of week bias historically higher.
• Monthly outlook: bias up, on technicals.
• ES Fantasy Trader going short at1259.50.

Recap

With a total range of just 36 points to end with a 2 point loss, today was about as quiet a day as you can get, but basically what I expected for this last week of the year sandwiched as it is between two holidays.  Will we see more of the same on Wednesday?  Let's check it out.

The technicals

The Dow: Today's little doji is a potential reversal sign.  And my Fave Five indicators are quite overbought.  The stochastic in fact is now executing a bearish crossover.  I also note that the S&P High-Low Index hit 100 on Friday, generally a sign that a reversal is near.

The VIX: While the VIX gained 5.7% today, it did it on an unusual gap-up red candle.  This may simply be due to the post-holiday lethargy in the market.  While going higher tomorrow is not out of the question, another decline later on in the week is also still on the table.

Market index futures: All three are running in the red at 2 AM EST, with ES down a third of a percent.  This sort of bearish move following today's doji seems to point down for tomorrow.

ES daily pivot: Rose from 1256.58 to 1260.08 tonight.  With ES declining in the overnight, we've now gone below the pivot and that's a bearish sign.

Sentiment: Once again the latest Ticker Sense Blogger Sentiment Poll is out.  Here's how the numbers shake out:

          Bullish Bearish Neutral

Last Week   41%     38%     21%

This Week   46%     21%     33%

Interestingly, while bearish sentiment dropped significantly, bullish sentiment increased very little.  In fact "Neutral" seemed to be the big winner.  Not quite sure just what to make of that.  The fact that some former bears only moved to neutral could be considered contrarian bullish.

     And the winner is...

Speaking of bears, I think we're going lower Wednesday.  We're overbought and it just seems like we're due for a pullback.  Given the lackluster nature of this week, I'm not looking for any big moves, but the bias right now is down.

ES Fantasy Trader

Last night ES was closed so we couldn't enter a new trade.  Tonight we're going short at 1259.50 at  4:46 PM, a bit earlier than usual.

Portfolio stats: the account remains at $127,250 after 46 trades (30 wins, 16 losses) since inception on 8/18 with $100K. Reminder: the portfolio will reset to $100K cash on January 1st, to make year-over-year comparisons easier.