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- Wednesday higher - low confidence.
- ES pivot 1367.42. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias down.
- ES Fantasy Trader goes long at 1376.00.
Last night wasn't at all clear to me. I thought we might form some kind of star today but as it turns out the Dow simply gave us a nice 74 point gain. I hoped to get some greater clarity in the markets and I think today provided some. Read on...
The Dow: Today's gain retraced most of yesterday's loss. It also turned both money flow and momentum positive. And the stochastic is now giving a hint at forming a bullish crossover, though not there just yet. That said we remain inside a five day declining RTC. Still, there's a few positive signs on this chart.
The VIX: Today the VIX lost 4.59% on a bearish two crows pattern. Indicators continue to decline supporting this idea. And of course that would be good for stocks.
Market index futures: Tonight all three futures are in the green with ES leading the way higher at :32 AM EDT, up 0.4% which is pretty good for this time of night. In fact the developing green candle is almost as big as today's completed one. On the indicator side, money flow continues to rise for the fifth straight day, OBV is now rising from a low level, and the stochastic just barely squeaked out a bullish crossover. While a continued advance Wednesday is not guaranteed, I'd say from this chart it's more likely than a decline.
ES daily pivot: Tonight the pivot rises from 1363.83 to 1367.42. With ES pretty much flat in the overnight so far, we were above the pivot before and we're still above by a comfortable margin, all in all a positive sign.
Dollar index: Today the dollar continued its wayward ways giving up all of yesterday's gains gapping down to form a hammer virtually identical to the one we saw Friday. The indicators are similarly confused. If I had to guess, I'd say the dollar's going higher tomorrow just because it's now at the lower end of its recent trading range, but that's a pretty weak argument. There's not really much to tell from this chart once again.
Transportation: Today the $TRAN delivered a decent 1.17% gain that confirmed yesterday's hammer, with a bonus bullish engulfing pattern. This caused the indicators to hook back up - it's all looking pretty favorable right now.
History: According to The Stock Traders Almanac, Wednesday historically has no particular edge..
Month right wrong no callApril 6 6 2
And the winner is...
It's still far from a slam-dunk, but I'm a bit more comfortable tonight calling for a higher close Wednesday. There's an interesting pattern in the Dow lately of two up days following each big down day. If that continues, we should see another up day on Wednesday.
ES Fantasy Trader
Portfolio stats: because we did not trade last night the account remains at $138,625, after 32 trades (25 wins, 7 losses) starting from $100,000 on 1/1 Tonight we are going long at 1376.0.. Reminder - you can now follow these entries and exits live on Twitter @nightowltrader. And let me note that I always buy on the ask and sell on the bid to make things more fair. This way there's no question that the trade would have executed for real.