Actionable ideas for the busy trader delivered daily right up front
- Thursday lower, low confidence.
- ES pivot 1464.83. Holding below is bearish..
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader remaining short at 1461.25.
Huh - today looked a lot like a rerun of yesterday with the Dow once again taking a dump out the gate and the clawing its way back up as the day went on. Only this time it didn't quite make it back to breakeven, snapping a five session winning streak with a 24 point loss. Is this the top or just a one-off? The charts know the answer and ve haf vays of making them talk.
The technicals (daily)
The Dow: Very odd - call it the March of the Dojis as the Dow put in its fourth hanging man in a row. But Wednesday's was different being the first to turn red and also the first to close outside the rising RTC for a bearish setup. With the indicators still not coming down off overbought, the next logical move here is lower.
The VIX: After a valiant attempt to rally on Tuesday, the VIX sank back into its recent consolidation range on Wednesday. And although we have a bullish RTC trigger, this is clearly the chart that's fallen and can't get up. And don't look to the futures for any help either - they've been falling all month. It's hard to believe that with VXX now sitting at 25.49, it was at a split-adjusted $1904 (!) back in May 2009. I'm not looking for any big spikes in the VIX any time soon.
Market index futures:Tonight all three futures are lower at 1:00 AM EST with ES down by 0.17%. ES continued its recent nervous trading patterns on Wednesday putting in a red spinning top sitting just above Tuesday's doji. The overnight action is forming yet another spinning top, this one lower. This leaves us inside a descending RTC with still overbought indicators. The logical direction for this chart is continued lower.
ES daily pivot: Tonight the pivot inches up from 1463.33 to 1464.83. After spending most of Wednesday above the pivot we dipped below the old number at 10:20 PM and remain below the new one, a bearish sign.
Dollar index:The dollar did move higher as I expected on Wednesday, but did it with a small red spinning top, giving us a reversal warning. However, with the indicators having only recently bottomed at oversold and the stochastic just finishing a bullish crossover, it's premature to call the dollar lower on Thursday. If anything, more upside seems more likely. .
Euro: And the euro seems to support that idea. It put in a red spinning top of its own on Wednesday for a bearish RTC trigger. This is being confirmed in the overnight as the E continues lower, now down to 1.3207. With the indicators still on overbought and a bearish stochastic crossover now complete, more downside is likely here on Thursday.
Transportation:The trans just continue motoring higher, but may be running out of gas, adding just 0.07% today and forming a hanging man. With highly overbought indicators, this is at least a reversal warning though in the absence of an RTC breakdown, I'm not ready to call the trans lower just yet.
Accuracy (daily calls):
And the winner is...
One day seems pretty much like another lately, as a veritable army of dojis soldiers across our charts. The basics from last night remain in place - mildly bearish but no real push in either direction. The one exception is Dr. Copper, who has been moving decidedly lower for five days now. And the SPX Hi-Lo index has been stuck at 100 for an amazingly long nine days now. Add it all up and I have to believe we're closing lower Thursday.
ES Fantasy Trader
Portfolio stats: the account remains at $103,750 after one trade (1 for 1 total, zero for zero longs, 1 for 1 short). Tonight we remain short at 1461.25. Once again, early this morning, we briefly dipped into profit territory, but that can't be helped. I still believe this one is going to work out OK.