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- Thursday uncertain.
- ES pivot 1761.83. Holding below is bearish.
- Friday bias lower technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside
Interesting - the Fed spoke on Wednesday, essentially saying nothing new, bu Mr. Market didn't like it anyway, with the Dow finishing the day down 62. At least with that uncertainty resolved, we can get back to the technicals for Thursday.
The technicals (daily)
The Dow: Despite a late afternoon recovery of sorts, the Dow ended Wednesday with what is basically a dark cloud cover and a bearish stochastic crossover as resistance at the September records proved too much. That also puts the double bottom thesis in doubt. So right now, the general tenor of this chart has turned bearish.
The VIX: The VIX remains stuck in a narrow range centered about 14 for nine days now. It put in an unusual gravestone doji on Wednesday in which an attempt to rally was stymied by the 200 day MA. That took the indicators overbought and moved the stochastic into position for a bearish crossover so I'd say this one's going lower.
Market index futures: Tonight all three futures are lower at 112:41 AM EDT with ES down by 0.36%. Wednesday's candle was mostly dark cloud cover and it took us right to the edge of the rising RTC. The overnight is now trading outside for a bearish setup. With indicators continuing to move lower off extreme overbought, this chart now looks officially bearish.
ES daily pivot: Tonight the pivot dips from 1763.58 to 1761.83. We were below from the Fed announcement on and remain below the new pivot so this indicator is now clearly bearish.
Dollar index: On Tuesday the dollar posted a gain that was a bullish RTC trigger and on Wednesday we got the payoff in the form of a 0.21% gain that just took the indicators off oversold and started a new rising RTC.. So more upside looks likely.
Euro: The euro's recent uptrend is now officially over as the currency closed down for the third day running on Wednesday. And the overnight is running even lower, off another 0.13%. Indicators still have room to run to oversold so this chart looks continued bearish, which squares with my bullish dollar call (I look at these two charts completely independently).
Transportation: The trans is also stuck behind resistance like the Dow, here at 7055, giving up 0.61% on Wednesday. That was enough to drop it out of its rising RTC for a bearish setup and start moving the indicators off overbought. So this chart too is now looking bearish.
Accuracy (daily calls):
Month right wrong no call conditional batting Dow
January 5 7 6 3 0.533 -101
February 3 4 5 6 0.692 131
March 5 7 5 2 0.500 121
April 7 5 5 3 0.667 328
May 3 4 6 4 0.636 85
June 6 5 6 0 0.545 543
July 10 2 4 4 0.875 486
August 11 3 6 2 0.813 687
September 8 3 3 3 0.800 485
October 6 5 8 2 0.615 601
And the winner is...
We're had quite a run these past three weeks and the market has been overdue for a pullback of some sort. With all the technicals looking bearish tonight, it looks like we may be starting that process, so the logical call is for Thursday lower.
ES Fantasy Trader
Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17 total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13. Tonight we stand aside.again.