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- Thursday lower, low confidence.
- ES pivot 1929.67. Holding below is bearish.
- Friday bias uncertain technically.
- Monthly outlook: bias lower.
- ES Fantasy Trader standing aside.
Well I am certainly glad I called Wednesday as uncertain because of the odd way things turned out. While it is certainly tragic for anyone to get shot on the job in Canada, and I don't mean to sound cold about it, but it doesn't seem to warrant a nearly full percent drop in the Dow. Or blame it on AT&T earnings but Mr. Market sure seems to be be a nervous Nellie. Will he find his Valium stash in time for Thursday? Let's check it out, as they say down at the public library.
The Dow: It wasn't quite the doji I envisioned, but the Dow was indeed unable to press forward on Wednesday and after breaking above its 200 day MA Tuesday it just folded with a big bearish dark cloud cover to collapse right back below it. That was also good for a rising RTC bearish setup. even though we're still not quite yet overbought. Either way, this one no longer looks bullish..
The VIX: It didn' take much to spook Mr. Market with the VIX jumping 11.13% Tuesday just as it seemed ready to visit its 200 day MA. The resulting bullish engulfing candle now makes this chart look bullish. Oh and a bullish exit of a descending RTC too..
Market index futures: Tonight the futures are mixed at 12:20 AM EDT with ES up 0.04% but NQ down 0.03%. ES put in a dark cloud coverish affair on Wednesday with overbought indicators and its stochastic is now curving around preparing for a bearish crossover. Wednesday felt like it took the wind out of ES's sails though we do remain in a rising RTC for now at least.
ES daily pivot: Tonight the ES daily pivot ticks up from 1921.17 to 1929.67. We've now crossed under the new pivot so this indicator turns bearish.
Dollar index: Big gap-up breakout here on Wednesday right up to resistance. But with indicators not yet overbought, more upside possible.
Euro: Last night I wrote that the euro "looks lower Wednesday" and so it was, falling back to 1.2648, in a month-long congestion zone. But with indicators still not yet oversold and no reversal candle, more lower here still possible.
Transportation: Tuesday's resistance was the key to Wednesday's trans as they sank over 2%. Also hit oversold, also exited the rising RTC for a bearish setup, also the stochastic is now near s bearish crossover, all of which makes this chart now suddenly look negative.
And the winner is...
This is a difficult call because it's hard to tell how much of Wednesday's decline was technical and how much was knee-jerk news reaction. I guess in the absence of any better information, I'm just going to have to once again go out on a limb and call Thursday lower. I'll be happy to be proven wrong.
ES Fantasy Trader
Portfolio stats: the account remains at $121,625 after nine trades in 2014, starting with $100,000. We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push. Tonight we stand aside.