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- Wednesday lower.
- ES pivot 2089.67. Holding below is bearish
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ may go lower still.
Looks like my conditional call worked well on Tuesday. After noodling about its pivot for most of the overnight hours, ES broke lower at 8:55 AM and made one failed attempt to get back above at 10:10 AM. And that was that. the market spent the rest of the day moving mostly lower. So with that decided, let's continue on to Wednesday.
The Dow: Monday's inverted hammer was confirmed on Tuesday with 105 point dump. But even that still left us inside the rising RTC though we did get that bearish stochastic I mentioned last night. So with the indicators all nearly oversold there seems to be more downside risk than upside potential here.
The VIX: Last night I wrote about the VIX, "this one looks higher again on Tuesday." And indeed it was, up 1.57%. And it was a second hammer in a row, plus it exited the descending RTC for a bullish setup. Along with oversold indicators, that all adds up to a move higher on Wednesday.
Market index futures: Tonight, all three futures are modestly lower at 12: AM EDT with ES down 0.07%. On Tuesday ES confirmed Monday's inverted hammer with a red candle that sent the indicators lower and completed the bearish stochastic crossover. With a drift lower in the overnight we're now just falling out of the rising RTC for a bearish setup. In general this chart looks bearish to me right now.
ES daily pivot: Tonight the ES daily pivot falls again from 2098.33 to 2089.67. We remain below the new pivot so this indicator continues bearish.
Dollar index: While the dollar remains in a descending RTC it finally managed a gain on Tuesday and a bullish piercing pattern at that. With indicators now fairly oversold and a stochastic that is curving around for a bullish crossover I'd say the dollar is getting ready to move higher. Maybe not Wednesday but before the end of the week for sure.
Euro: Similarly, the euro put in a red spinning top on Tuesday that caused the indicators to peak at overbought. The stochastic is flattening out so this all looks like we;re getting ready for a move lower on Wednesday.
Transportation: Last night I wrote that this chart "does not look good for Tuesday.". And so it wasn't, with the trans down another 0.67% on a small red marubozu. That finally sent the indicators off overbought but we still have a ways to go before the lower BB or recent support So with a bearish RTC trigger there's just nothing bullish about this chart tonight.
January 8 6 4 1 0.563 627
February 6 4 5 3 0.692 183 March 3 6 4 4 0.538 34
And the winner is...
Hmm - things seem to be lining up pretty uniformly bearish side tonight so I'm going to have to call Wednesday lower.
Single Stock Trader
Last night I said VZ was looking toppy and indeed it fell 0.46% on Tuesday but the indicators are still overbought so I think there's still more downside to come.