Actionable ideas for the busy trader delivered daily right up front
- Wednesday higher only if ES remains above its pivot, else lower.
- ES pivot 1882.17. Holding above is bullish.
- Next week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: still long at 16,434 .
Last night the futures were telegraphing Tuesday's move from a mile away and we indeed got a nice broad-based rally for our troubles. This changes the chart picture considerably so let's mosey on over and take a gander at which way Wednesday is headed.
The Dow: Way back last Friday, the Dow confirmed Thursday's hammer that just tested its lower BB and on Tuesday we got the payoff in the form of a bib 1.39% gap-up green marubozu. That was enough to just push the indicators all off oversold and nicely confirm a stochastic bullish crossover. And we also got an exit of the latest descending RTC for a bullish setup. What's not to like?
The VIX: Similarly, the VIX confirmed its own recent technical trend by dropping another 5% on Tuesday. That sent its indicators just off of overbought and confirmed a bearish stochastic crossover. So this chart just looks continued lower for Wednesday.
Market index futures: Tonight, all three futures are lower at 12:38 AM EST with ES down 0.16%.It is quite unusual for ES to gap up on the daily chart and yet that's what happened on Tuesday as ES put in a tall green gap-up marubozu to reclaim 1889. That sent all the indicators higher off of oversold with the stochastic in full-on bullish crossover mode. However, the new overnight seems to be equivocating a bit, something that is perhaps to be expected.
ES daily pivot: Tonight the ES daily pivot rises again from 1847.17 to 1882.17. And again ES remains above its new pivot so this indicator continues bullish.
Dollar index: On Tuesday the dollar had a monster day with a moonshot gap-up rocket for nearly one percent stopped only by its 200 day MA. And even that only barely sent the indicators off oversold while completing a bullish stochastic crossover. Look for a retest of the 200 MA on Wednesday.
Euro: And similarly, the euro came to a definitive end of its two week-long rising RTC on Tuesday with a big dump all the way back to 1.11515 to exit the rising RTC for a bearish crossover. That also sent the indicators continuing lower towards oversold. There's nothing bullish about this chart and in fact the new overnight is continuing lower making me think the euro closes lower on Wednesday.
Transportation: The trans were pretty much the same story as the Dow on Tuesday so everything I wrote there applies here too.
Month right wrong no call conditional batting Dow
January 9 5 5 0 0.643 1433
February 6 1 3 1 0.875 685
And the winner is...
There are really no bearish signs on any of the charts tonight. However, the market has run hard for two days in a row now, and that's as long a winning streak as we've had all year so far. And it's pretty common to take a pause after large moves like this. Still, in the absence of any negative technicals, I hesitate to come right out with a bearish call. So with ES now in close proximity to its new pivot, it seems like a good time for another conditional call: if ES can remain above its new pivot by mid-morning Wednesday, we'll close higher. But if it falls through, we close lower.
YM Futures Trader
Nothing new again here