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- Wednesday higher.
- ES pivot 1959.08. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
Foo. I sure picked yet another bad day to be wrong some good economic news totally torpedoed the technicals resulting in the market having its best day in a month. Oh well - as Fred Astaire said in Swing Time, you "just pick yourself up, dust yourself off, and start all over again". I always hate starting off the month with a loser but we will endeavor to get back in step and pick Wednesday right.
The Dow: On Tuesday the Dow jumped 2.11% on a tall green marubozu that was stopped only by its upper BB. And even that wasn't enough to send the indicators overbought. That leaves the Dow in a funny sawtooth rising pattern. And the last two times we've hit the upper BB, the next day was lower. Hmmm...
The VIX: Last night I was equivocating over the VIX. Turns out the reversal candle was confirmed as it fell a big 13.87% to come crashing down through its 200 day MA, giving up the 20 handle for17.70. With a tall red marubozu and the lower BB not til 16.87, there's nothing bullish about this chart tonight.
ES daily pivot: Tonight the ES daily pivot rises from 1937.42 to 1959.08. ES remains well above its new pivot so this indicator flips back to bullish.
Dollar index: On Tuesday the dollar totally disconfirmed Monday's wanna-be evening star, instead gaining 0.15% on a lopsided green spinning top. That sent the indicators to extreme overbought but this is a reversal sign that requires confirmation.
Euro: Well at least I got the euro right on Tuesday. It indeed fell some more to close down to 1.08695 after exactly touching its lower BB and bouncing back a bit. That still leaves indicators quite oversold but with the lower BB hit and no further deterioration in the overnight, I think a reversal may be at hand here.
|Light crude oil futures, daily|
Oil: Remember the cup & handle I showed here last night? Well oil gained some more on Tuesday. If this holds, it would constitute a breakout and confirmation of the cup & handle. This is generally a very good bullish pattern.
Month right wrong no call conditional batting Dow
January 9 5 5 0 0.643 1433
February 9 3 5 3 0.800 1133
March 0 1 0 0 0.000 -349
And the winner is...
What a difference a day makes. Tonight there are suddenly essentially no bearish signs on the charts and the futures are holding onto Tuesday's gains. I know I'm going to run the risk of getting whipsawed, but I just can't see how I'd make a bearish case here, so I'm just going to have to call Wednesday higher..
YM Futures Trader
No trade tonight.