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- Thursday uncertain.
- ES pivot 2064.75. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: no trade.
Well well well, after a big gain Tuesday we called the market lower on Wednesday and sure enough the Dow tanked 217 points erasing all of Tuesday's gains and then some for its worst loss since February 11th. What a difference a day makes, eh? So let's go to the charts to see exactly what this difference might be as far as Thursday is concerned.
The Dow: After a tall green marubozu on Tuesday the Dow reversed course for a tall red marubozu on Wednesday. That stopped all the indicators in their tracks and sent them moving lower before even nearing overbought. The net result of this big rejection of Tuesday's gains is decidedly negative.
The VIX: Last night I wrote that "Next support is at 13.26 and I expect to see that before any move higher here." Well guess what - the low for the VIX on Wednesday was 13.29. And then it moved higher - for a net gain of 7.75%. The resulting green hammer bounced RSI off over oversold and sent hte stochastic urving around for a bullish crossover as well as exiting a descending RTC for a bullish setup. That all spells more upside for Thursday in my book.
Market index futures: Tonight, all three futures are higher at 12:42 AM EDT with ES up 0.16%. ES fell back to 2058 on Wednesday, a loss decidedly less bad than either the Dow or the trans. That throws a real monkey wrench into the mix with indicators stuck halfway between oversold and overbought. The new overnight is staging a bit of a rally at this point but that could end up just being a DCB.
ES daily pivot: Tonight the ES daily pivot falls back from 2068.42 to 2064.75. ES.is now below its new pivot so this indicator turns bearish.
Dollar index: Last night I was reluctant to call the dollar lower on Wednesday which is a shame because it gapped down a big 0.51% to fall right out of its latest rising RTC for a bearish setup, stopping the indicators at overbought and also just forming a bearish stochatic crossover. That all leaves this chart looking lower for Thursday.
Euro: And just invert all of that for the euro which had its best day in two weeks on Wednesday bouncing out of a descending RTC for a bullish setup. With indicators still oversold that leaves this chart looking higher on Thursday.
Transportation: After busting through their 200 day MA in a blaze of glory on Tuesday, the trans came crashing right back down through the same MA leaving a smoking crater for a big 1.55% loss on Wednesday. That stopped all the indicators in their tracks and curved the stochastic around for a bearish crossover leaving this chart looking decidedly negative.
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 8 6 6 1 0.600 222
April 6 4 8 2 0.667 416
May 4 2 1 1 0.714 433
And the winner is...
Tonight the charts are somewhat unsettled. This is reflected in gains not only in the VIX but in VVIX too. And the fact that the charts are lookiung lower but the fdutures are moving higher in the overnight isn't helping matters. I think that Wednesday's move to the downside was about as overdone as was Tuesday's to the upside. It makes me want to call the market higher but I can't get past the negative charts, particularly the VIX. So I'm going to have to settle for calling Thursday uncertain.
YM Futures Trader
No trade tonight..