Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher.
- ES pivot 1996.33. Holding above is bullish.
- Rest of week bias lower technically.
- Monthly outlook: bias lower.
- YM futures trader: no trade tonight.
On Monday, it mattered not to Mr. Market that we'd run down so far so fast on Friday, he was still in "the sky is falling" mode as the selling continued unabated with the Dow dumping another 261 points to finish just off session lows. More ominously perhaps, the Dow, the SPX, and ES all broke under their 200 day MA's on Monday (and the dollar broke above its own). So with that bit o' news let's see what Tuesday might hold.
The Dow: In addition to the 200 MA cross, on Monday the Dow also fell out of its long rising monthly RTC that defined the current bull market going all the way back to the March 2009 lows. It's also now formed a monthly bearish stochastic crossover. A bearish stochastic crossover is also in full swing on the daily chart so there's really nothing optimistic about this chart at all right now.
The VIX: Adding to the general weirdness lately, this was one of those rare days when the VIX fell along with the rest of the market. At least that confirmed the extraodrinary hanging man I noted last night as the VIX cam ein 7.41% on Monday. That was enought o curve the stochastic around close to a bearish crossover and form something of an evenign star. I'd have to guess there's more downside ahead here.
Market index futures: Tonight, all three futures are higher at 12:23 AM EDT with ES up 0.86%. As I mentioend, ES fell below its 2200 day MA Monday in a move that sent the indicators oversold. But 200 MA crosses sometimes rebound and this may be one of those cases as the new overnight is actually running higher for a change.
ES daily pivot: Tonight the ES daily pivot falls again from 2045.67 to 1996.33. And that, plus a rally in the overnight is finally enough to put ES back above its new pivot so this indicator is now back to bullish
|US dollar ($USDUPX) daily|
Euro: Add the euro to the list of charts that crossed their 200 day MA on Monday as this one gapped down back to 1.10035. Indicators ar enow oversold but the stochastic continues falling. We do owever see a small rally attempt building in the overnight so with Monday's low higher than Friday's, a bottom might be in.
Transportation: The trans really took it on the chin Monday, down a massive 3.10%, doubling the Dow's loss. Move along, nothing bullish to see here.
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 9 3 4 4 0.813 756
June 6 5 6 1 0.636 834
And the winner is...
In ordrinary times, I'd be a bit skeptical of an overnight rally in the futures in the face of such an array of bearish charts. But like I said before, these are not ordinary times. ES is putting in a nice bullish piercing pattern at the moment on a non-trivial rally, and the VIX seems to have peaked and is coming back down to earth. I don't know if this is shorts getting nervous and doing some preemptive profit-taking, or bargain hunters deciding the world isn't actually coming to an end after all. Either way, I have a vague suspicion we could be in for at least a one day relief rally so I'm going to go out on a limb and call Tuesday higher.
YM Futures Trader
No trade tonight.