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- Friday lower.
- ES pivot 2160.58. Holding below is bearish..
- Next week bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: short at 17,670.
Huh - it figures. Right after I threw in the towel and gave up on volatility, the very next day the Dow has a non-trivial loss of 78 points and the VIX gets up off the floor for an 8.24% gain. Does this mean that the market is ready to get back into gear? Let's check the charts.
The VIX: After four down in a row, and 13 down of the past 16, the VIX finally had a decent up day. And that was enough to send RSI shooting up from 0.55 to 35 in just one day. It also jsut squeaked out a bullish setup on an exit of a long-running descending RTC.
Market index futures: Tonight, all three futures are slightly lower at 12:23 AM EDT with ES down 0.02%. On Thursday ES completely retraced Wednesday's gains plus a bit for a bearish engulfing pattern. Indicators continue falling off extreme overbought levels so the overall impression here is negative.
ES daily pivot: Tonight the ES daily pivot falls from 2164.17 to 2160.58. That now puts ES below its new pivot so this indicator turns bearish.
Dollar index: After a big gap up on Tuesday the dolalr completed a nice bearish evening star on Thursday. With indicators still overbought and a stochastic about to form a bearish crossover, this one looks lower on Friday.
Euro: On Thursday the euro confirmed Wednesday's spinning top with a long-legged doji as a bullish harami. And the new overnight is continuing higher to give us a new bullish stochastic crossover. With indicators still oversold, this one seems to be ready to move higher again on Friday
Transportation: After four days of indecision following their own rising RTC exit, the trans finally rolled over on Thursday, gapping down 1.30%, their biggest loss since June 27th. That's now got all the indicators falling off overbought and a nicely completed bearish stochastic crossover so there seems to be more downside on the way here.
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 8 5 7 1 0.643 1393
July 3 4 4 2 0.556 -258
And the winner is...
It looks like the market has roused itself from its recent torpor and finally started to acknowledge its overbought internals, something I was starting to wonder about. With the VIX also on the move higher, the trans falling, an evening star in the Dow and OBV showing its first decline since July 7th, I think we have enough signs now to call Friday lower. I'm a bit nervous about it, having been burned on the short side lately but all I can do is call 'em like I see 'em.
That's all she wrote. See you again Sunday night!
YM Futures Trader
No trade tonight.