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- Wednesday depends on ES pivot.
- ES pivot 2203.17. Breaking above is bullish, below below is bearish...
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
The Dow put the lie to my call for a lower close Tuesday as it recovered from an early dip to end the day 24 points higher - so at least the damage was limited. United Health was really the big driver of this outcome with an outsized 3.6% gain of its own. We now move along to Wednesday s we close out what has been the best month since March.
The VIX: Ah yes, I did note last night a gap-up hanging an on the VIX but discounted the bullish implications of that for the market. Turns out, this was, as the VIX nearly always is, a good predictor. Tonight, after a 1.90% drop on Tuesday we are left with a classic bearish evening star. The only thing here is that Tuesday's candle is a big spinning top leaving the door open to some possible upside on Wednesday. Which do you believe - the daily candle or the three-day pattern? Hmmm.
Market index futures: Tonight, all three futures are lower at 12:23 AM EST with ES down 0.05%.
ES daily pivot: Tonight the ES daily pivot is nearly unchanged, nudging from 2202.83 to 2203.17. For the second time in a week, that leaves ES sitting right on top of its new pivot, so this indicator is neither bullish nor bearish.
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 5 6 6 2 0.539 -304
August 1 3 8 0 0.250 120
September 4 5 6 0 0.444 -59
October 10 3 4 1 0.786 314
October 10 3 4 1 0.786 314
November 4 4 5 2 0.600 463
And the winner is...
Well maybe the Dow rose but at least something fell on Tuesday and it was the trans, off 0.21% for a bit of bearish divergence. And remaining overbought it looks like there's still more downside to come here. I note too that the dollar took a big dump on Tuesday after rising steadily almost the entire month of November. Dr. Copper meanwhile also moved lower Tuesday as I predicted even if that didn't affect the Dow. And with a bearish stochastic crossover in place it looks like that's not done going lower yet either. So the net impression is weakly bearish.
But with the futures only very slightly lower tonight and ES sitting right on its new pivot, it's a good time for another conditional call: if ES breaks above its new pivot and remains there by mid-morning Wednesday, we'll close higher. But if it breaks lower, we close lower.
YM Futures Trader
No trade tonight.