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- Thursday depends on ES pivot.
- ES pivot 2260.67. Holding below is bearish.
- Friday bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
RecapI called Wednesday uncertain because I always call Fed days as uncertain. There's never any complete certainty about what the Fed will do or say and there's even less certainty about how Mr. Market will take the news. And it's fairly common for the news to trump the technicals. In this particular case, after the widely expected rate hike, turns out he didn't like it at all with the Dow dropping 119 to snap a six day winning streak with its biggest loss in a month and a half.
The technicals
The VIX: Tuesday's inverted hammer did not pan out on Wednesday as the VIX reacted mostly to the Fed news. The gain was relatively muted though, up only 3.61% Still we're in a new rising RTC and all the indicators are also rising - though nowhere near overbought yet. That now leaves open the possibility of more upside here on Thursday.
Market index futures: Tonight, all three futures are higher at 12:29 AM EST with ES up 0.14%.
ES daily pivot: Tonight the ES daily pivot rises again from 2268.25 to 2260.67. ES made a brief attempt to rise above its new pivot right after midnight but failed, though it's still pretty close. So that still leaves this indicator bearish , ever so slightly.
Accuracy:
average points
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 3 0.636 463
December 3 2 4 0 0.600 -34
And the winner is...
Wednesday's action definitely took a bit of steam out of the market, dropping the Dow out of a six-day rising RTC for a bearish setup while starting all the indicators lower. But the VIX is waffling a bit, not moving decisively higher on Wednesday and there's no pin action in the overnight futures. It's possible Wednesday's drop was overdone and we could get a bounce on Thursday. Still the technicals are looking more bearish than anything else. But with the proximity of ES to its new pivot this seems like a good time to make a conditional call: if ES break above its new pivot by mid-morning Thursday, well close higher But if it remains below it by then, we close lower. So sez I.
YM Futures Trader
No trade tonight.
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