Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher.
- ES pivot 2259.25. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
Our positive outlook for Monday last night paid off with an admittedly modest 40 point gain in the Dow, but a win is a win so we'll take it. Still, the Dow has been oscillating between gains and losses for the last five days as it continues to have difficulty mounting an assault on the elusive 20K level. At this late stage in the game the only question remaining is has Santa already delivered all of his presents or are there still a few surprise left in the waning days of 2016? As the clock winds down let's go to the charts and see what we can see.
The technicals
The VIX: Last night I wrote that "it looks like the downtrend isn't over here yet.". And indeed the VIX dropped another 4% on Monday in what is now an accelerating downtrend. The 12 handle is now gone and the lower BB at 11.34 is now in view. That is also some solid multi-month support. But with the current bearish stochastic crossover now in full effect and the indicators still nowhere near oversold it looks like it's still too early to call a reversal here.
Market index futures: Tonight, all three futures are higher at 12:29 AM EST with ES up 0.09%.
ES daily pivot: Tonight the ES daily pivot rises from 2256.25 to 2259.25. ES remains above its new pivot so this indicator continues bullish.
Accuracy:
Month right wrong no call conditional batting Dow
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 4 3 4 1 0.625 -3
And the winner is...
 |
| Dow, daily |
Like the symmetrical triangle I noted i ES last night, there seems to be one developing in the Dow too as we've seen four days in a row of lower highs and matching higher lows. As Bulkowski notes, these tend to perform better in bull markets, and we've seen a very strong entry into this particular triangle. If we get a breakout here, it looks good for another leg up and a run at 20K.
Meanwhile with the VIX continuing to fall and no other bearish signs on the charts tonight I'll just have to once again make a bullish call and vote Tuesday higher.
YM Futures Trader
No trade tonight.
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