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- Friday lower.
- ES pivot 2294.33. Holding below is bearish..
- Next week bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
Last night I was a bit worried about calling Thursday higher because often record-breaking rise are followed by greater or lesser pullbacks. And in fact on Thursday both the Nasdaq and SPX took minor losses. But my call is for the Dow and that managed to gain another 32 points so that counts as correct. Still, with all three major averages ow overbought it's hard to keep from thinking that maybe the recent rally into record territory has taken its toll and that we're now ready for a pullback or at least a breather. Let's see what the charts have to say about this as we look ahead to Friday and round out the last full week of January.
The VIX: Last night I observed that "I'm looking for a move higher in the next few days" in the VIX. And on Thursday it fell again but this time only a scant 1.69% and on a classic gravestone doji at that. With the VIX now in the 10's, five down in a row now, nearly oversold and with two reversal candles in a row, it can't be long before we see a move higher, possibly as soon as Friday. Just look at the chart and tell me if you don't agree.
Market index futures: Tonight, all three futures are slightly lower at 12:20 AM EST with ES down 0.07%.
ES daily pivot: Tonight the ES daily pivot rises again from 2288.00 to 2294.33. That's enough to put ES back below its new pivot so this indicator now turns bearish.
January 7 2 7 1 0.800 358
And the winner is...
There are record highs just about everywhere you look right now but I get the feeling that the enthusiasm is starting to wane just a bit. The VIX is giving off signs it's getting ready for a move higher, the Dow and the trans are both now overbought and up against their upper BB's, the TLT is oversold with a green hammer, and copper has already topped. The futures are also sagging a bit in the overnight, something we haven't seen for several days now. Ad ES seems to be confirming a classic doji star from Thursday.
Now none of this is guaranteed bearish but it's sure looking less optimistic than the last two nights. So I'm going to go out on a limb and call Friday lower.
That's all she wrote. See you again Sunday night.
YM Futures Trader
No trade tonight.