Actionable ideas for the busy trader delivered daily right up front
- Thursday lower.
- ES pivot 2265.75. Holding below is bearish..
- Friday bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
Wow - what a roller coaster ride the Dow took on Wednesday. We we up, then we were down, then up and down and finally up to finish with a 99 point gain. Of course a lot of this had to do with Trump's news conference but I'm sure glad anyway that last night I decided to call Wednesday uncertain. And yet after all that excitement, the 20K handle still eludes us, even intraday.
So far, all we've got is that the First Five Days of January indicator is a success, with the market still higher than it opened the year, and that's a good sign for the rest of the year. But what about Thursday. Well let's have a gander at it.
The VIX: I've been saying for several days now that the VIX looked ready to move higher. Well wouldn't you know, on Wednesday it dropped another 2% to make it seven down in a row, quite the losing streak. At 11.26 we're now hard on multi year-long support. In fact one has to go back to July 2014 to find the last time the VIX was at these levels. Only back then the VIX was sitting on its monthly lower BB. Now that level is at 7.85 and that hasn't been seen since May 2013. The whole point is that the VIX remains incredibly oversold. Even in the heady pre-crash days of 2007 we were at 10.25, not much lower than now. So I still have to believe the VIX is going higher. When? Uh, well, sooner than later.
Market index futures: Tonight, all three futures are lower at 1:05 AM EST with ES down 0.25%.
ES daily pivot: Tonight the ES daily pivot somewhat amazingly remains absolutely unchanged at 2265.75. I don't think I've ever seen the new pivot be the same as the old. In any event, ES remains below the new pivot so this indicator continues bearish.
Month right wrong no call conditional batting Dow
January 3 2 2 0 0.600 70
And the winner is...
With the Dow now right back up to the top of its two week-long trading range, the VIX still looking more likely to go higher than lower and the futures guiding lower in the overnight, I'm going to go out on a limb and call Thursday lower.
YM Futures Trader
No trade tonight.