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- Thursday lower.
- ES pivot 2275.92 Holding below is bearish..
- Friday bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
Last night I knew it was risky calling Wednesday higher since I generally avoid calling Fed days. But in this case I thought it was a risk worth taking and I was rewarded with an admittedly modest 27 point gain in the Dow, perhaps mostly significant for breaking a three day losing streak. So with that excitement out of the way, let's continue on to Thursday and see what the charts might be whispering to us.
The VIX: Last night I wrote of the VIX that "even though it's not yet overbought it sure looks to me like this might be the end of the VIX rally". Well sure enough on Wednesday the VIX gapped down 1.5% on something of a doji star. There's one odd tick at exactly 2 PM when the Fed annoucement came out showing the VIX at an amazing 9.97 but I'm not sure I believe that. 10.97 maybe, but not 9.97. A minute later, it was right back where it had been before. Either way, the VIX was still down on the day but with a doji like this it's hard to claim that there's more downside to come. Just look at this odd candle. Does that look right to you?
Market index futures: Tonight, all three futures are lower at 12:21 AM EST with ES down 0.37%.
ES daily pivot: Tonight the ES daily pivot rises again from 2271.67 to 2275.92. That now leaves ES below its new pivot so this indicator turns back to bearish.
January 10 2 7 1 0.846 595
February 1 0 0 0 1.000 27
And the winner is...
Wednesday's gains were made on a bunch of reversal candles like spinning tops. The Dow in particular gave us a dark cloud cover too. In short, I'm not convinced and I think Wednesday's action may have been an anomaly. And in the overnight, ES has resumed its march lower with a fairly substantial loss. So in the absence of any bullish pin action and with some bearish signs about, I'm just going to call Thursday lower.
YM Futures Trader
No trade tonight.