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- Friday uncertain.
- ES pivot 2260.83. Holding above is bullish..
- Next week bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
So the Dow continues its generally alternating down/up/down action with a 63 point drop on Thursday. The market in general was looking lower to me last night so at least I was right about that. What's mostly notable about Thursday's action was the giant lower shadow of the Dow's candle, which just touched its lower BB resulting in a big hanging man/hammer - you can't really tell since there's no trend in effect at the moment. In any case, we now move on to Friday as we close out the second week of January and look forward to finally getting rid of Obama next week.
The VIX: The VIX finally managed a meager 2.5% gain on Thursday, snapping a seven day losing streak on a tall lopsided doji star. Does this mark the start of a rally> It's hard to say since we've seen this level for five days in a row now. It's more like just another day of wait & see. Overall though I still think the VIX has more upside potential than downside risk from here.
Market index futures: Tonight, all three futures are slightly higher at 12:51 AM EST with ES up 0.09%.
ES daily pivot: Tonight the ES daily pivot falls again from 2175.50 to 2260.83. But that was enough to finally put ES back above its new pivot so this indicator now changes back to bullish.
January 4 2 2 0 0.667 133
Sometimes it pays to back out a bit, in this case to the weekly Dow chart. Here we clearly see the 20K wall that has stymied the Dow for a month now as well as the fact that it's looking quite overbought. And in fact some of the indicators have already begun moving lower: RSI, money flow, OBV, and the stochastic are all headed lower. This is all at least a bit bearish.
I also note what looks like a descending triangle forming in ES and that could lead to a break lower next week.The thing is though that there's still a bit of room to move higher before that happens and ES is in fact a bit higher as I write this. I'm also bothered by that long tail in the Dow (and even more in the SPX for that matter) on Thursday. That doesn't look like classic bearish continuation to me.
So bottom line, this one is too tough for me. That just leaves the call of Friday uncertain. That's all she wrote. See you again Sunday night.
YM Futures Trader
No trade tonight.