The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Thursday uncertain.
- ES pivot 2051.92. Holding above is bullish.
- Friday bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
Recap
Generally speaking, I figure that Fed Minutes days aren't worth bothering about but I began to have my doubts after Wednesday's minutes came out and Mr. Market had a snit. Fortunately, he thought better of it and a late-afternoon rally saved my call for a higher close. But that leaves the market continuing to be unable to put together more than two in a row for over two weeks now. With all this up/down/up, where is Thursday headed? We can only ask the charts for answers.
The technicals
The Dow: On Wednesday the Dow recouped all its losses to end exactly where it began Tuesday. This neatly arrested an incipient downtrend but leaves us needing confirmation for the next move for we are essentially now back to where we were Monday night.
The VIX: Last night I was considering the VIX to be an evening star in the making and that was essentially confirmed on Wednesday. It wasn't a classic gap-down but the 8.63% loss on a tall red marubozu has the same effect. That leaves the VIX right back where it ended Monday just like the Dow.
Market index futures: Tonight, all three futures are slightly lower at 1:08AM EDT with ES down 0.06%. On Wednesday ES gave us an inverted bullish piercing pattern back to 2060.25. The last time we saw this was February 12th and the next day was higher, though we were considerably oversold then and right now ES is just off of overbought. I am more concerned with the failure to break resistance at 2068 over the last week. The move lower overnight seems to suggest that there's no big rally coming on Thursday.
ES daily pivot: Tonight the ES daily pivot rises from 2042.83 to 2051.92. That still leaves ES above its new pivot so this indicator continues bullish.
Dollar index: On Wednesday the dollar gave it up with a big red bearish engulfing pattern for a 0.21% loss. That leaves indicators highly oversold but with the dollar right on week-long support I question how much more downside is available here.
Euro: Meanwhile the euro continues to remain unable to decide just where the heck it wants to go. Over the last week it has ranged from 1.1349 to 1.1463, all to no effect. Wednesday's close, 1.1427 has been visited on each of the last six days. With a continuing inability to make any head way after a big rally, I'd have to think that the next move is lower - if we ever get out of this congestion zone.
Transportation: In a bit of bearish divergence the trans lost a non-trivial 0.24% on Wednesday on a tall red hammer that very nearly touched its lower BB Check it out. That drove the indicators all oversold and flattened out the stochastic in preparation for a bullish crossover. So now we have to ask - does the bearish divergence cancel out the bullish candle? Well ya got me. I'll be curious to see how this one plays out. (Though I'm guessing the candles will prevail).
The market remains near the top of its recent trading range and continues having trouble breaking out. Indicators remain on the edge of overbought and volume continues to be lackluster, all of which suggests the buyers are sitting on their hands. But there's an absence of outright bearish signs tonight so I can't really call the market lower. I guess all that's left is to call Thursday uncertain.
YM Futures Trader
No trade tonight..