The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Tuesday lower.
- ES pivot 1880.67. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: still long at 16,434 .
Recap
Well I'm certainly glad I didn't call Monday higher just because last Friday's charts looked bullish as on Monday the Dow did an about-face and marched right back down 208 points, relinquishing all of Friday's gains and then some. I figured the market might have a tough time extending its gains, but I sure didn't anticipate another triple digit decline.
Now it's time to go to the tape again as the rocky month of January thankfully nears its conclusion.
The technicals
The Dow: Bah - after a promising two day gain, the Dow fell on its face Monday with a 1.29% plop on the opposite of a bullish piercing pattern - what is that, a bearish piercing pattern? Indicators are still well shy of overbought but Monday's ugly action just put the kaibosh on the whole party. Foo.
The VIX: After its biggest gap down in two years last Friday, the VIX bounced back on Monday with an 8.1% bounce and a green hammerish candle. Indicators continue to fall though so that all leaves this chart rather indeterminate tonight.
Market index futures: Tonight, all three futures are lower at 12:17 AM EST with ES down 0.31%. On Monday ES put in a big dark cloud cover that retraced for Friday's gains. That was enough to send all the indicators lower before ever even hitting overbought and start the stochastic narrowing around for a bearish crossover. None of that looks good and the overnight pin action is just plain awful.
ES daily pivot: Tonight the ES daily pivot drops back from 1885.75 to 1880.67. But that leaves ES considerably below its new pivot so this indicator now turns bearish.
Dollar index: After its recet visits to the upper BB the past two days, on Monday the dollar gave it up with a quarter percent drop that nevertheless still left the indicators just overbought. There's not much to go on with this small spinning top. My guess is that the selling's not done yet.
Euro: After a big drop Friday last night I called the euro higher for Monday and whadaya know about that - it bounced right back up to 1.0849. That sent all the indicators moving higher before ever hitting oversold and also sent the stochastic around in preparation for a bullish crossover. So my money's on a further gain Tuesday for the euro, a thesis that is supported by further gains in the new overnight.
Transportation: And finally on Monday the trans badly underperformed the Dow to confirm Friday's inverted hammer and complete a bearish evening star of sorts. Indicators are now confused between oversold and overbought but the general impression here is distinctly bearish.
The general tenor of the charts tonight is fairly bearish, so Bullwinkle and I call Tuesday lower.
YM Futures Trader
Nothing new again here.