The Hoot
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- Thursday uncertain.
- ES pivot 2069.00. Holding above is bullish.
- Friday bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
On Wednesday the market finally managed to string together two up in a row and did so in style with a 187 point pop in the Dow on a tall green marubozu that closed above its upper BB. So let's see how that changes the picture as we near op-ex Friday.
The technicals
The Dow: The Dow handily cleared resistance at 17,087 Wednesday stopping just short of six month resistance at 17,929. With two white soldiers, a completed bullish stochastic crossover, and all rising indicators, I can't find anything bearish about this chart.
The VIX: Much was made on CNBC Wednesday about the VIX giving up the 14 handle on Wednesday, but we've seen this number six times in the past two weeks. I think of more import is the eight month support at 11.84. Meanwhile we have a completed bearish stochastic crossover and falling indicators off a gap-down red candle. Nothing bullish here.
Market index futures: Tonight, all three futures are lower at 12:25 AM EDT with ES down 0.12%. ES also had a great day on Wednesday, blasting through resistance at 2066 to end at 2076 above its upper BB at 2074. Indicators continue rising but are not yet overbought so there's not really anything bearish here tonight. Except that there's no real pin action in the overnight and the fact that ES pretty much never continues higher after touching its upper BB (at least this contract hasn't).
ES daily pivot: Tonight the ES daily pivot rises from 2047.83 to 2069.00. That still leaves ES above its new pivot so this indicator continues bullish.
Dollar index: After bunches of failed reversal warnings, the dollar finally paid off on Wednesday with a 0.87% gap up fat hanging man that sent the indicators all rising to just off oversold. So nothing bearish here either
Euro: Last night I noted a nine-day congestion zone in the euro. Well on Wednesday it finally gave up the ghost, diving right back to 1.13035 in a definitive break lower. That sent all the indicators to oversold while the stochastic continues its bearish crossover lower. While there's no bullish signs here right now, after such a big one day move, I'd expect a pause of sorts on Thursday.
Transportation: Last night I wrote that "it's looking good for the trans to take another shot at 7796 on Wednesday.". Well that was nearly where they opened as they continued rocketing up through their 200 day MA to end at 7961 on a tall green gap-up marubozu. With a completed bullish stochastic crossover here too and all the indicators rising off oversold, there's just nothing bearish here tonight.
There's nothing particularly bearish about any of the charts tonight. But we've had a pretty decent two days here and without some support form the overnight futures, I don't feel really good about calling for a third day in a row higher. On the other hand, futures off 0.12% aren't really enough to call the market lower, so I guess all that leaves is Thursday uncertain.
YM Futures Trader
No trade tonight..