The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Wednesday uncertain.
- ES pivot 2130.67. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: short at 17,670.
As I noted lat night, it was a bit of a risk, though not a major one to call Tuesday higher. And that's just what happened with the Dow rocketing up out of the gate for a triple digit gain and then retracing almost half of it to end the day 76 points in the green. We now move on to Wednesday as op-ex week and the spooky month of October roll on.
The technicals
The VIX: Last night I was quite bearish on the VIX and sure enough, down it went on Tuesday, off almost 6% on a gap-down move that confirmed a bearish stochastic crossover and sent the indicators all moving lower, those still just overbought. Note too how the rising RTC exit (parallel rising blue, black, and red lines) was a bearish sign. Check it out. And I think there's still more downside available here.
Market index futures: Tonight, all three futures are higher at 12:23 AM EDT with ES up 0.14%. After four reversal candles in a row last week that never really reversed, on Tuesday we finally caught a break with a decent green candle that didn't give it all back into the close. ES remains oversold and this bullish engulfing candle is being confirmed (so far at least) in the new overnight.
ES daily pivot: Tonight the ES daily pivot rises from 2123.25 to 2130.67. ES remains above its new pivot so this indicator continues bullish.
Accuracy:
The tall nearly inverted hammer in the Dow on Tuesday is not particularly bullish, but the VIX came in nicely and seems to have more downside left. On the other hand, the Trans did not participate in Tuesday's rally and oil is quite undecided at the moment. We've also got some economic news on oil, housing and the ever exciting Beige Book on Wednesday. The overnight futures are running positive but not overwhelmingly so. Overall then, I think that the safest course of action is to simply call Wednesday uncertain and let it go at that. There's no law against stepping away from the table every now and then.
YM Futures Trader
No trade tonight.