The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Wednesday higher.
- ES pivot 2263.50. Holding above is bullish..
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
It's always taking a chance calling the market after three days off but the overall bearish impression we got Monday night proved correct as the Dow fell 59 points on Tuesday on a tall red spinning top that just touched its lower BB intraday. It wasn't a really satisfying break lower though since we're still sort of clinging to the bottom of the recent two week trading range. Still with three down days in a row we can now officially declare a downtrend. So op-ex week rolls on and we look to the charts for some clues as to Wednesday's direction.
And it's now Obamend minus two and counting ... The champagne is already on ice.
The technicals
The VIX: Persistence paid off on Tuesday as we finally got the pop I'd been looking for with the VIX up 5.7%, though it was on an admittedly unsatisfying gap-up red inverted hammer. It was enough to take us off oversold but this is looking more like an evening star in the making than the start of a VIX rally. Take a look at the chart and see if you don't agree.
Market index futures: Tuesday night, all three futures were higher at 12:49 AM EST with ES up 0.25%.
ES daily pivot: Tuesday the ES daily pivot fell from 2263.58 to 2263.50. That puts ES right back above its new pivot so this indicator now changes back to bullish.
After a bullish piercing pattern on Tuesday, the new overnight in ES is putting in a second one and it now up about as much as it was down at this hour Monday night. And as I mentioned above, I don't find Tuesday's gain in the VIX particularly convincing. The trans though admittedly does look bearish with a fresh bearish stochastic crossover. But the iShares 20+ Year Treasury Bond (NASDAQ:TLT) put in a gap-up hanging man Tuesday so overall I'm going to take another chance and call Wednesday higher.
YM Futures Trader
No trade tonight.