Actionable ideas for the busy trader delivered daily right up front
- Friday higher only if ES stays above its pivot, else lower.
- ES pivot 2041.00. Breaking above is bullish.
- Next week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade.
Last night I expressed some doubts about the ability of the market to move higher on Thursday but couldn't call it lower because of the candle situation. Turns out Mr. Market was indeed unable to push any higher, with the Dow falling 174 points. At least this gave us some clarity so let's go to the charts as always and see where Friday's going to wind up the first week of April.
The Dow: Those two odd parallel lines on last night's chart resolved to the downside on Thursday with a nearly one percent decline to clearly break out of a rising RTC for a bearish trigger. The indicators are all now finally clearly moving lower off of overbought and the stochastic is also i full-on bearish crossover mode. So this chart now has a clear direction lower.
The VIX: Same deal with the VIX - after Wednesday's big drop, you'd think it was poised to go lower on Thursday. But instead it gained nearly 15% to send all the indicators moving towards overbought with a completed bullish stochastic crossover. This chart now looks bullish.
Market index futures: Tonight, all three futures are higher at 12:25 AM EDT with ES up 0.29%. On Thursday, ES just missed forming a rare bullish stick sandwich by breaking Tuesday's close of 2038.75 to end at 2035. And indicators, though continuing to fall are not yet down to oversold. Next support is 2027 and I'd not be surprised to see ES touch that on Friday.
ES daily pivot: Tonight the ES daily pivot falls from 2051.92 to 2041.00. ES begin gearing up for an attack on it with a rally just before midnight and just broke through it as I write this thus turning this indicator bullish.
Dollar index: The best that can be said for the dollar on Thursday is that week-long support held nicely and we ended with a 0.07% gain. The candle was a small red spinning top but that doesn't really amount to much. Indicators remain anemic, floundering about oversold so I don't really expect much to change here on Friday.
Euro: Last night I wrote that "it looks like there's more downside ahead for the euro" and there was, closing back down to 1.1385 after a long-legged red spinning top. Still, this is the sixth day in a row we've visited this level so we're still waiting for the break. Perhaps it's coming on Friday because the new overnight is moving lower out of this trading range and all the indicators continue to fall off of extreme overbought.
Transportation: So much for Wednesday's tall hammer in the trans. On Thursday they just gapped down on a tall red near-marubozu for a big 1.30% loss. That now makes it seven down in a row with indicators at extreme oversold (RSI=4.16). We've also got a stochastic finally close to a bullish crossover so I think the trans are due for a winning day here Real Soon Now.
Month right wrong no call conditional batting Dow
January 9 5 5 0 0.643 1433
February 9 3 5 3 0.800 1133
March 8 6 6 1 0.600 222
April 2 1 2 0 0.667 139
And the winner is...
The jittery action in the charts continues with most of the charts looking like they're ready for more downside but a rally in progress in the overnight futures. With ES sitting exactly on top of its new pivot this seems like a good time to make a conditional call: if ES can break above its pivot by mid-morning Friday, we'll close higher. If on the other hand, it remains below, we'll close lower. That's all she wrote. See you again Sunday night!
YM Futures Trader
No trade tonight..