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- Wednesday uncertain.
- ES pivot 2265.75. Holding below is bearish..
- Rest of week bias lower technically.
- Monthly outlook: bias higher.
- YM futures trader: no trade tonight.
Last night I called the Dow lower for Tuesday. I watched in frustration as a nice drop out the gate began to evaporate and it looked like we were headed for 20K right around lunch time. But I was vindicated in the end as whatever Mr. Market had for lunch didn't quite agree with him and we slid back into the red to end the day with a modest 32 point loss, just like I called for. So having finally gotten one right, let's see if there's anything to be figured out regarding Wednesday.
The VIX: The VIX basically did nothing on Tuesday, off just 0.61% on a tiny stubby red spinning top that doesn't mean much. It's been noodling about the 11.60 level for three days now, propped up by year-long support just below but unable to get anything going. It still seems like the next move will be higher. Just when that happens though is open to question. We seem strangely becalmed at the moment.
Market index futures: Tonight, all three futures are lower at 1:18 AM EST with ES down 0.13%.
ES daily pivot: Tonight the ES daily pivot falls again from 2267.92 to 2265.75. ES remains below its new pivot so this indicator continues bearish.
January 3 2 1 0 0.600 70
And the winner is...
The trans significantly outperformed the Dow on Tuesday but they are in a seven-day trading range of their own, going basically nowhere. The Dow was down, the Nasdaq was up and the SPX was flat. The market really seems to be at a loss for which way it wants to go. Now with two losing days in a row and ES being overbought with a new bearish stochastic crossover, you'd think this would point to a move lower on Wednesday.
But the wide range and long shadows we've been getting the past few days, both upper and lower make calling the close problematic. I think I'd rather wait a bit and let this tug of war sort itself out before committing to a given side. Therefore, I am calling Wednesday uncertain. The bias admittedly looks negative, but you never can tell.
YM Futures Trader
No trade tonight.