Dow Has Room To Run
The Night Owl Trader | Sep 29, 2016 01:03AM ET
The Hoot
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- Thursday higher.
- ES pivot 2157.50. Holding above is bullish.
- Friday bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: short at 17,670.
Huh - well it seemed like a reasonable thesis last night that we were going lower on Wednesday, and the Dow did in fact head south right out the gate - until a rally kicked in right after lunch to torpedo my call with a non-trivial 111 point gain. I guess I discounted the technicals too much in favor of negative-looking futures last night. Oh well. We dust off and move on as we close in on the end of the week, the month, and the quarter.
The technicals
Market index futures: Tonight, all three futures are higher at 12:22 AM EDT with ES up 0.15%.
ES daily pivot: Tonight the ES daily pivot rises from 2146.50 to 2157.50. That still leaves ES above its new pivot so this indicator continues bullish.
According to The Stock Traders Almanac, the two days before the last day of September are historically bullish That certainly played out on Wednesday despite being a long way from a sure thing Tuesday night. Will that hold out for Thursday too? Well I have to say that's entirely possible.
Wednesday saw some strong action on above average volume supporting the notion that Tuesday wasn't just a debate-induced one-off. We now have a new bullish stochastic crossover in the Dow with no resistance til 18,400 and indicators still a long way from overbought, so there's definitely some room to run here.
In any case I certainly don't see anything particularly bearish tonight so I guess all that leaves is to call Thursday higher.
YM Futures Trader
No trade tonight.
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