Stock Market Continues To Zig-Zag Into Election
The Night Owl Trader | Oct 27, 2016 01:16AM ET
The Hoot
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- Thursday lower.
- ES pivot 2132.92 Holding below is bearish.
- Friday bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: short at 17,670.
It wasn't a bad idea to call Wednesday lower, it was just the wrong idea. The Dow did in fact tank right out the gate Wednesday morning but as we've seen so often lately it immediately reversed course before pulling back and bouncing around a bit to finish with a 30 point gain by the time the bell rang. FWIW, the SPX and NASDAQ both did end the day lower but my call is for the Dow so that's that. Oh well. I think this is the sort of thing we're going to see until after the election. And I for one can't wait for that to be over.
The technicals
The VIX: At least we were right about the VIX when last night I said it looked like it had "plenty of upside" left as it rose another 5.79% on Wednesday. This gave us a bullish trigger on a descending RTC and that is confirmed by indicators that are still oversold. So it looks like we're still not at a top here. I remain convinced of the importance of the VIX as a daily market predictor.
Market index futures: Tonight, all three futures are lower at 12:16 AM EDT with ES down 0.09%.
ES daily pivot: Tonight the ES daily pivot falls from 2141.00 to 2132.92. That's still not enough to put ES back aboe its new pivot so this indicator continues bearish.
A dpji in ES on Wednesday is being disconfirmed in the new overnight as the futures contijue lower, though admittedly not by much. And the VIX still seems to have more upside left. Indicators in general continue to fall but are not yet oversold and the trans significantly underperformed the Dow on Wednesday. Oil seems to be continuing lower and the overall impression is bearish – not extremely so but still enough that I don't see any big upside surprises coming soon. Although I think we're basically just going to zig-zag our way in small range days up to the election next month, fool's errand or not I'll give it s ahot anyway and try calling Thursday lower.
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YM Futures Trader
No trade tonight.
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