Tuesday Uncertain With Indicators Between Oversold And Overbought
The Night Owl Trader | May 24, 2016 01:04AM ET
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- Tuesday uncertain.
- ES pivot 2048.25. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: no trade.
Heh. I was congratulating myself on calling the Dow higher for Tuesday and it indeed spent nearly the entire day higher - until an odd little sell-off in the closing minutes torpedoed my call. But the damage was limited as the loss was just five points. No matter, we now move on to Tuesday.
The technicals
The Dow: So Monday's action resulted in a tall inverted hammer (almost), lopsided spinning top thingie as a dark cloud cover. Either way, it looks bearish despite a newly completed bullish stochastic crossover.
The VIX: This candle was even stranger. The VIX rose 4% on Monday but with a deep red hanging man as a dark cloud cover. With a completed bearish crossover and indicators only just off overbought, this looks more bearish to me than anything.
Market index futures: Tonight, all three futures are barely higher at 12:18 AM EDT with ES up 0.04%. On Monday ES gave us a classic red dark cloud cover. But we also have indicators that continue rising towards overbought and a completed bullish stochastic crossover.
ES daily pivot: Tonight the ES daily pivot rises from 2047.58 to 2048.25. That now leaves.ES below its new pivot so this indicator turns bearish.
Dollar index: Last night I wrote that "the next move is likely lower" and so it was with the dollar losing 0.13% on Monday for a bearish engulfing pattern with indicators that remain extremely overbought and a fresh bearish stochastic crossover. That all looks like more downside ahead to me.
Euro: And last night I also opined that "the euro goes higher from here". It finally did, just a bit, putting in a green long-legged doji back up to 1.12265. Indicators remain oversold and are now rising along with a fresh bullish stochastic crossover making me think there's more upside left.
Transportation: The trans underperformed the Dow on Monday, down 0.44% on a dark cloud cover. But indicators continue rising to halfway between oversold and overbought so there's not really much to go on here.
Get The News You Want
I'm getting mixed messages from the charts tonight with both the Dow and the futures looking lower but the VIX also looking lower (which would be good for stocks). And with little movement in the overnight futures plus indicators pretty much all halfway between oversold and overbought, this seems like a good night to simply call Tuesday uncertain.
YM Futures Trader
No trade tonight..
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