Dow Puts In Decent Bullish Engulfing Pattern
The Night Owl Trader | Jul 20, 2016 01:59AM ET
The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Wednesday higher only if ES stays above its pivot, else lower.
- ES pivot 2156.92. Breaking above is bullish, below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: short at 17,670.
Foo. My call for a lower close on Tuesday was looking good early on as the Dow wavered and then went negative - until lunch time. It then began a march higher to finish all of 26 points higher. Now the SPX and Nasdaq did both indeed end lower, but my call is for the Dow so that's a miss. It's realy difficult to make accurate calls in such a low volatility environment. Let's see if we can make any sense of this as we continue on to Wednesday.
The technicals
Market index futures: Tonight, all three futures are lower at 12:24 AM EDT with ES down 0.09%.
ES daily pivot: Tonight the ES daily pivot falls from 2158.67 to 2156.92. That leaves ES right on top of its new pivot so this indicator is neither bullish nor bearish at the moment.
On Tuesday the Dow put in a decent bullish engulfing pattern but the SPX gave us a weak doji. The Dow's RSI remains stuck on 100 for the second day in a row. It looks rather toppy but simply refuses to go lower. And the futures aren't offering much in the way of guidance tonight.
What we do have is an ES sitting right on its new pivot so we're going to take that exit and make another confitional call. This essentially punts the decision to mid-morning Wednesday.
If ES breaks above its daily pivot and is still there by mid-morning Wednesday, we'll close higher. But if it breaks below the pivot, we close lower. It doesn't always work, and you do lose the movement of the open, but that's the best I can do at the moment.
YM Futures Trader
No trade tonight.
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