Wednesday Lower
The Night Owl Trader | Oct 26, 2016 02:00AM ET
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- Wednesday lower.
- ES pivot 2141.00 Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- YM futures trader: short at 17,670.
I guess I can't be too surprised about the Dow's 54 point drop on Tuesday because the inverted hammer on Monday and a VIX that was looking ready to move higher telegraphed it from the start. I guess I let myself get spooked by futures that were moving higher in the overnight last night when I ended up calling the day as "uncertain". Still the day's action gives us something to chew on so let's get right to it..
The technicals
The VIX: Recall that last night I said the VIX looked ready for a move higher and that's just what we got on Tuesday with a 3.38% advance that confirmed Monday's stubby gap-down hammer with a comparatively large green bullish engulfing candle. That just exited the descending RTC for a bullish setup and the stochastic also eked out a bullish crossover - though you have to look at the actual numbers to tell.
In short, there seems to be plenty of upside left here. Take a look and see if you don't agree. Oh and it's worth a quick mention - the VIX is back to its normal inverse correlation with the rest of the market.
Market index futures: Tonight, all three futures are lower at 1:36 AM EDT with ES down 0.22%.
ES daily pivot: Tonight the ES daily pivot falls from 2142.67 to 2141.00. ES is now back below its new pivot so this indicator turns bearish.
With a VIX looking like it's confirming my guess about moving higher, a bunch of reversal andles on the charts and overnight futures guiding lower, I'm going to call Wednesday lower.
YM Futures Trader
No trade tonight.
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