Wednesday Uncertain Ahead Of Yellen Testimony
The Night Owl Trader | Feb 10, 2016 01:33AM ET
The Hoot
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- Wednesday uncertain.
- ES pivot 1845.92. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- YM futures trader: still long at 16,434 .
After spending most of the day underwater, the Dow began a relentless post-lunch rally that nearly torpedoed my call for a lower close. It was only some last-minute selling that saved the day for me. And even then, the result was a classic doji star. Tonight's another Night Owl Lite night so just skip to the bottom for the results.
The technicals
Market index futures: Tonight, all three futures are lower at 12:59 AM EST with ES down 0.46%.
ES daily pivot: Tonight the ES daily pivot falls again from 1852.75 to 1845.92. That still leaves ES below its new pivot so this indicator just continues bearish.
We now have a bunch of charts stretched to fairly extreme levels. In particular, the VIX hit its upper BB with a dark cloud cover on Tuesday and that's always a great reversal sign. Add in dojis in the Dow and a big bullish divergence in the trans which gained 1.04% on a day the rest of the market fell and it's all starting to feel like a short-term bottom. On the other hand, the futures have resumed their free-fall in the new overnight, possibly on noise related to European banks, or something to that effect.
Oil, for a change was actually higher on Tuesday. But the kicker Wednesday is going to be Auntie Janet delivering a load of Feddage to Congress and who knows what she's going to say. So all in all, this looks like a good time to simply call Wednesday uncertain. I do believe we're setting up for at least one up-day before the week's out. Whether it's Wednesday is still an open question.
YM Futures Trader
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