Friday, March 27, 2015

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher.
  • ES pivot 2046.83.  Holding above is bullish
  • Next week bias higher technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ nearing a reversal...
Recap

How is this day different from all other days?  Well, for the first time in four, we didn't end at session lows.  The picture has changed once again so let's run it up the flag pole and see who salutes.

The technicals

The Dow:  Last night I wrote "The lower BB would seem to be the next logical destination at 17,613 [I had the number written in wrong last night] and I think that's where we're headed."  And check it out - Dow's low on Thursday - 17579, lower BB - 17,579.  Veni, vidi, bounced off-di.  This leaves us with a nice tomahawk hammer.  I do wish the stochastic was getting ready for a bullish crossover, but it isn't yet.  So this is a reversal sign but one that requires confirmation.

The VIX:  Last night I wrote "more upside is not out of the question".  And that' question was answered with another 2.33% advance.  But it was with a stubby gap-up red spinning top that just touched the upper BB, that well-known short-circuiter of VIX rallies.  This looks like 2/3 of an evening star so I'd say we have a good reversal sign here even though the indicators haven't quite hit overbought yet.

Market index futures: Tonight, all three futures are higher at 1:06 AM EDT with ES up a non-trivial 0.24%  On Thursday ES put in a classic hammer that almost touched the lower BB on oversold indicators.  This is a reversal warning which the overnight seems to be confirming so far.

ES daily pivot: Tonight the ES daily pivot falls again from 2065.08 to 2046.83. But tonight ES has finally moved back above its new pivot so this indicator now turns back to bullish again.

Dollar index:  Last night I wrote "I still think the dollar moves higher by the end of the week.".  And right on cue the dollar delivered an impressive 0.49% green bullish engulfing marubozu on Thursday.  Along with indicators that now appear to have bottomed at oversold and a stochastic that has now executed a bullish crossover, this chart looks ready to move higher again on Friday.

Euro:  And last night I also wrote "I'd look for lower here soon.". And soon came right away with the euro right back down to 1.0882 on Thursday on a red bearish engulfing candle.  With indicators topped at overbought and a completed bearish stochastic crossover, and the new overnight trading outside the rising RTC for ea bearish setup, this chart looks nothing but lower on Friday.

Transportation:  It sure was MA day on Thursday as the trans kept right on falling.  Last night I wrote "I think we could hit the lower BB (which coincidentally is also a support line) on Thursday."  The trans spiked under the BB and support, and even through the 200 day MA but recovered enough by the end of the day to form a  nice hammer.  With indicators now well oversold and a stochastic starting to curve around, I'd say the selling is just about over here.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      5      6       4           4       0.600    677

     And the winner is...

I'm seeing some definite signs of a reversal on the charts tonight.  I have two choices at this point.  If I'm going to be conservative, I'd just call Friday uncertain but hey what the heck, let's go for it - I throw all caution to the wind and call Friday higher.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

Last night I wrote "
I think the selling's not done here yet."  And it wasn't as VZ continued lower under its 200 day MA on an inverted hammer.  This might be a reversal but I'm not so sure.  I'd need to see it first.  It's still not a buy in my book.

Thursday, March 26, 2015

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower.
  • ES pivot 2065.08.  Holding below is bearish
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ may go lower again..
Recap

Yow, I'm sure glad I called Wednesday lower as the Dow tumbled 293 on some bad economic news.  That leaves the charts at an interesting junction so let's put them on the 5:15 to Glendale and see where they get off.

The technicals

The Dow:  Even this big fall for the Dow wasn't enough to send the indicators oversold.  The lower BB would seem to be the next logical destination at 17,719 and I think that's where we're headed.

The VIX:  Last night I wrote of the VIX that "[a bunch of technical mumbo jumbo] all adds up to a move higher on Wednesday" and wouldn't you know it the VIX popped over 13% on a tall green marubozu that punched right through the 200 day MA, completed the bullish stochastic crossover and sent all the indicators rising off oversold.  With this kind of steam behind it, more upside is not out of the question.

Market index futures: Tonight, all three futures are slightly lower at 12:22 AM EDT with ES down just 0.02%  ES fell right out of its rising RTC Wednesday for a bearish setup and its indicators also fell to nearly oversold levels.  But we're still not near the lower BB at 2029.18 and in four of the last five big sudden drops ES has had, it didn't reverse until it touched the BB.  I'm expecting the same thing here.

ES daily pivot: Tonight the ES daily pivot dives from 2089.67 to 2065.08. And even with that we remain well below the new pivot so this indicator continues bearish.

Dollar index:  The dollar continued its sell-off on Wednesday down another 0.24% but putting in a hammer and its second green candle in a row.  That plus oversold indicators and a stochastic about to form a bullish crossover suggest that a reversal is at hand.  Like I said last night, I still think the dollar moves higher by the end of the week.

Euro:  And similarly, the euro's recent rally appears to be running out of steam in the 1.0986 neighborhood and with overbought indicators and a stochastic about to form a bearish crossover, I'd look for lower here soon.

Transportation:  The trans were hit even harder than the Dow on Wednesday, down just over 2% on a red marubozu that's nearing the 200 day MA at 8642.  Indicators have gone oversold but hte stochastic is not yet forming up for a bullish crossover so I think we could hit the lower BB (which coincidentally is also a support line) on Thursday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183

March      4      6       4           4       0.572    637

     And the winner is...

I'd love to be proven wrong since I'm always net long but I'm just not feeling the love from thee charts tonight so I'm just going to have to call Thursday lower again.

Single Stock Trader

I called VZ lower last night and it was, right back through its 200 day MA with falling indicators and a full-blown bearish stochastic running.  I think the selling's not done here yet.

Wednesday, March 25, 2015

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2089.67.  Holding below is bearish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ may go lower still.
Recap

Looks like my conditional call worked well on Tuesday.  After noodling about its pivot for most of the overnight hours, ES broke lower at 8:55 AM and made one failed attempt to get back above at 10:10 AM.  And that was that.  the market spent the rest of the day moving mostly lower.  So with that decided, let's continue on to Wednesday.

The technicals

The Dow:  Monday's inverted hammer was confirmed on Tuesday with  105 point dump.  But even that still left us inside the rising RTC though we did get that bearish stochastic I mentioned last night.  So with the indicators all nearly oversold there seems to be more downside risk than upside potential here.

The VIX:  Last night I wrote about the VIX, "this one looks higher again on Tuesday."  And indeed it was, up 1.57%.  And it was a second hammer in a row, plus it exited the descending RTC for a bullish setup.  Along with oversold indicators, that all adds up to a move higher on Wednesday.

Market index futures: Tonight, all three futures are modestly lower at 12: AM EDT with ES down 0.07%.  On Tuesday ES confirmed Monday's inverted hammer with a red candle that sent the indicators lower and completed the bearish stochastic crossover.  With a drift lower in the overnight we're now just falling out of the rising RTC for a bearish setup.  In general this chart looks bearish to me right now.

ES daily pivot: Tonight the ES daily pivot falls again from 2098.33 to 2089.67.  We remain below the new pivot so this indicator continues bearish.

Dollar index:  While the dollar remains in a descending RTC it finally managed a gain on Tuesday and a bullish piercing pattern at that.  With indicators now fairly oversold and a stochastic that is curving around for a bullish crossover I'd say the dollar is getting ready to move higher.  Maybe not Wednesday but before the end of the week for sure.

Euro:  Similarly, the euro put in a red spinning top on Tuesday that caused the indicators to peak at overbought.  The stochastic is flattening out so this all looks like we;re getting ready for a move lower on Wednesday.

Transportation:  Last night I wrote that this chart "does not look good for Tuesday.".  And so it wasn't, with the trans down another 0.67% on a small red marubozu.  That finally sent the indicators off overbought but we still have a ways to go before the lower BB or recent support  So with a bearish RTC trigger there's just nothing bullish about this chart tonight.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      3      6       4           4       0.538    34

     And the winner is...

Hmm - things seem to be lining up pretty uniformly bearish side tonight so I'm going to have to call Wednesday lower.

Single Stock Trader

Last night I said VZ was looking toppy and indeed it fell 0.46% on Tuesday but the indicators are still overbought so I think there's still more downside to come.

Tuesday, March 24, 2015

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher only if ES breaks above its pivot, else lower.
  • ES pivot 2098.33.  Holding below is bearish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ looking toppy.
Recap

Things were looking great for my call for a higher close Monday - until the Dow fell off a cliff in the very last minutes of the session to end down 10 points.  What the heck?  Oh well - it almost worked out. Now let's see how that changes the picture for Tuesday.

The technicals

The Dow:  The Dow's last second dive resulted in a tall inverted hammer that looks quite bearish when combined with indicators turning lower just before reaching overbought and a stochastic on the brink of a bearish crossover.

The VIX:  Last night I wrote "there's a good suggestion of a move higher from here" so at least I got that right as the VIX gained 3% on Monday.  Indicators have bottomed and the stochastic is primed for a bullish crossover so this one looks higher again on Tuesday.

Market index futures: Tonight, all three futures are higher at 1:25 AM EDT with ES up  0.05%.  ES had its own tall inverted hammer on Monday and is back to overbought but remains in a rising RTC.  And it does seem to be trying to rally in the overnight, so this one is too tough to call right now.

ES daily pivot: Tonight the ES daily pivot rises from 2094.58 to 2098.33. And that was enough to put ES back below the new pivot so this indicator is now bearish. 

Dollar index:  After a meteoric rise last month, the dollar is now putting in an equally spectacular fell, gapping down 0.89% on Monday in what now looks like an exponential crash.  The indicators are finally oversold but the stochastic is not yet ready for a bullish crossover so we might still have some more downside left here.  But with this waterfall curve, it looks like a blow-off that is close to completion.

Euro:  And the euro had a big day Monday gapping back up to 1.0954.  But it is now overbought and the overnight is moving lower again.  But remaining in a rising RTC, we need confirmation before calling this one lower for Tuesday.

Transportation:  Big bearish divergence here as the trans were slaughtered on Monday, down nearly two percent for their worst day since January 30th.  That sent the indicators way off overbought and completed a bearish stochastic crossover.  And with the lower BB still far away, this chart doe not look good for Tuesday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183

March      3      6       4           3       0.500    344

     And the winner is...

With a close call on Monday and ES close to its pivot I'm going to do yet another conditional call: if ES stays below its pivot by mid-morning Tuesday, we close lower, but if it breaks above the pivot and stays there by mid-morning, we close higher.

Single Stock Trader

With a red hanging man and overbought indicators, VZ is looking fairly toppy tonight.  No way I'm buying it here.

Monday, March 23, 2015

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher.
  • ES pivot 2094.58.  Holding above is bullish.  Now on "M" contract.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a buy.
Recap

Well Friday proved to be entertaining enough with a big pop out the gate and then a nice ballistic arc to finish off the day in style..  And the up/down see-saw continued, making now eight straight days of alternating gains and losses, and 12 of the last 13.  Anyway, now that we've got the Fed Follies and the triple-witching worries out of the way for a while, perhaps we can get back to some more predictable market action.  So let's get right to it and figure out where Monday is headed.

The technicals

The Dow:  The Dow remains in a bizarre stair-step uptrend.  The indicators still aren't quite yet overbought but based on recent history, you'd have to go with a move lower on Monday.  It's been a sure thing for seven in a row.

The VIX:  Now here at least we have a slightly more rational chart.  On Friday the VIX gapped down 7.46% nearly touching its lower BB with the tail of a hammer.  With oversold indicators there's a good suggestion of a move higher form here but one which requires confirmation on Monday.

Market index futures: Tonight, all three futures are higher at 12:41 AM EDT with ES up  0.17%.  On Friday ES had a nice day putting in a bullish engulfing candle but still unable to make any headway past YTD resistance at 2102.  Indicators are now overbought but the stochastic has threaded out and thus lost its predictive powers (or mojo as we like to say).  But ES seems intent on scouting out the record territory here so it's a bit premature to call it lower.

ES daily pivot: Tonight the ES daily pivot rises again from 2085.67 to 2094.58.  ES remains above its new pivot so this indicator turns bullish.  We are now running the "M" contract.

Dollar index:  On Friday the dollar continued its recent decline with a big 1.42% decline.  The daily rising RTC is now clearly down.  But moving out to the monthly chart we see a big developing inverted hammer with a stochastic that has just formed a bearish crossover.  I'm starting to wonder if maybe the dollar has seen its top right around the 2009 highs.  Hey monthly RSI is at 100 now.  There's nowhere to go but down from there.

Euro:  Meanwhile it looks like my call for the euro to pull into the Parityville station by the end of the month was derailed as someone threw a switch that sent the euro higher last week.  We've now existed the shortest descending RTC and the daily indicators are not yet overbought so there could still be some more upside left there.

Transportation:  The trans were giving out a reversal signal Thursday night with a doji star but that was rejected Friday in a big way with a 0.32% gain to keep the rising RTC intact.  That leaves the indicators overbought but no bearish signs left - just resistance around 9179.  And it seems like we'll be headed that way in a day or two.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
 
March      3      5       4           3       0.545    354

     And the winner is...

According to the Stock Traders Almanac, the Dow is up seven of the last 11 following March triple witching.    We also remain in an uptrend, albeit an on again-off again one and the futures are higher in the overnight.  And the TLT is looking toppy, and copper recently bottomed which implies higher stocks.  But the VIX looks getting ready to move higher which implies lower stocks.  What to do?

Overall I think I'm going to have to go with the bull case so with a fair amount of trepidation and going way out on a limb, I'm calling Monday higher.

Single Stock Trader

VZ managed to advance last Friday but until I see its RSI and stochastic scraping the bottom and not bumping against the ceiling, I'm not getting on board.

Friday, March 20, 2015

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 2094.25.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a buy.
Recap

The recent mean reversion sort of action we've been seeing after big gains the past few days asserted itself again on Thursday and trumped my call for a higher close.  I even mentioned it when I wrote "Ordinarily I'd say that after such a sudden large one-day move we'd be due for a pause".  Too bad I didn't stand by it.  Oh well - one more day to go and this crazy week is done.

The technicals

The Dow:  The Dow has alternated up and down for 11 of the last 12 now in an odd sort of stair-step rise that has consistently dragged the indicators higher.  On that alone there's not much to go by.  The only thing I see that's cause for concern is the stochastic which has now flattened out in preparation for a bearish crossover.  I'd be cautious here on Friday.

The VIX:  The VIX moved just 0.72% higher on a day the Dow fell triple digits in a sort of bullish divergence, unable to break back above its 200 day MA.  Nevertheless we are now oversold so it's reasonable to assume the next VIX trend will be higher.

Market index futures: Tonight, all three futures are higher at 12: AM EDT with ES up 0.11%  On Thursday ES put in a vague approximation of a dark cloud cover along with sending indicators overbought.  The stochastic is primed for a bearish crossover so despite a small run-up in the late evening hours, this chart has at least the suggestion of a reversal.

ES daily pivot: Tonight the ES daily pivot rises from 2089.58 to 2094.25.  That's enough to put ES back below the new pivot so this indicator now turns bearish.

Dollar index:  The dollar on Thursday recouped about 2/3 of its losses Wednesday in a move that sent the indicators off overbought.  That still leaves us in an official descending RTC though, the first downtrend I've seen here since last October.  What does this mean for the market?  Hard to say - the dollar has seemingly decoupled from the stock market lately.  It's also still not clear that the current trend means anything in a larger monthly context.

Euro:  The euro by contrast advanced nicely on Thursday to close at 1.0753 but is in the process of giving it all back in the overnight suggesting that the action of the last three days was nothing more than a multi-day fake-out.

Transportation:  The trans were completely unchanged Thursday after a long-legged doji that coupled with highly overbought indicators and a stochastic just inches away from a bearish crossover all suggest a move lower on Friday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
 

March      3      5       3           3       0.545    354

     And the winner is...

There are some indications of a move lower for Friday but they generally require confirmation.  But with this being a triple-witching day with no doubt all the usual accompanying gyrations, my usual policy is to stay away.  So I'm just calling Friday uncertain.  That's all she wrote.  See you again Sunday night!

Single Stock Trader


At least I was correct in staying away from VZ which moved a bit lower Thursday and is now hovering just above its 200 day MA.  With a spinning top, overbought indicators, and a stochastic that just formed a bearish crossover, I'd say there's more downside coming for VZ.

Thursday, March 19, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2089.58.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a buy.
Recap

There goes the patient!
Wow.  The Night Owl is astonished!  We've been hearing the talking heads blathering on for weeks about whether Wednesday's Fed statement would contain the P word.  Well in a truly masterful sleight of hand worthy of Houdini himself, Janet Yellin managed to remove the patient before the doctor even realized he was gone.

And Mr. Market, clearly impressed with such artful wizardry, responded enthusiastically by jacking up the Dow a handy 227 points, and that was after being down over 100 before lunch.  And it left all the shorts who were expecting a rate hike  red-faced with, uh, their pants down.

It was a day trader's dream, that's for sure, but unfortunately nothing we could capitalize on as swing traders.  I decided to just skip all the hoop-la based on the risk involved but was rewarded anyway simply by virtue of the pure theatrics.  Have you ever seen so many people hanging on a single word, "patient"?  Yessirree - that was a hot one, Moe!  You don't see that every day.

OK, OK, let me catch my breath and get back to business here as we see what impact this sudden turn of events might have on Thursday.


The technicals

The Dow:  Last night I said Wednesday would be news-driven and to the complete surprise of absolutely no one, it was, as the Fed's re3moval of the word "patient" sent the Dow shooting up 1.27% the instant the news came out.  After factoring out the excitement though, we're left with 11 of the last 12 sessions reversing direction.  On that basis alone, Thursday will be lower.  There's also the buyer's regret function at work.  The last two big up-candles have been followed by a down day.  And now the indicators are nearly overbought.  But in the absence of an actual bearish reversal sign, this one is too tough to call.

The VIX:  Auntie Janet let a lot of hot air out of the VIX on Wednesday as it deflated a big 10.79% gap-down to crash right through its 200 day MA dragging all the indicators along for a ride towards oversold.  There's nothing bullish about this chart tonight.

Market index futures: Tonight, all three futures are higher at 1:25 AM EDT with ES up  0.17%  ES had a great day Thursday courtesy of Ms. Yellin enough to drive the indicators overbought but not enough to fold over the stochastic for a bearish crossover.  There's still a bit of room to run to the next resistance line at 2115 too and I'd expect ES to touch it before taking a leg down.

ES daily pivot: Tonight the ES daily pivot jumps from 2072.50  to 2089.58.  We remain well above the new pivot so this indicator continues bullish.

Dollar index:  On Wednesday the dollar - gasp - fell, and it fell hard, down 1.177% for its worst one day performance since, oh I don't know - since the left hand edge of my daily chart and I'm too lazy to scroll back looking for it.  A good while anyway.  And that established a new descending RTC, meaning last month's uptrend is now officially over.  Is this the exponential blow-off top in the dollar we've all been waiting for?  Too soon to tell yet, but given the frenetic pace of the year-long run-up, it might be.

Euro:  Wow - we're just full of surprise today, aren't we.  The euro took off like a rocket to close at 1.0753.  And the overnight is gapping even higher, exiting the latest descending RTC and effectively derailing my call for parity by the end of March.  With a new rising RTC in place, ain't gonna happen just yet.  On the other hand, it remains to be seen if this mini-rally has any legs and judging by the overnight action, that's in some doubt too.

Transportation:  The trans on Wednesday was up like everything else but with a hanging man.  We're still in a rising RTC though and the indicators aren't quite yet overbought so it's still to early to calla  top here.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183

March      3      4       3           3       0.600    471

     And the winner is...

Ordinarily I'd say that after such a sudden large one-day move we'd be due for a pause and perhaps some profit-taking.  But given that it's not Friday yet and there's no bearish signs to speak of on the charts, I think they're going to knock 'em higher again Thursday to (possibly) do profit-taking on Friday.  So it's Thursday higher for me.

Single Stock Trader

After a nice pop Wednesday like everything else, VZ is hard up against YTD resistance with nearly overbought indicators.  It's been cycling nicely so far this year so I'd wait for the next pullback before getting back on this bus.