Thursday, January 15, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2002.75.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: waiting on new VZ entry.

It was another wild day on Wall St. Wednesday as the Dow plunged 128 points in the opening sixty seconds and kept on going lower until a post-lunch rally kicked in to end "only" down 187.  You can't blame oil, which actually rose for once.  Who knows, maybe it was the Charlie Hebdo Put (whatever that is).  Bottom line - that was then, this is now.  And tomorrow is the only thing that matters.  So it's back to the charts as we devine the future yet again.

The technicals

The Dow:  Making it a four day losing streak, the Dow put in a fat hammer Wednesday.  But it also made a bearish stochastic crossover.  So hmmm - what's up with that.  Well we're got the lower BB not too far away at 17,190 and support before that at 17.363 so right now I'd say we could see more downside but it's limited, and a reversal is due soon.

The VIX:  The daily VIX is often the most telling chart of the day and so it was on Wednesday as the VIX gapped up 4.47% but on a red marubozu that just touched its upper BB at 23.12.  While we still have a completed bullish stochastic crossover this sort of candlestick action looks distinctly bearish to me.

Market index futures: Tonight, all three futures are higher at 12: 36AM EST with ES up a respectable 0.49%.  On Wednesday ES put in a nice hammer that nearly touched its lower BB intraday.  The overnight rally, currently in bullish piercing pattern position is moving the indicators back higher.  Also, OBV is coming off its crazy low values (negative 4.2M).  This provides some minor confirmation of the hammer and gives at least a suggestion of a move higher on Thursday.

ES daily pivot: Tonight the ES daily pivot falls again from 2022.92 to 2002.75.  That, plus an evening rally in ES was enough to put us back above the new pivot so this indicator now turns bullish.

Dollar index:  The dollar put in a tall doji, neither hammer nor hanging man on Wednesday as it continues to congest around 62.40 ($USDUPX).  The bounce off the upper BB and indicators about to fall off overbought suggest that the next move is lower.

Euro:  Whereas the euro on Wednesday simply put in a classic star near the lower end of Tuesday's action, seemingly looking for support itself.  Given that the last monthly close lower than this was November 2003, I'd have to think a move higher is on the way.  Or maybe the euro is just doing a Kodak and marching inexorably towards zero.

Transportation:  On Wednesday the trans dropped another 0.86% but on a red hammer that just touched its lower BB at 8585 intraday.  The last two bottoms formed that way so I'm going to guess there's at least even odds that we go higher on Thursday.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      1       1           1       0.857

     And the winner is...

What a difference a day makes.  Last night things were looking bearish, tonight I'm seeing a lot of positive signs.  Enough in fact for me to change course and call Thursday higher.

Single Stock Trader

I called a top in VZ at 47.18 last night and it indeed moved lower Wednesday to 46.97.  But it's still not a buy again so for now we're on the sidelines watching.

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