Thursday, January 22, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2021.50.  Holding above is bullish
  • Friday bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: waiting on new VZ entry.

The market just continued treading water on Wednesday as everyone awaits the big announcement from the ECB.  Right now the only question is whether or not it's already been baked in.  Personally I don't think that's entirely the case.  But perhaps the charts will shed some light on this subject as we continue on to the end of the week.

The technicals

The Dow:  Just more uncertainty from the Dow on Wednesday, this time in the form of a lopsided spinning top that after another triple digit excursion resulted in just a 39 point advance.  Technically though this chart remains bullish, probably reflecting the market's expectation of QE from the ECB.

The VIX:   Last night I wrote "I don't think we're done going lower".  Good thinking too because after a doji day the VIX just kept right on descending, down another 5.23% Wednesday on a giant bearish engulfing candle.  That's still nowhere near enough to drive the indicators oversold and the stochastic is still in full-on bearish crossover mode so there are still no bullish signs on this chart.

Market index futures: Tonight, all three futures are higher at 12:22 AM EST with ES up  0.20%.  Last night I wrote "[a bunch of things] all point to continued higher on Wednesday."  And sure enough, ES had a decent day on Wednesday continuing out of its descending RTC for a bullish trigger.  Indicators are now off oversold but continue rising and there's some more positive pin action in the overnight so it looks like the traders are expecting good news from the ECB on Thursday.

ES daily pivot: Tonight the ES daily pivot rises again from 2013.58 to 2021.50.  Once again we remain above the new pivot so this indicator remains bullish.

Dollar index:  The dollar has a rare down day on Wednesday but even so managed a green hanging man.  What it does Thursday will depend in large measure on the ECB, so no call here.

Euro:  Amazingly, the euro actually closed higher on Wednesday, its first green candle in seven sessions.  But two inverted hammers doth not a rally make so we'll just have to wait and see what the ECB says on Thursday.  That's sure to move the euro.

Transportation:  Last night I wrote "it looks like the rally isn't over yet.".  And indeed it wasn't as the trans packed on another 0.45% on Wednesday with three white soldiers and a bullish trigger on the descending RTC exit.  Indicators still not yet overbought though so I'm going to guess there's still room to run here on Thursday


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    7      3       1           1       0.727

     And the winner is...

Obviously the big news Thursday is the ECBs QE announcement.  Right now the technicals are looking like the market is gearing up to move higher ao I'm just going to assume that someone knows something I don't (not hard to do) and call Thursday higher.

Single Stock Trader

VZ remains in a rising RTC and it looks like my calls for a short term top last night were premature.  With non-confirmation of Tuesday's doji, it just looks continued higher.

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