Tuesday, January 13, 2015

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher only if ES passes its pivot, else lower..
  • ES pivot 2028.67.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader closed.

Sometimes being nervous is a good thing.  I called Monday lower in the face of some bullish candles and it paid off with a 97 point decline in the Dow.  This market continues to run on oil but we'll look at the rest of the charts just in case.

The technicals

The Dow:  On Monday the Dow produced a fat red spinning top that only briefly managed to trade above Friday's close.  The indicators have begun moving lower before ever hitting overbought - a bearish sign.  And the stochastic is squeezing  its lines in preparation for a bearish crossover  Net net, this chart now looks bearish.

The VIX:  I didn't want to commit to this chart last night but the bullish piercing pattern prevailed and the VIX shot up 11.68% on Monday putting an end to its recent (and short) downtrend.  The indicators have stopped moving lower and the stochastic is gearing up for a bullish crossover.  Same story with VVIX so I'd say we have a good shot at more upside on Tuesday.

Market index futures: Tonight, all three futures are higher at 12:21 AM EST with ES up  0.15%.  ES looks bearish on a daily basis after Monday's fall as the stochastic just made a bearish crossover.  The other indicators are confused though with RSI and OBV rising but momentum and money flow falling.  Go figure.

ES daily pivot: Tonight the ES daily pivot falls again from 2042.83 to 2028.67. We remain about 3.5 points below the new pivot so this indicator remains bearish.

Dollar index:  Last night I called the dollar lower but it still managed to eke out a 0.04% gain, though admittedly on a stubby red candle.  The indicators remain crazy overbought and this candle peeled off the upper BB and it's in evening star configuration so I'm going to hazard a guess that the dollar (gasp) goes lower on Tuesday.

Euro:  Last night I thought the euro might go higher Monday.  Silly me.  It was one and done for that as the euro just gave up all of Friday's gains, though on a lopsided doji.  But indicators are still oversold and still rising so I'm taking a pass here tonight.

Transportation:  Falling about the same as the Dow on Monday, everything I wrote about that applies here too.  End of story.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    4      0       1           1       1.000

     And the winner is...

We now have a down Friday followed by a down Monday and that's a bearish sign.  And with no sign of any new support in oil, the overall gestalt is fairly bearish tonight.  Which makes me wonder why the futures are all moving higher.  And with ES so close to its pivot, that makes it a good time to try another conditional call.  So we're going to claim that if ES can break above its pivot by mid-morning Tuesday, we'll close higher, otherwise lower.

Single Stock Trader
Last night I wrote that "I still see more upside potential than downside risk at 46.76."  And indeed VZ was one of the few gainers in the Dow on Monday.  That was enough to generate a bullish RTC setup.  And indicators continue to rise so this stock remains a buy.  We'll sell when a sell signal appears.  Right now, 47.08 ain't it.

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