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- Wednesday higher.
- ES pivot 2013.58. Holding above is bullish
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- Single stock trader: waiting on new VZ entry.
I don't like Monday-holiday weeks. They throw me off for the rest of the week. In any event, Tuesday's indecision reflected, I think, a general feeling that everyone must be on ECB watch. With that in mind, let's see if we can make any sense of Wednesday.
The Dow: The Dow had a big day Tuesday, down early triple digits. But the traders must have had a good lunch because soon thereafter it began moving higher, to end the day up a whopping 4 points. The resulting star is a reversal warning - but one which requires confirmation. So we're left to wait & wonder.
The VIX: Last night I wrote "this one looks lower Tuesday" and danged if that isn't just what happened, with theVIX down another 5%. It's a gap-down star but is also a bearish stochastic crossover so I don't think we're done going lower.
Market index futures: Tonight, all three futures are higher at 12:25 AM EST with ES up 0.17% On Tuesday ES put in a small green spinning top but it was enough to break out of a descending RTC for a bullish setup. Indicators now rising just off oversold, a completed bullish stochastic crossover, rising OBV and positive pin action in the overnight all point to continued higher on Wednesday.
ES daily pivot: Tonight the ES daily pivot rises from 1999.17 to 2013.58. And even with that jump we're still above the new pivot so this indicator continues bullish.
Dollar index: I refrained from calling the dollar lower last night in the face of an inverted hammer. Good thing too because the dollar just kept right on climbing, up another half percent Tuesday. The last time we had a monthly close this high was way back in March 2009. And still no end in sight despite impossibly overbought indicators.
Euro: And naturally the euro remained in freefall Tuesday, this time closing at 1.1554. Extrapolating the descending RTC, it looks like the euro will hit parity by the end of the year. Remember, you heard it here first.
Transportation: Last night I wrote "This one looks like there's more upside left" and indeed there was with the trans up a nice 0.96% on Tuesday. This green marubozu also broke out of the descending RTC for a bullish setup, completed the bullish stochastic crossover, and sent the indicators higher (except for RSI which in an unusual move, went a bit lower). But it looks like the rally isn't over yet.
And the winner is...
All the positive signs from last night remain in place tonight so, ECB or no, I'm just going to go ahead and call Wednesday higher.
Single Stock Trader
VZ gained a bit more on Tuesday but hit its upper BB again though on a tall dragonfly doji. With overbought indicators, I'd not buy here. If anything it might be time to start thinking about a quick short except that this isn't a good week for it, not with the ECB in the wings.