Wednesday, January 28, 2015

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher.
  • ES pivot 2032.67.  Holding above is bullish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ possible reversal soon.

Wow - I'm glad I called Tuesday as uncertain because I sure wasn't expecting a nearly 300 point plunge in the Dow.  That erases almost all of last week's rally and leaves us close to YTD lows.  This is a significant move so let's go right to the charts to see how it changes the picture.

The technicals

The Dow:  The Dow dumped over 200 points in its opening five minutes and then kept going lower.  An anemic rally effort left us down "only" 291 but technically this move did a lot of damage.  We fell decisively out of the rising RTC for a bullish setup, we sent all the indicators turning lower, and we got a clear bearish stochastic crossover.  This chart now looks distinctly negative.

The VIX:  I blew this one badly yesterday when I said the VIX looked lower.  Instead it shot up 11% on Tuesday with a gap-up spinning top that sent all the indicators higher from oversold and formed a new bullish stochastic crossover.  We just missed a bullish exit from the descending RTC though and the candle is 2/3 of a bearish evening star.  With mixed messages, this chart is too tough to call.

Market index futures: Tonight, all three futures are higher at 12:10 AM EST with ES up a significant 0.70%.  On Tuesday ES put in a bullish harami - haven't seen one of those in quite a while now.Indicators have come off oversold and last night's bearish stochastic crossover has fizzled out.  So there's at least a suggestion of a move higher here, particularly with the strong overnight action.

ES daily pivot: Tonight the ES daily pivot falls again from 2040.67 to 2032.67. However, we are now once again above the new pivot so this indicator continues bullish.

Dollar index:  The dolalr put in a third red candle in a row, the first time that's happened in nearly a month and the biggest three day loss in two months.  And even at that we're still overbought.  We finally have a fresh bearish stochastic crossover  I really have to bit my tongue but I'd hazard a wild guess that we could see more downside here on Wednesday.  You will note that it wasn't too long ago I mentioned the possibility that the dollar might be topping soon.  Is this it?  Who knows.

Euro:  Holy moly, the euro managed to put in two consecutive green candles for the first time since December 9th.  But with such strong downward pressure, it will really take an RTC exit for me to declare a reversal.  This is one downtown express bus you don't want to be standing in front of.

Transportation:  The trans also got hit hard on Tuesday, down a percent and a quarter to remain in a new steep descending RTC.  Even at that indicators hare yet to leave overbought and we have a new completed bearish stochastic crossover.  So this chart looks continued bearish.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    8      4       3           1       0.692

     And the winner is...

The charts in general continue to look fairly bearish with the exception of the futures which seem to be reacting to news that the central bank of Singapore has jumped on the QE bandwagon.  It was just last Friday I wrote "there's still a bunch of central banks we've yet to hear from.  It's still not too late to join the race to the bottom".  OK then, that's one more down.  And following the usual pattern, I'm going to take a wild guess and claim that we close Wednesday higher.

Single Stock Trader

VZ still in a steep descending RTC.  The reversal indicator will be strong when it comes but patience is the key.  Wait for it ...

No comments:

Post a Comment

Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.