Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday lower.
• ES pivot 2022.92.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: sell VZ.

Recap

It was looking really good for my conditional call on Tuesday as the Dow exploded right out the gate for 266 points after ES broke above its pivot.  But then things started to unravel and by the bell the Dow ended down 27 points.  Oh well.  It's a good play but not perfect and it's not entirely clear why it didn't work  So anyway now let's move on to Wednesday.

The technicals

The Dow:  On Tuesday the Dow produced the biggest spinning top I think I've ever seen, stretching from 17,923 to 17,572, a 351 point intraday swing.  But that action was enough to complete the bearish crossover I spoke of last night.  SO this chart looks even more bearish now.

The VIX:  On Tuesday the VIX gained another 5% exiting a descending RTC for a bullish trigger and a completed bullish stochastic crossover so it just looks like higher again on Wednesday.  Note also that RSI has begun moving higher before ever getting near oversold - another bearish sign.

Market index futures: Tonight, all three futures are lower at 1:21 AM EST with ES down 0.47%.  ES now has a clear new falling RTC going, a completed bearish stochastic crossover, OBV running a crazy low negative 3.3 million, and some non-trivial bearish knock-on in the overnight looking to make it a four day losing streak.  There's zip, zero, nada bullish about this chart tonight.

ES daily pivot: Tonight the ES daily pivot falls again from 2028.67 to 2022.92.  After a brief run higher ES has now fallen back well below its new pivot soe this indicator is once again bearish.

Dollar index:  The dollar got its mojo back on Tuesday punching 0.34% higher on a bullish engulfing candle back to near its recent highs.  It looks to me like its gearing up for another assault on those levels.

Euro:  After Monday's tall hanging man the euro rolled over on Tuesday saved only by recent support around 1.1769.  It's staging something of a comeback in the overnight but calling the euro higher Wednesday on that basis isn't catching the falling knife, it's catching the falling Acme safe, and that never ends well.

Transportation:  The trans put in a red spinning top Tuesday but with a new bearish crossover from a low level, this look continued bearish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      1       1           1       0.833    881

     And the winner is...

Whatever uncertainty I had last night looks to have been resolved tonight and the resolution is negative.  Accordingly I'm  just calling Wednesday lower.

Single Stock Trader
 
VZ was one of only 11 Dow stocks that managed a gain on Monday, but did it on an ugly red gap-up spinning top.  Since VZ's rallies have been shorter than its pullbacks lately, at 47.18 I'm calling this one a swing-trade sell tonight.