Friday higher

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

• Friday higher..
• ES pivot 2076.00.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ topping.

Recap

Last night I said that if ES managed to break above its pivot by mid-morning Thursday we'd close higher.  Well ES made three charges at the pivot, at 2:10 AM, 3 AM and 3:40 AM.  And the third time was the charm as ES took off and never looked back.  And we did indeed close higher.  That just leaves one more day to round out the week so let's take a look at the charts.

The technicals

The Dow:  The Dow's 110 point advance on Thursday negated Wednesday's doji amid rising volume and handily broke through resistance at 17,889 for its best close YTD.  While we're now oversold, the proximity of the upper BB at 18,069 makes me think the Dow's going to want to take a sniff of that number on Friday.

The VIX:  Well whadaya know about that.  Last night I wrote "there could be more downside here on Thursday" and the VIX obligingly fell nearly 10% on a gap-down red marubozu that leaves us within sneezing distance of the 200 day MA at 14.51.  The momentum is clearly down at this point so I'm going to hazard that the VIX takes a peek at the MA on Friday.

Market index futures: Tonight, all three futures are modestly higher at 1:11 AM EST with ES up 0.04%  ES had a nice gain Thursday, just touching its upper BB at the close.  But that also leaves us right on the edge of the rising RTC and also pretty overbought.  That makes me think it might be time for some sort of retracement.  But so far at least, ES doesn't seem interested in moving lower.

ES daily pivot: Tonight the ES daily pivot rises again from 2066.17 to 2076.00. We remain above the new pivot so this indicator remains bullish.

Dollar index:  Last night I noted some strong resistance for the dollar and that proved to be simply too much to overcome so we ended down nearly a full percent.  That move was enough to form a new bearish stochastic crossover and drop us out of the rising RTC for a bearish setup.  It all adds up to continued lower on Friday

Euro:  Well the euro managed a small gain on Thursday but it remains mired in its recent congestion zone of 1.1281 to 1.1500.  So there's nothing to say here until we see a breakout and there's no way to tell which way it will be.  If I were trading the euro right now ... I wouldn't.

Transportation:  Last night I wrote "the trans might still have enough gas in the tank to motor higher on Thursday" and it turned out they had a secret extra reserve tank that was good for another .078% to easily clear resistance at 8971.  With this big green marubozu on the tape, there's nothing bearish at all here unless we encounter some typical Friday profit-taking.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   4      1       2           2       0.857    226

     And the winner is...

The charts are pretty uniformly bullish tonight so despite the fact that the Friday before the President's Birthday (ie. Washington's Birthday) holiday is historically pretty bearish, it's not clear that will be the case this year.  So I'm just going to go ahead and call Friday higher.  That's all she wrote.  See you again Monday night!

Single Stock Trader

Huh - VZ finally put in a red candle in the form of a dark cloud cove.r  I'd look for mor edownside here.  Eventually we'll find another buying opportunity.