Friday lower

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

• Friday lower.
• ES pivot 2108.75.  Holding below is bearish.
• Next week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ - no sell signal yet..

Recap

My conditional call last night worked again.  Note how ES was hugging its new pivot just after midnight.  It then mostly stayed above until 8:40 AM.  Then it made two failed attempts to break back above at 9:35 AM and again at 11:05 AM.  And that was that.  ES was never able to cross the pivot after mid-morning and so we closed lower.  (I'm not considering the Nasdaq which is really off doing its own thing somewhere).  So we move on once again to wrap up the week and the month.

The technicals

The Dow:  The Dow, for the third day in a row failed to extend its gains past 18,225.  And indeed we continue to get reversal signs, this time in the form of a red hanging man/almost star that traded just barely outside the rising RTC for a bearish setup.  With indicators remaining highly overbought, I still think the next move here is lower.

The VIX:  Last night I wrote "this could move higher Thursday" and it did, confirming Wednesday's hammer with a 0.51% gain, though on an inverted hammer.  We remain in a descending RTC but we're also highly oversold so this chart being massively conflicted is too tough for me tonight.

Market index futures: Tonight, all three futures are lower at 12:13 AM EST with ES down 0.12%  On Thursday ES put in a classic star but below Wednesday's spinning top which itself marked a high.  It also fell just on the edge of the rising RTC for a bearish setup.  And the overnight is now outside that for a bearish trigger so with the indicators still well overbought and having clearly topped, this chart looks lower.

ES daily pivot: Tonight the ES daily pivot dips again from 2111.75  to 2108.75. That now leaves ES below the new pivot so this indicator turns bearish.

Dollar index:  The dollar had a massive (and completely unexpected, by me anyway) 1.17% pop on Thursday to hit the upper BB gong in a big way with a giant green marubozu.  That sent RSI overbought but the other indicators have not yet topped.   So we need to see if the dollar has the chops to capitalize on this advance (and it has shown the ability to do so in the past few months) or if it will bounce off the upper BB and head lower.  No call on this one.

Euro:  Whew - I blew this one badly.  I though we were going higher but instead the euro took its biggest dump since January 22nd on Thursday to close at 1.1199, below its lower BB and just above its YTD support at 1.1152.  Backing out the descending RTC and I'm updating my call for euro-dollar parity to September 1, 2015.  Meanwhile, I see no short-term upside here either.

Transportation:  Unlike the Dow's tiny decline, the trans dove 0.54% Thursday to exit their rising RTC for a bearish setup and cause a bearish stochastic crossover.  With indicators still overbought this all adds up to lower on Friday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183

     And the winner is...

The overall look of things has now turned somewhat bearish and the last day of February is historically pretty weak, so I'm going to go ahead and call Friday lower.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

I was a little disappointed in VZ's inability to make much headway on Thursday despite putting in a green bullish engulfing candle so I reluctantly cut it free at 49.39, making a bit of money in the process.  It's not really a sell yet at this point.  I'm just worried about it getting dragged down along with the rest of the market on a down day.