Monday, February 2, 2015

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher.
  • ES pivot 1998.42.  Holding below is bearish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ buy signal.

Wow -that was interesting.  On Friday we closed exactly 26 points lower than Wednesday - after three days of 200 points plus swings.  I'm glad I called it uncertain because I sure wasn't expecting a 252 point dive from the Dow.  Let's now move on and make some sense out of these wild swings as we move on to Monday.

The technicals

The Dow:  What we have here is a fairly rare bullish stick sandwich.  Friday's low was a bit below the previous two days but I think it still qualifies.  Indicators are nearly oversold now and the stochastic is about to form a bullish crossover so this chart looks bullish despite the scary 1.45% plunge last Friday.

The VIX:  So much for the dark cloud cover - on Friday the VIX jumped nearly 12% but did it with a green spinning top that left he left side of its rising RTC, both moves that tend to presage the end of an uptrend.  We're not yet overbought though  and no sign of a bearish stochastic crossover so this is a chart that requires confirmation.

Market index futures: Tonight, all three futures are higher at 12:22 AM EST with ES up 0.15%  Last Friday ES gave us a stick sandwich just like the Dow's.  Only it's even closed to a reversal with oversold indicators, rising OBV, and a curvy stochastic about to throw a bullish crossover.  A non-trivial gain in the overnight supports that idea.

ES daily pivot: Tonight the ES daily pivot falls again from 2006.83 to 1998.42. We're still below the new pivot so this indicator is now bearish.

Dollar index:  The dollar on Friday went nowhere, down just 001% with a second spinning top in a row  But none of that matters until we see a decisive break and that's yet to happen.  So calling the dollar lower is still premature here.

Euro:  The euro meanwhile continues its consolidation around 1.1314 in something that if you squint hard enough looks like a symmetrical triangle.  If it is, the break should be coming any day now, and it should be higher (yikes - did I just call the euro higher?)

Transportation:  On Friday the trans just got hammered, down 2.28% to close right on support at 8649.  That move left the indicators close to oversold and the stochastic getting ready to move around for a bullish crossover (though not quite).  This chart says a reversal is near, but not exactly when.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    8      6       4           1       0.563

     And the winner is...

We're seeing some signs of a move higher in the charts tonight but mostly they require confirmation.  Something of the sort might come from the SPX Hi-Lo index which bottomed on Thursday and actually moved higher on Friday.  That's often a sign of a market bottom.  Also Dr. Copper looks like he might be getting ready for a move higher.  And let's not forget the Monday is the start of February, historically quite a bullish day.  So I'm going to go with that and just call Monday higher.

Single Stock Trader

Well VZ surprised me with an inverted hammer and a loss on Friday having gotten caught up in the same funk that took down all but one Dow component. It's sitting on good support and its lower BB right now.  I hate to say it but it still looks like a buy to me.

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