Thursday, February 12, 2015

Thursday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher only if ES breaks above its pivot, else lower..
  • ES pivot 2066.17.  Breaking above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not yet a buy.

Last night I called Thursday as uncertina saying that "it could be a doji day"..  And that's exactly what it was with the Dow down 7 points and the SPX down all of 0.06 points.  I think we also got some of the clarity I ws looking for so let's get right to it.

[Note: the Blogspot spell checker is on one of its periodic strikes, so I apologize in advance for any typos.]

The technicals

The Dow:  On Wednesday the Dow put in a tall doji right on the upper end of Tuesday's gains.  The indicators moved even more overbought and I take this failure to advance a a bearish sign.

The VIX:  I also wrote last night that "[a bunch of mumbo-jumbo] makes this chart bearish, despite being oversold.".  Right again, as the VIX fell another 1.57% Wednesday completing the bearish evening star.  But there's no reversal sign yet so it's not out of the question that there could be more downside here on Thursday.

Market index futures: Tonight, all three futures are mixed at 12:40 AM EST with ES down 0.05% but YM up 0.02%.  Call it basically flat.  Last night I wrote that "I think ES might want to have a look at [the upper BB] on Wednesday" and that's just what happened with ES just touching the upper BB before falling back to form a nice doji.  The new overnight took a big pop right asfter the close but then gave it all back leaving us with a fat red hanging man, though it's started drifting slowly higher in the late evening.  We'll have to see now if it has the requisite mojo to bust through its pivot.

ES daily pivot: Tonight the ES daily pivot rises from 2056.42 to 2066.17.  That was enough to just put ES below the new pivot but it seems interested in mounting an attack on it as I write.  So it's bearish now but only weakly so.

Dollar index:  The dollar was too tough for me last night but ended putting in a decent 0.25% gain on Wednesday, right back to month-long resistance.

Euro:  I also couldn't call the euro last night and it's not surprising given that the euro has been putting in tiny little spinning tops for three days now, seemingly stuck around 1.1321.  We're oversold but it's looking like an evening breakout attempt has failed leaving us right back where we started.  Given this lack of direction, still no call here.

Transportation:  The trans rose 0.28% Wednesday in a bit of bullish divergence.  But the inverted hammer, overbought indicators and a bearish stochastic ccrossover suggest lower to come.  Rising indicators not yet overbought and a rising RTC all suggest the trans might still have enough gas in the tank to motor higher on Thursday.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   4      1       2           1       0.833    226

     And the winner is...

With ES so close to its new pivot and looking like it's serious about trying to break through in the early morning hours, tonight looks like another good choice to do a conditional call.  If ES can break above its pivot by mid-morning Thursday, we'll close higher.  If not, we'll close lower.

Single Stock Trader

VZ extended its gains Wednesday.  While it's annoying to see the bus pull away without you on board, well just wait for it to come back.  There's no law that says you have to trade.

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