Tuesday, February 10, 2015

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher only if ES stays above pivot, else lower.
  • ES pivot 2055.17.  Holding above is bullish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a buy here..

My hunch last night about a lower market Monday came to pass with a 95 point tumble in the Dow, based on Greece, the Ukraine, whatever, doesn't matter.  The point is that all this news is generally baked into the charts so let's see what they have to say now for Tuesday.

The technicals

The Dow:  Last night I wrote "this one looks bearish for Monday." and on Monday the Dow confirmed Friday's red spinning top to fallout of its rising RTC for a bearish setup.  Note too that that now leaves us with a down Friday followed by a down Monday - a bearish sign in its own right.  RSI remains overbought and the stochastic just formed a bearish crossover so I have to guess we're going lower again on Tuesday.

The VIX:  Lat night I wrote "this one look[s] higher Monday". and how about that, the VIX jumped 7.29% on a big gap up albeit red candle.  Sorta looks like an evening star now.  But it does give us an RTC bullish trigger and a bullish stochastic crossover so I'd have to vote for more upside on Tuesday.

Market index futures: Tonight, all three futures are modestly higher at 12:14 AM EST with ES up  0.09%  On Monday, ES confirmed last Friday's spinning top as I wrote "this chart looks bearish now'.  And with RSI still overbought and a fresh bearish stochastic crossover, and the overnight trading outside the rising RTC for a bearish crossover it still looks bearish to me.

ES daily pivot: Tonight the ES daily pivot falls again from 2055.17 to 2043.58. That, finally, is enough to put ES back above its new pivot, though just barely, but it does turn this indicator bullish.

Dollar index:  On Monday the dollar perhaps understandably gave back about a quarter of Friday's gains losing 0.29%.  That left the indicators confused - RSI and momentum falling but the stochastic rising.  With none of them at extreme levels, this dark cloud cover needs confirmation, though I have to say my guess would be bearish here.

Euro:  After Friday's big bearish engulfing candle negated all of Thursday's gains, the euro managed a small gain Monday for a little green spinning top that looks more like a DCB than anything else.  It does make last week's rally attempt look more like a fake-out than anything else.  With indicators continuing to fall but not yet oversold, I have to think we haven't seen the bottom of the current move yet.

Transportation:  On Monday the trans did what the Dow did, only moreso, so my comments there apply here too.  Looks bearish.


Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   3      1       1           0       0.750     86

     And the winner is...

Hmm - well ya know, all the charts look bearish tonight with the lone exception of the futures breaking above their pivot.  I will also note that oil appears to have bottomed (no I don't think this is a "head fake" as has been bandied about - we have a solid weekly descending RTC exit that strongly suggests the downtrend is over.)  But I'm going to play this one conservatively - given the proximity of ES to its pivot it seems like a good time for a conditional call: if ES manages to stay above its pivot by mid-morning Tuesday, we close higher.  If it galls back under, we close lower.

Single Stock Trader

On Monday VZ was indeed unable to extend Friday's gains.  This spinning top looks bearish to me.  IT's still not a buy here.

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