Wednesday, February 11, 2015

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 2056.42.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not yet a buy.

My conditional call for Tuesday worked perfectly.  Just look at the ES chart.  It dropped back below the pivot at 3.35AM but then fought back up above for a positive open.  Then it made one brief stab at the pivot \right at 10:45 AM but that failed and it was up up and away from there.  As I say, the conditional call doesn't always work but it works often enough to be useful.  So now we move on to Wednesday.

The technicals

The Dow:  Last night pretty much all the technicals were wrong.  I kind of had that idea in mind when I made it a conditional call.  In any case, the Dow had a nice 0.79% pop to more than retrace Monday's losses and approach YTD resistance.  But that still leaves us overbought and with a stochastic more likely to form a bearish crossover than anything.  So I just have to abstain from this chart tonight.

The VIX:  Silly me - I said the VIX was going higher on Tuesday in the face of 2/3 of a bearish evening star.  Wel that star was out in full force Tuesday with a 7.12% gap-down drop in the VIX to complete this pattern.  That makes this chart bearish, despite being oversold.

Market index futures: Tonight, all three futures are lower at 12:42 AM EST with ES down 0.11%  ES had a very nice day Tuesday making back two days worth of losses and breaking resistance at 2057.  We're now officially overbought but with the upper BB at 2077.29 and will being in a rising RTC I think ES might want to have a look at that number on Wednesday though ES certainly isn't showing much enthusiasm for that idea in the late night hours.

ES daily pivot: Tonight the ES daily pivot rises from 2043.58 to 2056.42. That still leaves us above the new pivot so this indicator is still bullish.

Dollar index:  The dollar posted a 0.29% gain on an unusual red hanging man.  With indicators still not yet overbought there's enough uncertainty here to keep me from making a call.

Euro:  The euro fell just a bit on Tuesday on a nice little star.  With indicators nearly oversold that seems to imply some bottom formation and our current level around 1.13 is indeed a support line.  But we also have a bearish RTC trigger so this chart isn't clear at all.  Hey, sometimes that happens.

Transportation:  And finally the trans defied my predictions to gain a healthy 0.86% on Tuesday with a nearly bullish engulfing pattern to retrace all of Monday's losses and keep us overbought.  We're still outside the last rising RTC though so technically that's a bearish trigger.  We'll see.


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

     And the winner is...

The market is at something of a crossroads right now.  The charts in general look fairly bullish but they're near key resistance lines.  It also seems that the recent rally has largely been fueled by oil, and right now oil seems to be running out of gas (sorry, couldn't resist).  I think the next move is going to be lower, I'm just not sure if that will be on Wednesday.  It could be a doji day.  So on that note I will just have to call Wednesday uncertain.  Wednesday should provide more clarity.

Single Stock Trader

The 200 day MA acted as support for VZ and it gained even more on Tuesday.  But we remain highly overbought and I'm just going to wait for the next pullback to buy in again.

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