Monday, March 23, 2015

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher.
  • ES pivot 2094.58.  Holding above is bullish.  Now on "M" contract.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a buy.

Well Friday proved to be entertaining enough with a big pop out the gate and then a nice ballistic arc to finish off the day in style..  And the up/down see-saw continued, making now eight straight days of alternating gains and losses, and 12 of the last 13.  Anyway, now that we've got the Fed Follies and the triple-witching worries out of the way for a while, perhaps we can get back to some more predictable market action.  So let's get right to it and figure out where Monday is headed.

The technicals

The Dow:  The Dow remains in a bizarre stair-step uptrend.  The indicators still aren't quite yet overbought but based on recent history, you'd have to go with a move lower on Monday.  It's been a sure thing for seven in a row.

The VIX:  Now here at least we have a slightly more rational chart.  On Friday the VIX gapped down 7.46% nearly touching its lower BB with the tail of a hammer.  With oversold indicators there's a good suggestion of a move higher form here but one which requires confirmation on Monday.

Market index futures: Tonight, all three futures are higher at 12:41 AM EDT with ES up  0.17%.  On Friday ES had a nice day putting in a bullish engulfing candle but still unable to make any headway past YTD resistance at 2102.  Indicators are now overbought but the stochastic has threaded out and thus lost its predictive powers (or mojo as we like to say).  But ES seems intent on scouting out the record territory here so it's a bit premature to call it lower.

ES daily pivot: Tonight the ES daily pivot rises again from 2085.67 to 2094.58.  ES remains above its new pivot so this indicator turns bullish.  We are now running the "M" contract.

Dollar index:  On Friday the dollar continued its recent decline with a big 1.42% decline.  The daily rising RTC is now clearly down.  But moving out to the monthly chart we see a big developing inverted hammer with a stochastic that has just formed a bearish crossover.  I'm starting to wonder if maybe the dollar has seen its top right around the 2009 highs.  Hey monthly RSI is at 100 now.  There's nowhere to go but down from there.

Euro:  Meanwhile it looks like my call for the euro to pull into the Parityville station by the end of the month was derailed as someone threw a switch that sent the euro higher last week.  We've now existed the shortest descending RTC and the daily indicators are not yet overbought so there could still be some more upside left there.

Transportation:  The trans were giving out a reversal signal Thursday night with a doji star but that was rejected Friday in a big way with a 0.32% gain to keep the rising RTC intact.  That leaves the indicators overbought but no bearish signs left - just resistance around 9179.  And it seems like we'll be headed that way in a day or two.


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
March      3      5       4           3       0.545    354

     And the winner is...

According to the Stock Traders Almanac, the Dow is up seven of the last 11 following March triple witching.    We also remain in an uptrend, albeit an on again-off again one and the futures are higher in the overnight.  And the TLT is looking toppy, and copper recently bottomed which implies higher stocks.  But the VIX looks getting ready to move higher which implies lower stocks.  What to do?

Overall I think I'm going to have to go with the bull case so with a fair amount of trepidation and going way out on a limb, I'm calling Monday higher.

Single Stock Trader

VZ managed to advance last Friday but until I see its RSI and stochastic scraping the bottom and not bumping against the ceiling, I'm not getting on board.

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