Thursday, March 12, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher....
  • ES pivot 2043.33.  Holding above is bullish.
  • Friday bias lower technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ is a buy for the adventurous.

Things were looking pretty good for my call for a higher close Wednesday until one of those infamous late afternoon sell-offs torpedoed the whole deal.  But the damage was limited to just 28 Dow points.  The concept wasn't bad - big down day followed by a small move the next day - that makes it three pairs of these in a row now.  So where does that leave Thursday?  Let's check it out.

The technicals

The Dow:  The Dow tried to recover from Tuesday's triple digit swoon and almost made it, but not quite.  Oh well.   We're still left with an inverted hammer on highly oversold indicators and a stochastic that's primed and ready for a bullish crossover.  This chart now looks like it's got more upside potential than downside risk.

The VIX:  The VIX sent some mixed messages on Wednesday, putting in a 1.08% bullish engulfing candle but also just touching its upper BB.  That BB is the third rail of the VIX.  The VIX rarely spends much time moving higher after hitting it  That thesis is supported by highly overbought indicators (RSI=93) and a stochastic just primed for a bearish crossover.  The trade was also just outside the rising RTC for a bearish setup.  All in all, I say the VIX is lower Thursday

Market index futures: Tonight, all three futures are higher at 12:36 AM EDT with ES up 0.23 %  On Wednesday ES traded almost entirely below the lower BB with an inverted hammer.  Indicators moved even lower into extreme oversold territory and the stochastic has just about fallen off the bottom of the chart.  This just has to be near a reversal in my book.

ES daily pivot: Tonight the ES daily pivot falls again from 2053.75  to 2043.33. But that's enough to put ES back above the new pivot so this indicator is back to bullish.

Dollar index:  The incr3dible helium dollar just kept rising on Wednesday with a second gap-up candle in a row for another 1.16% gain.  The dollar is now clearly going exponential so a pullback has to be coming soon.  But for now it's still up, up and away!

Euro:  And of course the euro just kept going lower on Wednesday closing this time at 1.0535.  It was January 2003 the last time we saw this.  And of course the Parityville Express is still on track for an on-time arrival by the end of the month.  We're only five cents away now.  Given recent moves, that could be accomplished in a single day.

Transportation: IN a bit of bullish divergence, Dow Theory-wise, the trans advanced on a day the Dow declined a bit, up 1.12% with a green marubozu that formed a bullish stochastic crossover and exited the descending RTC for a bullish crossover after bouncing off its lower BB.  This one now looks higher for Thursday.


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      2      3       1           2       0.571    357
     And the winner is...

We've now hit some pretty oversold levels and I'm seeing signs of bottoming, particularly in the VIX, the trans and the futures so I'm just going to go ahead and call Thursday higher.

Single Stock Trader

Well VZ gained a bit on Wednesday with a green spinning top. and a stochastic that just eked out a bullish crossover.  We dont' yet have the descending RTC exit for confirmation but I'm blessing this one anyway as a buy.  I took a small position at 47.91 - not the best entry point of the day for sure, but I have other things to do than sit in front of a screen staring at VZ all day.

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