Tuesday, March 31, 2015

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 2068.17.  Holding above is bullish
  • Rest of week bias higher technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ to continue higher.

Yup, Monday was one of those days where the technicals asserted themselves in a big way.  Everything looked bullish last night and pow zoom, up we went right out of the gate 264 Dow points just like that.  Now let's see if Tuesday will be that easy (I kinda doubt it).

The technicals

The Dow:  If you missed the first five minutes of Monday morning, you also missed most of the day's gains, it was over that fast.  The resulting tall green marubozu shot out of the descending RTC for a bullish setup and completed a bullish stochastic crossover while sending all the indicators higher, though still just barely oversold.  This all looks continued bullish.

The VIX:  Last night I wrote of the VIX, "it looks like it could go lower again on Monday".  And indeed it fell another 3.72% to gap right down through its 200 day MA and form a new bearish stochastic crossover.  The candle though is a hammer but the overall momentum suggests lower to come.

Market index futures: Tonight, all three futures are lower at 12:15 AM EDT with ES down 0.14%.  ES had a great day Monday, blasting out of its descending RTC for a bullish setup and neatly completing a bullish stochastic crossover.  My only worry here is the tendency of ES to retrace after big one day gains, and the overnight sag isn't helping matters any.

ES daily pivot: Tonight the ES daily pivot rises again from 2050.42 to 2068.17. We remain above the new pivot so this indicator remains bullish, though not quite so much as before

Dollar index:  Last night I wrote "I have to once again think the dollar goes higher on Monday" and it was good thinking because the dollar took an Olympic high jump-sized gap up 0.78% in a move that nicely completed its bullish stochastic crossover and provided a bullish trigger on the descending RTC exit.  The month-long downtrend is now officially over.  Only caveat here is that the pattern is now 2/3 of an evening star.  So we need to wait for confirmation Tuesday to see if that is confirmed or not.

Euro:  And last night I also wrote "[I] think the euro's going lower on Monday".  And hey presto, down it went, to close at 1.0834, a level not seen in a whole week.  With the indicators all falling towards oversold, a bearish stochastic is full effect and a bearish trigger on a rising RTC exit this chart looks continued lower.

Transportation:  Last night I wrote "this chart looks ready to move higher on Monday" and the trans on Monday were a virtual carbon copy of the Dow so everything I wrot3e there applies here too.  It all looks good.


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      7      6       4           4       0.647    976

     And the winner is...

Tonight the overall look of the charts remains bullish but I am concerned that after such a big one day gain the market may want to take a break.  Tuesday is also the end of the month and the quarter and that could lead to assorted profit-taking and/or rebalancing.  Also the last day of March is historically weak.  So with these two counter-currents operating tonight, I'm afraid I'm going to have to settle for officially calling Tuesday uncertain, though I personally believe that the bias is lower

Single Stock Trader

Last night of VZ I wrote "it's now a buy for the adventurous.". And it was an excellent adventure as VZ gained 1.15% to pop back up through its 200 day MA and complete a bullish stochastic crossover.  As indicators are still just barely oversold and OBV continues to rise, I'd say there's more upside evaluable here on Tuesday.

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