Tuesday, March 24, 2015

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher only if ES breaks above its pivot, else lower.
  • ES pivot 2098.33.  Holding below is bearish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ looking toppy.

Things were looking great for my call for a higher close Monday - until the Dow fell off a cliff in the very last minutes of the session to end down 10 points.  What the heck?  Oh well - it almost worked out. Now let's see how that changes the picture for Tuesday.

The technicals

The Dow:  The Dow's last second dive resulted in a tall inverted hammer that looks quite bearish when combined with indicators turning lower just before reaching overbought and a stochastic on the brink of a bearish crossover.

The VIX:  Last night I wrote "there's a good suggestion of a move higher from here" so at least I got that right as the VIX gained 3% on Monday.  Indicators have bottomed and the stochastic is primed for a bullish crossover so this one looks higher again on Tuesday.

Market index futures: Tonight, all three futures are higher at 1:25 AM EDT with ES up  0.05%.  ES had its own tall inverted hammer on Monday and is back to overbought but remains in a rising RTC.  And it does seem to be trying to rally in the overnight, so this one is too tough to call right now.

ES daily pivot: Tonight the ES daily pivot rises from 2094.58 to 2098.33. And that was enough to put ES back below the new pivot so this indicator is now bearish. 

Dollar index:  After a meteoric rise last month, the dollar is now putting in an equally spectacular fell, gapping down 0.89% on Monday in what now looks like an exponential crash.  The indicators are finally oversold but the stochastic is not yet ready for a bullish crossover so we might still have some more downside left here.  But with this waterfall curve, it looks like a blow-off that is close to completion.

Euro:  And the euro had a big day Monday gapping back up to 1.0954.  But it is now overbought and the overnight is moving lower again.  But remaining in a rising RTC, we need confirmation before calling this one lower for Tuesday.

Transportation:  Big bearish divergence here as the trans were slaughtered on Monday, down nearly two percent for their worst day since January 30th.  That sent the indicators way off overbought and completed a bearish stochastic crossover.  And with the lower BB still far away, this chart doe not look good for Tuesday.


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      6       4           3       0.500    344

     And the winner is...

With a close call on Monday and ES close to its pivot I'm going to do yet another conditional call: if ES stays below its pivot by mid-morning Tuesday, we close lower, but if it breaks above the pivot and stays there by mid-morning, we close higher.

Single Stock Trader

With a red hanging man and overbought indicators, VZ is looking fairly toppy tonight.  No way I'm buying it here.

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