Wednesday, March 25, 2015

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2089.67.  Holding below is bearish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ may go lower still.

Looks like my conditional call worked well on Tuesday.  After noodling about its pivot for most of the overnight hours, ES broke lower at 8:55 AM and made one failed attempt to get back above at 10:10 AM.  And that was that.  the market spent the rest of the day moving mostly lower.  So with that decided, let's continue on to Wednesday.

The technicals

The Dow:  Monday's inverted hammer was confirmed on Tuesday with  105 point dump.  But even that still left us inside the rising RTC though we did get that bearish stochastic I mentioned last night.  So with the indicators all nearly oversold there seems to be more downside risk than upside potential here.

The VIX:  Last night I wrote about the VIX, "this one looks higher again on Tuesday."  And indeed it was, up 1.57%.  And it was a second hammer in a row, plus it exited the descending RTC for a bullish setup.  Along with oversold indicators, that all adds up to a move higher on Wednesday.

Market index futures: Tonight, all three futures are modestly lower at 12: AM EDT with ES down 0.07%.  On Tuesday ES confirmed Monday's inverted hammer with a red candle that sent the indicators lower and completed the bearish stochastic crossover.  With a drift lower in the overnight we're now just falling out of the rising RTC for a bearish setup.  In general this chart looks bearish to me right now.

ES daily pivot: Tonight the ES daily pivot falls again from 2098.33 to 2089.67.  We remain below the new pivot so this indicator continues bearish.

Dollar index:  While the dollar remains in a descending RTC it finally managed a gain on Tuesday and a bullish piercing pattern at that.  With indicators now fairly oversold and a stochastic that is curving around for a bullish crossover I'd say the dollar is getting ready to move higher.  Maybe not Wednesday but before the end of the week for sure.

Euro:  Similarly, the euro put in a red spinning top on Tuesday that caused the indicators to peak at overbought.  The stochastic is flattening out so this all looks like we;re getting ready for a move lower on Wednesday.

Transportation:  Last night I wrote that this chart "does not look good for Tuesday.".  And so it wasn't, with the trans down another 0.67% on a small red marubozu.  That finally sent the indicators off overbought but we still have a ways to go before the lower BB or recent support  So with a bearish RTC trigger there's just nothing bullish about this chart tonight.


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           4       0.538    34

     And the winner is...

Hmm - things seem to be lining up pretty uniformly bearish side tonight so I'm going to have to call Wednesday lower.

Single Stock Trader

Last night I said VZ was looking toppy and indeed it fell 0.46% on Tuesday but the indicators are still overbought so I think there's still more downside to come.

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