Thursday, April 9, 2015

Thursday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher if ES stays above its pivot, else lower.
  • ES pivot 2073.58.  Holding above is bullish
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a buy..

I think I was right to call Wednesday uncertain since we finished with just a 27 point gain in the Dow on a spindly spinning top that continues to indicate indecision in the market.  The Fed minutes didn't help much either.  Some people want  rate hike in June, some in September, and some not til 2016.  Who knows.  I have my hands full just worrying about the charts.  So let's take a peek at them right now and see what's what.

The technicals

The Dow:  After a tall inverted hammer on Tuesday we got anther reversal candle on Wednesday in the Dow.  With indicators now nearly overbought it looks like the Dow is signaling an impending move lower here.

The VIX:  For the second time in a week, the VIX has given us some divergence, this time falling  significant 5.41% on a day the rest of the market rose  That now makes four read candles out of five and three lower highs and lower lows in a row  But indicators are still not yet oversold.  I thought after yesterday's hammer we'd see a move higher but I was wise enough to mention that this required confirmation - which we did not get.  So now it's looking lower again until we see some sort of bottoming candle.

Market index futures: Tonight, all three futures are lower at 12:12 AM EDT with ES down 0.06%.  On Wednesday, ES disconfirmed Tuesday's spinning top with a decent gain though it's still having trouble with resistance around 2077.  Indicators are now near overbought so it's not clear there's enough gas in the tank to make much more headway on Thursday.  And the overnight isn't showing much enthusiasm at this point either.

ES daily pivot: Tonight the ES daily pivot rises a tad from 2072.17 to 2073.58.  That leaves ES above the new pivot but just barely so this indicator is now only weakly bullish.

Dollar index:  Last night I wrote of the dollar "[a bunch of technical jargon] all looks positive for Wednesday.".  And whadaya know, the dollar rose with a big green candle belying the small 0.06% gain.  This bullish engulfing pattern also gave us a bullish stochastic crossover so I'd say it looks good for more upside on Thursday.

Euro:  Last week some idiot money manager at a place whose name I will not mention, except that their initials are Wells Fargo, told me  that he couldn't predict the future and I couldn't either.  Well as far as the euro on Wednesday goes, he was half right because last night I wrote "the daily outlook for Wednesday is lower."  And just like that the euro took another leg down to close at 1.0808.  OK, it was a spindly spinning top but the new overnight is disconfirming that and moving lower once again.  Indicators are still a ways from oversold so I epect a retest of last month's lows at 1.0733 in short order.

Transportation:  After a decent 071% gain Wednesday the trans are now in a new rising RTC that stopped just short of their 200 day MA.  But with a bullish trigger on a descending RTC exit, a bullish stochastic crossover and  indicators still just barely off oversold there seems to be plenty of gas in the tank for another move higher 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      7      6       5           4       0.647    976
April      1      1       2           0       0.500    -40

     And the winner is...

Once again we have some sort of wishy-washy charts that seem to be wanting to do something, only they're not quite sure what it is.  Well that seems to call for another conditional call: if ES manages to remain above its new pivot by mid-morning Thursday, we'll close higher.  If on the other hand it drops below the pivot and stays there, we close lower.

Single Stock Trader

Huh - I wasn't expecting VZ to claw its way back above its 200 day MA on Wednesday after opening below it.  But it's still a bearish exit on the rising RTC and a bearish stochastic crossover, so I'm still on getting on board at this point.

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