Thursday, April 30, 2015

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower....
  • ES pivot 2100.67.  Holding below is bearish.
  • Friday bias lower technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

Well that was sure a non-event.  The Fed announcement at 2 PM Wednesday wasn't even the biggest mover of the day.  And when all was said and done the Dow ended down 75 points marking the fourth up/down daily alternation in a row.  I'll be really happy to see the end of April so let's just see what Thursday has in store.

The technicals

The Dow:  The Dow on Wednesday put in its seventh reversal warning in a row - with no reversal happening.  This is getting to be rather frustrating.  This time we got a second hanging man in a row.  We have overbought indicators and a bearish stochastic crossover but none of that has been working all month.  Will the end of April be any different?

The VIX:  On Wednesday the VIX put in a textbook-classic long-legged doji star above Tuesday's decline.  So with the VIX only now just off oversold we at least have a warning of a move lower but not a good one.  At the risk of sounding like a broken record, this requires confirmation,

Market index futures: Tonight, all three futures are lower at 12:16 AM EDT with ES down 0.05%.  ES put in its fourth day in a row of alternating gains and losses on Wednesday though each day featured lower highs and lower lows.  That's got the indicators finally off overbought though it also dropped ES out of its rising RTC for a bearish setup.  All in all this chart looks more negative than positive a the moment.

ES daily pivot: Tonight the ES daily pivot falls from 2104.25 to 2100.67. That still leaves ES below its new pivot so this indicator turns bearish from last night.

Dollar index:  The dollar is now in a downtrend apparent even to Stevie Wonder, falling all the way back on Wednesday to where it was on February 26th as it continues to cascade down its lower BB.  Indicators are now majorly oversold with RSI at 1.52, its lowest level since September 18, 2013.  But note that back then there was still another whole month of downside to come.  So is this the end of the current downtrend?  Can't say just yet.  This is one falling knife I'll take a pass on.

Euro:  Meanwhile, the euro had a great day, closing at 1.1118, punching right up through its upper BB for its best close since March 4th.  But the indicators are now massively overbought.  RSI just hit 100 - it doesn't go any higher than that.  That all makes the euro look ripe for some profit-taking on Thursday.  Just look at the chart - would you rather be buying here or selling here?  QED.

Transportation:  The trans got hit hard on Wednesday, down triple to loss of the Dow and saved only by their 200 day MA.  The indicators are now off overbought and the last time we were here the trans rebounded the next day.  But that's  a crap shoot at this point.  I can't call this one.


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      2      8       7           0       0.200   -194

     And the winner is...

I'm so tired of being wrong essentially all month long I just want to call Thursday uncertain.  But the preponderance of technical evidence looks bearish so I guess I'll just close my eyes and call Thursday lower.

Single Stock Trader

Well VZ finally put an end to5 a six day winning streak proving that the longer it goes on the less likely you need to get on board.  And with a perfect doji star sitting on its upper BB we have a good sign of a move lower next.  I'd not buy here.

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