Tuesday, April 21, 2015

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher.
  • ES pivot 2089.00.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a swing buy here.

As I was expecting, the markets rebounded nicely on Monday, recouping most of Friday's losses.  Can we keep it going on Tuesday?  Let's check the chart and find out.

The technicals

The Dow:  On Monday the Dow put in the mother of all bullish haramis to very nearly claw its way back into its most recent rising RTC,  That also stopped a decline in the indicators and sent them rising again.  What a difference a day makes - now all of a sudden this chart looks bullish.

The VIX:  Last night I wrote "I'd give better than even odds this one goes lower on Monday".  Regrettably there were no takers and the VIX dropped 4.25%.  That now completes a classic bearish evening star so the VIX is looking lower again on Tuesday.

Market index futures: Tonight, all three futures are higher at 1:29 AM EDT with ES up  0.24%.  On Monday ES gave us a bullish inside harami that cause the indicators to reverse course and move higher before ever reaching oversold.  And there's positive overnight pin action so there's a fair chance of more upside to come on Tuesday.

ES daily pivot: Tonight the ES daily pivot rises from 2080.58 to 2089.00. That still leaves ES above the new pivot so this indicator continues bullish.

Dollar index:  Last night I wrote "I'd say the dollar is due for a bounce, maybe Monday" and Monday it was with a 0.46% gap-up doji star that put the stochastic in position for a bullish crossover.  Unfortunately, the star requires confirmation, so no call here tonight.

Euro:  And last night I also wrote of the euro "there's a warning here of a move lower on Monday".  And that warning came to pass with a great big bearish engulfing candle that drove the euro right back down to 1.0744 and out of its rising RTC for a bearish setup.  the new overnight is lower still and that just gave us a bearish stochastic crossover so I'd say the euro goes lower again on Tuesday.

Transportation:  Whoa!  I wasn't expecting that.  On Monday the trans just shot up 1.69% blasting right back through their 200 day MA and stopping only at resistance at 8792 but also forming a bullish stochastic crossover from a high level.  That's generally a good sign of at least one further day of gains.


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      5       3           0       0.286      5

     And the winner is...

Technically speaking the charts are looking fairly bullish tonight, enough so for me to call Tuesday higher.

Single Stock Trader

On Monday VZ got swept up in the rest of the market hoopla and popped back above its 200 day MA.  I'm sorry though, I still can't get on board this narrow ping-pong match.  I need to see a trading extreme before calling it a buy (or a sell for that matter).  The stochastic reflects this indecision, having now spent an entire week halfway between overbought and oversold.  That ain't for me, Jack.

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