Wednesday, April 1, 2015

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2064.58.  Holding below is bearish
  • Rest of week bias higher technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ now uncertain.

Though my official call was uncertain I did last night express my bias to the downside and that's where the Dow went to close out the quarter, off 200 points.  We now look ahead to April, no fooling.

The technicals

The Dow:  The primary effect of Tuesday's downturn was to stunt what looked like the beginning of another cycle up as RSI turned lower and the stochastic's bullish crossover flattened out.  And the candle is a bearish harami so Wednesday's not looking all that promising right now.

The VIX:  I was wrong about the VIX last night.  The hammer prevailed and the VIX moved higher Tuesday despite being overbought, on a bullish setup from a descending RTC exit punching back up through its 200 day MA   That now becomes support, though the candle was a spinning top indicating a lack of conviction here.

Market index futures: Tonight, all three futures are lower at 12:27 AM EDT with ES down 0.79%.  On Tuesday ES was unable to capitalize on Monday's gains and in fact put in a bearish harami.  And the decline in the overnight has just canceled Monday's bullish stochastic crossover, turning it into a bearish one from a low level.  These are rare events and generally not good.

ES daily pivot: Tonight the ES daily pivot falls from 2068.17  to 2064.58.  That now puts ES below the new pivot and so this indicator turns bearish.

Dollar index:  It was good I waited for confirmation of Monday's suspected evening star since it didn't come.  Instead the dollar gapped up again and put in yet another star leaving us right back where we were, once again needing confirmation before making any calls.  One thing's clear - we're now in a new rising RTC.

Euro:  And similarly the euro remains in a descending RTC, closing back down to 1.0754 on Tuesday.  We didn't reach parity in March but that's still on the table for sometime this year.

Transportation:  The trans mirrored the Dow on Tuesday so they're not looking so hot either right now.


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

     And the winner is...

April is generally bullish and the first day of April is traditionally quite bullish.  But right now that's about the only thing it's got going for it.  The futures are looking fairly ugly in the overnight, no doubt on late news that the Iran nuke talks are on the rocks, and the rest of the charts are indecisive at best.  So despite it being the first,  I'm going to have to call Wednesday lower.  Perhaps I will be Fooled.

Single Stock Trader

I was a bit surprised to see VZ drop right back through its 200 day MA on Tuesday.  Chalk it up to end-of-quarter shenanigans I guess.  It does call into question whether VZ has the chops to put in a further advance so I'm going to hold off on this one for now.

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