Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday uncertain.
• ES pivot 2072.17.  Holding below is bearish
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ moving lower.

Recap

Well that was interesting.  Last night I spent the entire evening figuring out a nasty issue with my PC instead of studying the markets.  I rebooted because it had been an entire month and things were getting pretty slow  But after that I discovered I couldn't open any programs.  I'd click on an icon and nothing would happen.  It took me a long time to realize that something w happening after all, it was just really  s l o w, like 20 minutes to start a program.  Complicating matters was the fact that I couldn't do a System Restore - that was 100% fail.  Finally I figured out that a recent upgrade to ZoneAlarm was the culprit.  I uninstalled that and then life was good again.  Freakin computers!

Anyway we're back baby, so let's see if we can now do some real work instead of wasting time on that nonsense.

The technicals

The Dow:  On Tuesday the Dow put in a rare classic gravestone doji.  With indicators nearly overbought, I'd say this is a good sign of lower to come.

The VIX:  And contrariwise, on Tuesday the VIX rose a scant 0.27% on a nice hammer stopping just under its 200 day MA.  Indicators are closing in on oversold so this is a decent sign of a move higher next, though one that requires confirmation.

Market index futures: Tonight, all three futures are completely unchanged at 12:18 AM EDT with ES, NQ, and YM all dead even.  ES did some retracing Tuesday of Monday's big gain with a bearish inverted hammer.  The indicators are all over the place, some rising, some falling, and OBV continues to be a concern, now running at negative 3M.  Overall though, this chart is too tough to call.  It happens sometimes.

ES daily pivot: Tonight the ES daily pivot rises from 2064.00 to 2072.17.  That move now leaves ES below the new pivot so this indicator is bearish.

Dollar index:  On Tuesday the dollar completed a bullish morning star with  a big 1.12% gap up.  That was enough to cause the indicators to start rising again before even getting near oversold and cause the stochastic to start curving around for a bullish crossover from a high level.  That all looks positive for Wednesday.

Euro:  Monday's doji star for the euro neatly telegraphed Tuesday's decline that brings us right back to 1.0839 and a fresh bearish stochastic crossover.  There's something of a rally going on in the overnight but I think the daily outlook for Wednesday is lower.

Transportation:  After breaking the 200 day MA two days ago on Tuesday the trans gave us some bullish divergence by gaining 0.48% on a day the rest of the market was lower with an inverted hammer following a bottoming spinning top.  With indicators rising but still not yet off oversold, this chart seems  to have more room to run.

Accuracy: 

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       1           0       0.500    -40

Note: I'm not incrementing the counters for days when I wasn't able to put out a post.

     And the winner is...

Hmm, I did a bit of hand-wringing over this one but you know what I'm seeing?  A symmetrical triangle is developing in the Dow and it looks to be near completion so that would be bullish later this week.  But it's not clear there isn't one more leg down coming.  These nervous small-range doji-ish days don't give you much meat to chew on.  I could just go ahead and call it lower but that would just be guessing so officially I'm going to have to call Wednesday uncertain.

Single Stock Trader

OK so let's get caught up here too.  On Monday VZ put in a spinning top warning of an impending reversal.  On Tuesday we got confirmation in a big way with a giant red bearish engulfing marubozu that stopped the indicators' climb just short of overbought.  VZ is definitely not a buy on this chart.