Monday, May 4, 2015

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher.
  • ES pivot 2094.83.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

After two days of ugly losses to end April it was gratifying to see my call for a higher start for May last Friday come true.  Of course May is always tricky but we have some tricks of our own up our sleeves so let's check those charts and figure out which way Monday's headed.

The technicals

The Dow:  On Friday the Dow gave us a big inside harami and a stochastic that's curving around for a bullish crossover and sent all the indicators higher.  It requires confirmation but this might be a sign of a move higher.

The VIX:  Last Thursday night I noted that this VIX touching its upper BB was "a reversal sign worth watching.".  And indeed it was as the VIX dropped a big 12.71% on Friday.  The double touch of the 200 day MA and the upper BB is always a good sign of a move lower..  But even that didn't form a bearish stochastic crossover and the indicators are still a long way from oversold so there's still room to run lower here.

Market index futures: Tonight, all three futures are lower at 12:54 AM EDT with ES down 0.06%.  ES did well on Friday with a bullish one white soldier that was enough to set up a bullish stochastic crossover too, thought that is now in jeopardy from the slight overnight sag we're getting.  So this chart is only weakly bullish at this point.

ES daily pivot: Tonight the ES daily pivot jumps from 2083.75 to 2094.83. That now puts ES back above its new pivot so this indicator turns bullish.

Dollar index:  Last Thursday night I wrote "I'd have to hazard that the next move is higher.".  Good guess too because on Friday the dollar snapped a six day losing streak to pop out of its steep descending RTC.  We remain quite oversold so there's plenty of room to run higher here.

Euro:  And last Thursday night I also wrote of the euro, "This one looks ripe for a fall any day now".  Ad the very next day the euro fell back to 1.1198 on a bearish inverted hammer harami to break a seven day winning streak.  It's still in a rising RTC, just barely, but indicators have now peaked at overbought and the overnight is guiding lower so I'd say it looks good for a lower close Monday.

Transportation:  The trans had a great day Friday up 1.68% on a backwards bullish piercing pattern that punched through their 200 day MA, sent the indicators higher after hitting oversold and curved the stochastic around in preparation for a bullish crossover.  That all makes this chart look bullish.


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      3      8       7           0       0.273      1
May        1      0       0           0       1.000    184

     And the winner is...

The overall tenor of the charts is mildly bullish so I guess I'm just going to have to call Monday higher, but more in the absence of any clear bearish signs than the presence of bullish ones.  Monday could be a doji day.

Single Stock Trader

After two matching stars VZ finally put in a clear bearish signal on Friday with a tall hanging man and a stochastic moving lower.  This one looks ready to fall again Monday.

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