Monday lower

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

• Monday lower.
• ES pivot 2118.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

I didn't call last Friday just because it was op-ex but based on the big gain from Thursday, the puny 20 point advance in the Dow was about what you'd expect.  So nothing ventured, nothing lost.  So let's move on to the third full week of May and see if it's time to sell yet or not.  So far that hasn't been a winner.

The technicals

The Dow:  Last Friday the Dow advanced a bit more but the candle was decidedly bearish - a hanging man and dark cloud cover combined sitting right on the upper BB with overbought indicators cross the board just short of resistance.  That all spells lower in my book.

The VIX:  The VIX meanwhile broke its recent support to close at 12.38 on a gravestone doji with oversold indicators now on YTD support.  I'd have to guess that means higher next.  It did the last time we say this (see 4/24/15).

Market index futures: Tonight, all three futures are lower at 12:42 AM EDT with ES down 0.07%.  ES had a little symmetric spinning top on Friday that just touched its upper BB right at record highs.  That a decent reversal warning and the Sunday overnight seems to be supporting that so I'm not optimistic about Monday.

ES daily pivot: Tonight the ES daily pivot rises from 2109.25 to 2118.33.  And that was enough to now put ES below its new pivot so this indicator turns bearish.

Dollar index:  On Friday the only recently seemingly unstoppable dollar non-confirmed Thursday's fake-out doji with a tall bearish engulfing pattern for a 0.35% loss.  That leaves the indicators still oversold but it also doesn't look like the bottom is in yet.

Oh, and I should add for the benefit of everyone crying about the "strong dollar", I remember the days when a dollar was worth 360 yen and also more than four Swiss francs - and I'm not that old.  So don't tell me the dollar is so "strong".

Euro:  Meanwhile the euro continued its upward course after bottoming last month to close at 1.1442 on Friday and stopping right on YTD resistance.  And that may have been a resistance too far as the overnight is now moving lower again and forming a bearish stochastic crossover to boot.  So the euro might just close lower on Monday.

Transportation:  And finally on Friday the trans confirmed Thursday's hammer with a nice nearly one percent advance.  This tall green marubozu also gave us a bullish stochastic crossover and sent all the indicators higher.  That all looks bullish to me for Monday.

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      3      8       7           0       0.273      1
May        4      2       3           2       0.750    440

     And the winner is...

Aside from the trans, the charts tonight seem to be looking rather negative, so I'm just going to have to call Monday lower.

Single Stock Trader

Last Thursday night I said that VZ was no longer a buy and that was true with an 18 cent drop on Friday on a bearish engulfing pattern.  So tonight it's still not a buy.