Actionable ideas for the busy trader delivered daily right up front
- Thursday higher.
- ES pivot 2115.50. Holding above is bullish.
- Rest of week bias lower technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ now close to a swing trade buy.
Whew - I think it was a really good idea to call Wednesday uncertain because although there was nothing bullish in the candles, the Dow managed a 121 point gain anyway. So what's next? Let's look for answers in the charts.
The Dow: With its big move lower on Tuesday the Dow looked ripe for a bounce on Wednesday. But you know the old saying - never buy something just because it's down. So I took a pass and indeed the Dow retraced about 2/3 of its losses on Wednesday with a 121 point gain. That sent RSI higher from oversold and flattened out the stochastic in preparation for a bullish crossover. So at this point, this chart now looks higher.
The VIX: After a truly breathtaking pop on Tuesday, the VIX was not only unable to keep it going but it lost 5.62% on a bearish engulfing pattern that makes more downside on Thursday look likely.
Market index futures: Tonight, all three futures are lower at 12:11 AM EDT with ES down 0.06%. ES did quite well on Wednesday retracing most of Tuesday's losses in a move that arrested the descent of the indicators and moved the stochastic into position for a bullish crossover. The bullish harami makes me think more upside might be coming. But the lack of follow-through in the overnight is certainly a note of caution.
ES daily pivot: Tonight the ES daily pivot rises from 2109.33 to 2115.50. That means ES is now above hte new pivot so this indicator goes back to bullish.
Dollar index: This is why we wait for confirmation. On Tuesday the dollar looked ripe for an evening star with a big yawning gap to fill. Instead on Wednesday it moved even higher. Admittedly not by much and with a red spinning top, and hugging the upper BB, but it wasn't a loss. Still with the indicators now crazy-overbought I'm really thinking we're going lower on Thursday.
Euro: Now this is interesting. On Wednesday the euro put in a small green spinning top trading mostly under its lower BB to arrest its seven day-long slide. That was enough to give us a bullish setup on a falling RTC.and with the indicators all highly oversold I'd not be surprised to see the euro move higher on Thursday.
Transportation: After a big week-long blood-letting, the trans finally managed a non-trivial gain on Wednesday, retracing most of Tuesday's losses and clawing off the lower BB, right up to the edge of their descending RTC for bullish setup. Throw in a nascent bullish stochastic crossover and this one looks higher for Thursday.
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 6 4 5 2 0.667 618
And the winner is...
Despite a move lower in the futures in the overnight, the rest of the charts look just sufficiently bullish for me to go out on a limb and call Thursday higher.
Single Stock Trader
VZ continues to play it coy. It gained a bit on Wednesday but with a second spinning top in a row, this one a bullish harami. Still with indicators remaining oversold, I think this one might be worth looking into. It's not the ideal setup but it has possibilities.