Thursday, May 21, 2015

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower.
  • ES pivot 2124.67.  Holding below is bearish.
  • Friday bias lower technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ now a speculative swing trade buy.

Well it was looking good for my call for a lower close on Wednesday - until the Fed minutes came out at 2 PM.  Then Mr. Market went on a bizarre manic tear higher, only to come to his senses an hour later for a 27 point loss on the day.  Made for some nice day trading, but for swing trading well we're still sitting on the sidelines.  And as the Oppressors of the Working Class make up their picnic lists for their weekend in the Hamptons, we expect even less action for the remainder of the week.  Thank God I'm only watching the game and (not even) controlling it.

The technicals

The Dow:  On Wednesday the Dow gave us a second (lopsided) spinning top, this one red, that once again failed to produce a higher high.  That reinforced the bearish stochastic crossover and makes me think there's more downside to come.

The VIX:  After three dojis in a row, on Wednesday the VIX gave us, yes another doji, this one a perfect star.  At this point all that means is that the VIX can't decide which way to go.  With the indicators all depressed I'd guess there's more upside than downside to come but with this snoozer of a week, who knows.

Market index futures: Tonight, all three futures are lower at 12:15 AM EDT with ES down 0.18%.  On Wednesday ES confirmed Tuesday's red spinning top with another spinning top that again touched the upper BB, this one a bit lower.  Indicators remains overbought and the bearish stochastic crossover is now complete so that all looks rather bearish.  The overnight is confirming that with a non-trivial move lower.

ES daily pivot: Tonight the ES daily pivot falls again from 2126.58 to 2124.67.  ES remains well below the new pivot so this indicator continues bearish.

Dollar index:  Hah - just when the dollar looked ready to form a classic evening star it instead moved higher again, this time with a perfect little star that sent the indicators even closer to overbought.  So with that big yawning gap hanging below us I have to think some retracement is due soon.

Euro:  Last night of the euro I wrote "Look for support to fail on Wednesday and another lower close.".  Well it did and we did, back down to 1.1120.  That leaves the euro in a steep descending RTC with falling indicators not yet oversold.  The only saving grace here is a hammer candle but that would require confirmation.

Transportation:  Last night I wrote "I think the trans go lower on Wednesday."  Good thinking too because they dropped nearly 2% handily breaking six month support at 8569 all the way down to their lower BB.  That sent the indicators instantly to oversold but also formed a bearish stochastic crossover.  But given the magnitude of the decline and the BB touch, I'd not be surprised to get a DCB on Thursday.


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        6      3       3           2       0.727    455

     And the winner is...

Meh - things are looking pretty toppy tonight.  I'm just going to go ahead and call Thursday lower.

Single Stock Trader

Interestingly, on Wednesday VZ confirmed Tuesday's hammer for a 14 cent gain and
that trumped a bearish looking stochastic crossover.  It also gave us a bullish setup on a descending RTC exit.  The bad news is that this candle was a tall inverted hammer so that sort of leaves us right back where we were.  I'd call this one a speculative buy at this point but personally I'm still not in.

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