Tuesday, May 5, 2015

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher only if ES remains above its pivot, else lower.
  • ES pivot 2107.42.  No prediction..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

Last night I opined that "Monday could be a doji day.".  That certainly seems to have been the case as the Dow rose 46 points on an inverted hammer.  It's an interesting pattern so let's take a closer look, chartwise.

The technicals

The Dow:  OK, so the inverted hammer is one thing but we also got a completed bullish stochastic crossover around levels from which the market has then proceeded higher.  But we did nearly touch the upper BB, so I'm going to say that's a wash and we're just waiting to see which side of the fence this one's coming down on.

The VIX:  The VIX had one of those odd days where it gained 1.18% Monday but on a red candle.  Last night I thought we'd move lower but Monday's candle still makes me think that, especially now that we've got a bearish stochastic crossover going.

Market index futures: Tonight, all three futures are lower at 12:37 AM EDT with ES down 0.07%.  ES had a decent day on Monday, pushing right up to its record resistance before falling back a bit.  But that leaves the indicators in disarray, with money flow and the stochastic rising but RSI and momentum falling.  That makes this chart too tough for me tonight.

ES daily pivot: Tonight the ES daily pivot rises from 2094.83  to 2107.42.  That leaves us in the rare position of ES sitting right on top of its new pivot therefore this indicator is mum tonight, neither bullish nor bearish.

Dollar index:  Last night I wrote of the dollar, "there's plenty of room to run higher here."   And so it did, up another 0.20% Monday to trade outside its descending RTC for a bullish trigger.  It's a small hanging man but with indicators still oversold I'd say more upside isn't out of the question here.

Euro: And the euro similarly fell on Monday, down to 1.1145 just outside its rising RTC for a bearish setup.  With a completed bearish stochastic crossover, indicators still overbought but now falling and an overnight move lower, I'd say the euro's closing lower on Tuesday.

Transportation:  On Monday the trans put in a giant gap-up evening star but also completed a bullish stochastic crossover.  Eh?  Ya got me there, pal.  I don't know what that's all about.


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        2      0       0           0       1.000    230

     And the winner is...

Tonight we're seeing some conflicting signs in the charts and that's reflected in ES which is sitting right on its new pivot.  So that sounds like a perfect chance to make a conditional call: if ES breaks above its pivot and remains there by mid-morning Tuesday, we close higher.  If it falls off below the pivot, we close lower.

Single Stock Trader

VZ stubbornly refuses to fall but still only managed a meager 11 cent gain on Monday with yet another reversal warning candle.  So basically nothing's changed and we just continue to wait for a suitable entry point.

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