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- Tuesday lower.
- ES pivot 2102.33. Holding below is bearish.
- Rest of week bias lower technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ still not a swing trade buy.
I was right last night in refusing to call the market higher despite a dearth of bearish signs. Turns out record high Dow resistance was too much for it this time sending stocks lower though a bit more than I'd expected. Anyway, let's see how this sets up for Tuesday as yet another op-ex week rumbles on.
The Dow: On Monday the Dow dropped 86 points stopping right about recent support at 18,110. But indicators are now nearly overbought , we closed at session lows, we've bounced off the upper BB and the candle is real close to a dark cloud cover so I'm not optimistic on this chart for Tuesday.
The VIX: And the VIX on Monday began filling in Friday's huge gap down with a 7.7% advance establishing Friday's 1.286 close as new support. Indicators are only recently off overbought but the VIX may be wanting to do some more gap-filling Tuesday.
Market index futures: Tonight, all three futures are lower at 12: 26 AM EDT with ES down 0.05%. On Monday ES retraced about half of Friday's gains with a classic dark cloud cover. With indicators close to overbought that makes this chart look bearish again for Tuesday. The lack of enthusiasm in the overnight tends to support that view.
ES daily pivot: Tonight the ES daily pivot ticks up from 2102.00 to 2102.33. ES is now below the new pivot so this indicator turns bearish.
Dollar index: Last night I wrote that "this chart look continued higher for Monday" and so it was, up another 0.20% but on a gap up little red spinning top. That's 2/3 of an evening star. It's still too early to call a move lower particularly since the indicators aren't yet overbought but I'd definitely not be buying dollars at this point.
Euro: And last night of the euro I also wrote "it looks like a lower close on Monday." And that was right too, leaving the euro now back down to 1.1161 with three black crows and a new descending RTC. But the euro seems to be finding some support it he overnight so I hesitate to call it lower again on Tuesday.
Transportation: Last night I turned on the yellow caution light based on the inverted hammer and that was confirmed Monday as the trans fell 0.14% on a second, taller inverted hammer. It also just exited a steep short rising RTC for a bearish setup. That all makes it look like there's still more downside left here.
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 3 1 1 2 0.833 411
And the winner is...
Last night I wasn't sure the market could push past resistance but also didn't see much in the way of bearishness. Tonight I'm even less sure the market can push past resistance but I'm starting to see some bearish signs. So I'm going to go ahead and call Tuesday lower. I'll be happy to be proven wrong.
Single Stock Trader
As I suspected last night, VZ came in on Monday completing a bearish evening star that trumped the bullish stochastic crossover. And I don't think it's done going down so still no buy call here.