Tuesday, May 26, 2015

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower.
  • ES pivot 2126.08.  Holding below is bearish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a swing trade buy.

I hope everyone had a safe and relaxing Memorial Day weekend as we took time out from our daily activities to honor those who gave their lives for our country.  But now it's time to get back to work.  We note a disappointing, Fed inspired decline last Friday and check the charts to see how that may affect this holiday-shortened week.

The technicals

The Dow:  With three down days in a row and indicators only just now moving off overbought it looks like there's still more downside available here for Tuesday.

The VIX:  Meanwhile the VIX continues to hover just barely north of 12 near yearlong support.  With a hammer on Friday and oversold indicators it looks primed for more upside.

Market index futures: Tonight, all three futures are lower at 12:32 AM EDT with ES down 0.20%.  On Friday ES put in a dark cloud cover that started the indicators moving lower from an overbought peak.  The overnight is confirming that so I'd say this chart looks lower for Tuesday.

ES daily pivot: Tonight the ES daily pivot rises from 2125.00 to 2126.08. After falling below the old number ES remains well below the new pivot so this indicator turns bearish.

Dollar index:  The dollar took a huge pop on Friday with a big green bullish engulfing marubozu that took the indicators clear to overbought but still short of the upper BB.  So in the absence of a bearish candle I'd have to think the dollar could go higher again Tuesday.

Euro:  And the euro disconfirmed Thursday's bullish piercing pattern with another leg down on Friday.  And with the Sunday overnight the gapping down huge, already to the lower BB at 1.0942 it looks like a lower close on Tuesday, though most of the damage is probably already done.

Transportation:  And finally here's an ominous sign - on Friday the trans dropped a big 0.81%, far more than the rest of the market.  And they gave away support at 8802 with indicators hovering just above a lower BB that's now dropping away.  That all looks fairly negative in my book.


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        5      4       4           2       0.667    428

     And the winner is...

The first day after a long weekend holiday is always problematic to call.  However, tonight the charts are all pretty much in agreement and the verdict is bearish so I'm calling Tuesday lower.

Single Stock Trader

VZ got caught up in the general negativity on Friday and moved lower.  With two inverted hammers in a row and indicators no longer oversold this stock is no longer a swing buy.

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