Wednesday, May 6, 2015

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher.
  • ES pivot 2092.42.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

After nearly touching its upper BB on Monday the Dow was looking toppy to me but not enough for me to mention it.  Too bad too because it took a tumble Tuesday to 17,928.   Ad my conditional call worked.  ES fell below its pivot just before the open and never recovered.  So we continue the choppy trendless action we've seen for a whole month now.  That makes things tough but we keep at it and look ahead to Wednesday, as always.  A big part of staying in the game is staying in the game.

The technicals

The Dow:  Last night I wasn't quite sure what to make of the Dow and it's a shame because we got a triple point dump on Tuesday that confirmed Monday's inverted hammer and sent all the indcators lwoer.  This chart now just looks plain bearish.

The VIX:  And I was sure wrong about the VIX which instead of moving lower jumped a big 11.36% on Tuesday to send RSI nearly overbought.  But the stochastic still hasnt' formed a bullish crossover.  Still, there seems to be enough gas in the tank for another leg higher on Tuesday,

Market index futures: Tonight, all three futures are higher at 12:32 AM EDT with ES up  0.31%.  ES had another nasty fall on Tuesday retracing almost all of the past two days' gains.  The indicators remain confused halfway between overbought and oversold but I'll note that big ES dumps lately have been followed by moves higher.  And the new overnight seems to be supporting that theory.

ES daily pivot: Tonight the ES daily pivot falls from 2107.42 to 2092.42.  That leaves ES just barely below its new pivot so unless it can manage to break above, this indicator continues bearish.

Dollar index:  I got faked out by the dollar on Tuesday as it dropped 0.46% with a big bearish engulfing pattern.  That leaves the indicators still oversold.  So candlestick-wise, it looks lower but maybe not by much.

Euro:  And after looking ready to resume its march lower, the euro on Tuesday popped right back to where it began on Monday.  With further upside in the overnight, it looks like we may now be in a new consolidation zone around 1.1203.

Transportation:  On Tuesday the trans completed their evening star to fall right back through their 200 day MA ending nearly where they began last Friday,  Burt the indicators remain oversold and the stochastic continues its bullish crossover,  Given that we're sitting on some strong support here I'd venture to guess the trans go higher on Wednesday.


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           1       1.000    230

     And the winner is...

Tonight the charts don't look particularly bullish.  In fact technically they look sort of bearish.  But I'll note that eight of the last nine times we've had big down days in the market the next day closed higher.  And the futures right now seem to be supporting that idea.  And I always hate to contradict the futures.  I figure there's someone out there with more money than me who knows more than I do.  So I'm going with the long shot and calling Wednesday higher.

Single Stock Trader

After spending an entire week congesting around the 50.50 mark, VZ finally broke lower on Tuesday with a tall red marubozu.  Indicators are still just overbought though but they're finally on the move lower.  I expect more selling though so we're still not at a swing entry point.  Patience is the key.

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