Wednesday, May 20, 2015

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2126.58.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

Well this was probably the biggest snoozer of a record breaker in history.  The Dow hit new highs but ended up just 14.  What does it all mean for Wednesday?  Let's check it out.

The technicals

The Dow:  On Tuesday the Dow continued to play tag with its upper BB ending with a perfect spinning top.  Add in an RSI that's still overbought but now off its peak and a fresh bearish stochastic crossover and I'd say the Dow's next move is lower.

The VIX: Last night I was leery of relying too much on the VIX and indeed on Tuesday once again we saw a VIX rise on a day when the Dow was higher too.  Oddly enough we now have four red candles in a row for the VIX.  We're still just off YTD support and the indicators are still oversold so I still have to think the VIX goes higher from here.

Market index futures: Tonight, all three futures are lower at 1:12 AM EDT with ES up  0.04%.  After touching new highs on Tuesday and punching through its upper BB, ES fell back to end with a red spinning top and a reversal warning.  Indicators are now quite overbought and we've got a new bearish stochastic crossover.  And with the overnight looking anemic I'd guess the Wednesday's looking lower.

ES daily pivot: Tonight the ES daily pivot rises from 2122.33 to 2126.58. But that gain was enough to put ES back below its new pivot so this indicator goes back to bearish.

Dollar index:  Holy moly, after a decent gain on Monday the dollar just exploded on Tuesday with a giant skyrocket gap-up 1.16% pop for a descending RTC bullish trigger.  The recent downtrend is now dead.  And indicators are still not overbought so more upside is possible, assuming the dollar doesn't want to take a rest after such a big move.

Euro:  And last night I wrote that the euro "looks lower again Tuesday".  That was looking good as the euro took an even bigger dump than Monday to close at 1.1159m right on recent support.   And the selling's still not over according to the overnight as the indicators are still nowhere near oversold.  Look for support to fail on Wednesday and another lower close.

Transportation:  Here's some bearish divergence - on Tuesday the trans were unable to capitalize on Monday's 200 day MA breakout, falling right back through it for a big 0.75% loss that erased all of Monday's gains.  That looks quite bearish to me so I think the trans go lower 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        5      3       3           2       0.727    428

     And the winner is...

It's feeling more like the dog days of August than the middle of May lately.  I don't know if all the Byg Wygs have already helicoptered off to the Hamptons for next week's holiday or what but we've now had three days of next to no action at all.  And I'm not expecting much different for the rest of the week.  Technically things are looking just bearish enough for me to call Wednesday lower but I'm not looking for any major moves.

Single Stock Trader

Last night I said I still wasn't in on VZ and it lost another nickel on Tuesday.  But this one was on a hammer with oversold RSI.  The stochastic though made a bearish crossover so I'm still not in.

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