Monday, June 8, 2015

Monday depsned on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday depends on ES pivot.
  • ES pivot 2092.83.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ now a swing trade buy.

After a brief attempt to break above its pivot at 3 AM last Friday, ES never threatened again and the market closed lower as I had predicted with my patented conditional call.  A Friday close lower is a bearish sign and a subsequent Monday close lower would confirm it.  So let's figure out if that's going to happen, pronto

The technicals

The Dow:  The Dow has now been falling basically for two weeks and it finally hit its lower BB on Friday.with a stubby red spinning top that left the indicators oversold, though not wilding so.  That's a reversal sign in my book but one which requires confirmation - falling knife etc.

The VIX:  Last Thursday night I wrote that "200 MA touches usually mark tops for the VIX and this time doesn't look any different."  And that was true, with the VIX falling 3.4% on Friday on a tall red bearish engulfing pattern after making one last stab at its 200 day MA.    And that gave us one of those unusual cases where the VIX and the market were both down the same day.  It was also enough to drive the stochastic lower so overall I'd say the VIX looks lower again on Monday.

Market index futures: Tonight, all three futures are lower  at 12:34 AM EDT with ES down 0.06 %.  On Friday ES gave us a far red spinning top that tested its lower BB and drove the indicators oversold.  The Sunday overnight is doing pretty much the same, with a second unsuccessful test of the BB so there seems to be an attempt at bottoming here.  Whether or not its successful remains to be seen as this sort of action requires confirmation, particularly given the general weakness of the paste two weeks.

ES daily pivot: Tonight the ES daily pivot falls again from 2102.25 to 2092.83. That still leaves ES below its new pivot so this indicator continues bearish.

Dollar index:  As might be expected, the dollar shot up nearly a percent on Friday to bust out of its descending RTC with a bullish setup, form a bullish stochastic crossover, and cause the indicators to bottom at oversold.  That all points to more upside Monday.

Euro:  And just reverse everything above for the euro which is now looking lower again for Monday.

Transportation:  And finally on Friday the trans gave us a bit of bullish divergence by rising a hefty 0.86% on a day the Dow and SPX were both down.  The resulting bullish engulfing candle keeps them in a rising RTC though the indicators have begun moving lower just before reaching overbought.  And with the trans sitting right on three day resistance now, it's not clear they have enough gas in the tank to move higher Monday.


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        6      5       5           2       0.615    581

June       2      0       1           2       1.000     94

     And the winner is...

Much like last Thursday night ES is once again sitting just below its daily pivot with a number of reversal signs present in the other charts.  That makes tonight another candidate for a conditional call.  If ES can break above its pivot by mid-morning Monday we'll close higher.  If not, we close lower.

Single Stock Trader

OK, I was wrong.  Just when I thought VZ couldn't go any lower ... it did, plunging another nearly 2% on Friday.  Holy moly!  RSI has now hit the big Z - that's zero, zilch, nil, nada, the square root of nothing.  The last time RSI was this low, well it isn't even on my chart.  It traded entirely below its lower BB.  If this doesn't dive any further Monday morning, I'm in.

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