Thursday, June 25, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2105.67.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

Bah - those freakin' Greeks continued running our markets on Thursday as news that things were looking grim led to the Dow's worst day in a month.  Meanwhile we have to sit and listen to all the Chicken Littles going "Oh the Chinese are going to take over Greece!" (hah - they're too smart for that). or "A Grexit will give ideas to the rest of the PIGS" (they've already had these ideas).  Puhleeze, can we just get on with it?

Factoids of the week

1. The population of Greece is lass than that of Ohio.

2. In Greece, in the public sector, 7.91% of pensioners retire between the ages of 26 and 50, 23.64% between 51 and 55, and 43.53% between 56 and 61.

The technicals

The Dow:  Last night I wrote "I'd not be going long right now."  Good thing too because on Wednesday the Dow stopped falling only because the bell rang at 4 PM after a 178 point red marubozu.  That was good for a rising RTC bearish trigger and a bearish stochastic crossover.  Aside from the outside possibility of a DCB, there's nothing technically bullish about this char.t

The VIX:  Last night I called for "an even better reversal case [than Tuesday] for Wednesday.".  Well case closed.  The VIX popped right out of its descending RTC for a bullish setup with a 9.5% gain while the stochastic curved into position for a bullish crossover..  Technically this chart just looks higher again on Thursday.

Market index futures: Tonight, all three futures are higher at 12:23 AM EDT with ES up  0.20%.  On Wednesday ES had its worst day since, uh well just three days ago actually.  You can thanks Greece for this series of sudden irrational dumps.  Generally though, sanity seems to return within a day or two so I'd be careful of running for the exits just quite yet.  And some non-trivial gains in the overnight seem to support that idea.

ES daily pivot: Tonight the ES daily pivot falls again from 2116.08 to 2105.67. That still leaves ES below its new pivot so this indicator continues bearish.

Dollar index:  With a giant gap up Tuesday last night I noted the need to wait and see where it would go next.  Turns out it was lower as the big empty space proved too hard to resist.  That's the makings of an evening star so this one looks lower again on Thursday.

Euro:  Last night I wrote that "The euro might close higher on Wednesday but I'm not expecting a major retracement"  And so it did close higher, but only back to 1.1218.  QED.  But now that leaves the indicators wandering around between overbought and oversold.  And with little guidance in the new overnight I'm not touching this one for Thursday

Transportation:  Last night I wrote that "this chart is looking lower for Wednesday."  And that was that as the trans dove 1.86% for their worst day since, oh well we have another ugly day just on June 8th ... and May 20th.  This is getting to be a habit and a worrisome one at that as the talking heads on CNBC are now starting to invoke the Dow Theory.  And with a slow but steady march lower since, well March, it's hard to argue they don't have a point.  The only good thing here is that we're real close to the lower BB and some month-long support.  I'd have to guess the selling's about over, near term.


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       7      4       3           4       0.733    311

     And the winner is...

Although the charts are generally looking bearish on a purely technical basis, the futures seem to be pointing to the possibility of a relief rally once the traders all wake up and discover that the sun is still rising in the east and the sky is still up in the air.  That said, the market is going to be subject to the whims of the current Greek comedy and that's no doubt going to go right down to the wire.  So I'm going to call Thursday cautiously higher with the caveat that it will take just one news release from the ECB, the Greek finance minister, or the Oracle at Delphi to change everything.

Single Stock Trader

VZ of course got pounded on Wednesday along with the rest of the Dow (except for  AAPL which honest to God isn't a "real" Dow stock).  But the damage was done, with a rising RTC exit for a bearish setup and indicators hovering just shy of overbought.  Definitely not a swing trade buy here.

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