Actionable ideas for the busy trader delivered daily right up front
- Thursday uncertain.
- ES pivot 2098.33. Holding above is bullish.
- Rest of week bias higher technically.
- Monthly outlook: bias lower.
- Single stock trader: VZ now a swing trade hold.
The market popped nicely on Wednesday with a broad-based advance as the Dow gained 236 points. Now this definitely changes the picture so let's query the charts and see what they have to say.
The Dow: Last night the Dow was showing the perfect setup for a rally with a tall doji star sitting on it slower BB with oversold indicators. And sure enough on Wednesday we got a big pop to propel the Dow right out of its descending RTC for a bullish setup and its best day in over a month. There';s nothing bearish about this other than the fact that the Dow usually likes to rest up a bit after a big move up and I think hat may be entirely possible here.
The VIX: Last night I wrote that " there's no reason to believe the VIX selling is done yet." And that was true, with the VIX dumping 8.64% in Wednesday with a gap-down marubozu that drove the indicators off overbought and rejecting the 200 day MA in a big way. And that still leaves nothing bullish to be seen on this chart.
Market index futures: Tonight, all three futures are lower at 1:21 AM EDT with ES down 0.11%. On Wednesday ES had its best day since April 6th to zoom right out of its descending RTC for a bullish setup. The bullish stochastic crossover is now complete, Tuesday's doji is confirmed, the bounce off the lower BB is confirmed, all the indicators are rising off oversold so there's really nothing technically bearish here.
ES daily pivot: Tonight the ES daily pivot jumps from 2077.83 to 2098.33. But even that move wasn't enough to put ES below its new pivot so this indicator remains bullish.
Dollar index: Last night I mentioned support as being the dollar's only savior and on Wednesday that gave way like a balsa wood bridge with a gap down star for a half-percent loss. But with indicators now oversold this is 2/3 of a bullish morning star so we need to see how this ends. I wouldn't go short the dollar right now though.
Euro: Huh - I didn't think the euro could do it but on Wednesday it rallied to break resistance and close at 1.1317. But is was on a tall lopsided spinning top, almost inverted hammer and the new overnight is guiding lower so with indicators continuing overbought I'm still not on board the euro.
Transportation: I don't know why I wasn't willing to commit to the trans last night. On Friday they confirmed Tuesday's hammer with a nice 0.68% jump. The resulting spinning top is misshapen though and the indicators are confused, so once again it's not clear where this one is headed.
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 3 1 1 3 0.857 327
And the winner is...
All the charts are bullish tonight - too bullish. It is of course common for the market to pause after a big run up and this case looks typical. I'm expecting a small move, possibly a doji and as such the logical course of action is to call Thursday uncertain.
Single Stock Trader
I said last night VZ was still worth buying and it did indeed gain a bit more on Wednesday though its backing its way higher, with two successive red spinning tops. But that double spinning top is certainly a warning so I'm moving this one from a buy to a hold.