Tuesday, June 16, 2015

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower.
  • ES pivot 2081.67.  Holding below is bearish.
  • Rest of week bias uncertain  technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ still not a swing trade buy.

Last night things were looking bleak and I called the close for Monday lower.  And sure enough, the Dow ended with another triple digit loss.  This was particularly concerning since it makes a down Friday followed by a down Monday for the second week in a row.  That's a particularly negative pattern.  So keeping that in mind, is there any relief in sight?  The charts will speak when they get good and ready.

The technicals

The Dow:  On Monday the Dow gave us a 108 point drop for a fat hammer but also a bearish stochastic crossover.  There's support at 17,757 that was successfully tested on Monday but with the 200 day MA at 17,633 hoving into view I'd expect a retest.  This pattern is certainly not bullish.

The VIX: Last night I wrote of the VIX that "more upside is possible Monday."  And it came to pass, with a giant 11.68% gap-up pop that blasted it right through its 200 day MA.  But in the end it was a classic hanging man looking a lot like an evening star in the making.  200 MA hits are the third rail for the VIX and I expect all the bots know it, particularly with a yawning gap now below us..  I'm looking for a move lower on Tuesday.

Market index futures: Tonight, all three futures are lower  at 1:11 AM EDT with ES down 0.17%.  On Monday ES confirmed Friday's spinning top with a 50% retracement of Thursday's gains on a big gap-down hammer that forced a bearish stochastic crossover.  But it also touched the lower BB.  And six of the last six times that's happened, we got a move higher within two days.  That may not be Tuesday though as the overall larger trend remains down and the overnight is sagging.

ES daily pivot: Tonight the ES daily pivot falls again from 2097.50 to 2081.67.  ES remains below its new pivot so this indicator continues bearish.

Dollar index:  Last night I wrote that "there are no bullish signs on this chart tonight."  And what happens in that case?  We go down.  Another 0.14% Monday.  The indicators are all dead in the water and there are still no bullish signs on this chart.

Euro:  Well of course I did miss the euro on Monday which went higher to 1.1297, not lower as I expected.  But that still leaves it in a narrow congestion zone around 1.277, a level we've hit for eight straight days now.  The current pattern, hammer followed by bullish engulfing suggests higher, but tempered by indicators now overbought.  As far as I can tell the euro has a bit more sideways motion to go before a break.

Transportation:  Like the Dow the trans gave us a red hammer on Monday but not quite a bearish stochastic crossover.  Still, this would be an exceedingly risky point to go long the trans.


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       5      1       2           3       0.889    576

     And the winner is...

Well after careful consideration I'm afraid there aren't a whole lot of bullish signs on the charts tonight.  Only the VIX looks bullish on a reversal candle but it could still take one more stab higher before falling back.  So I'm afraid I'll just have to declare Tuesday lower.

Single Stock Trader

VZ just continues to be part of the overall market decline.  It broke support at 47.24 on Monday with a gap-down spinning top so there's just no telling when it might be a buy again.  Short form: stay away.

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