Wednesday, June 24, 2015

Wednesday dependson ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher only if ES stays above its pivot, else lower.
  • ES pivot 2116.08.  Current ES direction uncertain..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ still not a swing trade buy.

On Tuesday the market advanced again  but the stress of pushing past recent resistance was evident as the Dow fell back from early gains to finish up just 24 points.  Add in the ongoing Greek drama, Act MCMLXVIII and we have an interesting situation.  Let's see what the chart make of this.

The technicals

The Dow:  The Dow managed to close above recent resistance, just barely but was unable to break intraday highs.  The result was a lopsided green spinning top with indicators just shy of overbought.  It's not a great situation for the bulls.  I'd not be going long right now.

The VIX:  Last night I noted the lower BB touch for the VIX and suggested that might mean higher from there.  But in closing I also noted that this wasn't a given.  And indeed on Tuesday the VIX revisited and closed below its lower BB for a 5% gap-down loss stopping right on two month-long support.  This now looks like an even better reversal case for Wednesday.

Market index futures: Tonight, all three futures are essentially flat  at 12:46 AM EDT with ES down a single tick.  ES did attempt to move higher on Tuesday but the 2021 area remains a sticking point.  Right now it's gone overbought and with a dark cloud cover forming beside Monday's spinning top, the whole chart is looking tired.

ES daily pivot: Tonight the ES daily pivot rises  again from 2112.75 to 2116.08. But that leaves ES sitting smack dab exactly on top of the new pivot so until it decides which side of the fence to fall on, this indicator is a toss-up.

Dollar index:  Holy moly!  Last night I did write that "there now seems to be more upside potential here than downside risk" but I sure wasn't expecting a monster 1.20% gap-up moonshot.  That popped the dollar right out of its month-long descending RTC for a bullish setup even as the indicators are only just off oversold.  But with such a yawning chasm now below us, I need to wait as see if the buck is going to retrace on Wednesday or not.

Euro:  And of course the euro on Tuesday correspondingly took a big dump, all the way back to 1.1180,  falling right out of its rising RTC for a bearish setup, and sending the indicators all on their way towards oversold.  There's a bit of a rally going on in the overnight but it has the feel of a DCB to it.  The euro might close higher on Wednesday but I'm not expecting a major retracement.

Transportation:  And finally in a bit of bearish divergence the trans started looking toppy on Tuesday with a 0.15% drop on a day the broader market was higher.  A tall inverted hammer unable to close above Tuesday's candle nearly touched their upper BB and left the stochastic about to form a bearish crossover.  So this chart is looking lower for 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        6      5       5           2       0.615    581
June       7      4       3           3       0.714    311

     And the winner is...

Tonight the charts are showing some signs of toppiness but not enough to just go ahead and call the market outright lower.  But with ES sitting on top of its pivot, it's a perfect time for a conditional call.  It goes like this: if ES breaks higher (above its pivot) by mid-morning Wednesday, then we'll close higher.  And if it falls below the pivot, we close lower.  Doesn't always work, but it's all I've got.  I think Greece is going to be running the market until the end of the month anyway.

Single Stock Trader

On Tuesday VZ rose again a bit bu on an inverted hammer that formed a bearish stochastic crossover.  It's definitely not a swing trade buy at this point.

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