Wednesday, June 3, 2015

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher.
  • ES pivot 2105.58.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ near a swing trade buy.

Last night I made a conditional call, the condition being ES managing to get above its pivot by mid-morning in order for the market to close higher.  Well it did make a breakout but it wasn't til noon which was too late and the market did indeed close lower.  This doesn't always work but it works often enough to keep in the toolbox.  So on we go to Wednesday to see what's what.

The technicals

The Dow:  On Tuesday the Dow put in a nice doji star at the lower end of Monday's big dump.  That's a decent reversal sign modulo the indicators which are still aways from oversold.  So I'd prepare for a reversal, though it's not a given at this point.

The VIX:  Well I was certainly wrong about the VIX on Tuesday.  It did not go lower on a spinning top, instead it rose another 1.93% - on a second spinning top!.  But this one very nearly touched both its upper BB and 200 day MA, coincidentally both around 15.20 before falling back.  That, along with now overbought indicators is a decent topping sign in my book.

Market index futures: Tonight, all three futures are higher at 1:38 AM EDT with ES up  0.09%.  On Tuesday ES followed Monday's spinning top with another, even larger spinning top.  There's no guidance from that but I do note a stochastic about to form a bullish crossover and the overnight seems to be supporting that, at least for now.

ES daily pivot: Tonight the ES daily pivot falls  from 2109.08 to 2105.58. And that was enough to put ES back above its new pivot so this indicator turns back to bullish again.

Dollar index:  The dollar got hammered on Tuesday with a tall gap-down 1.63% marubozu that sent the indicators off overbought and moving towards oversold.  Nothing bullish on this chart.

Euro:  And correspondingly the euro had a major boost on Tuesday taking me completely by surprise to close back to 1.1169.  Indicators continue to rise but are still a ways from overbought so this one looks like it's still got room to run.

Transportation:  The trans have seen a week of choppy losses that have been dribbling down the lower BB.  Tuesday may have been the end as the trans rose in a bit of bullish divergence on a day the rest of the market was down.  It was a spinning top but also a bullish trigger on a falling RTC exit.  We also got a bullish stochastic crossover so I'd hazard this one looks higher 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       1      0       0           1       1.000     30

     And the winner is...

Hmm, the crystal ball isnt' 100% clear but what I am seeing is signs of a reversal so I'm going to go out on a limb and call Wednesday higher.

Single Stock Trader

Lat night I still wasn't ready to get onboard VZ and good thing too because it was down again on Tuesday.  This time with a spindly spinning top that just about touched its 200 day MA before bouncing off.  We remain in a downtrend but the indicators are getting quite oversold.  These are levels from which reversals happen but I'm still a bit cautious here.  If it's not going lower again at the open on Wednesday, it might be worth putting on a small position.

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