Friday, July 31, 2015

Friday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday lower.
  • ES pivot 2098.58.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ no longer a swing trade buy.

I'll admit I was a bit surprised at the Dow's failure to push past its 200 day MA on Thursday.  And that's something of a concern.  So let's take a look at the charts to see how Friday's going to play out as we bring the month of July to a close.

The technicals

The Dow:  On Thursday the Dow sank right out the gate and spent the rest of the day clawing its way (almost) to break-even.  The resulting hanging man was latched to the 200 day MA like a stalactite.  The strength of the MA resistance took me by surprise and is a bad omen in combination with a reversal candle.

The VIX:  The VIX fell some more on Thursday making it three down in a row as it remains in a descending RTC.  It's now very near support at 11.84, though in the absence of a reversal candle or oversold indicators it's too soon to call a move higher just yet.

Market index futures: Tonight, all three futures are lower at 12:14 AM EDT with ES down  0.07%.  ES made it three up in a row on Thursday but with a classic hanging man.  However, we remain in a new rising RTC ad the indicators are still a fair way from overbought.  But we also have some resistance around 2105 and the overnight doesn't seem interested in taking that on.  So I can't really call this one higher again on Friday.

ES daily pivot: Tonight the ES daily pivot rises again from 2096.75 to 2098.58.  ES remains above its new pivot so this indicator continues bullish.

Dollar index:  I didn't call this chart last night and it's just as well because I sure didn't see a 0.64% gap-up spinning top coming.  That bounced it right out of its descending RTC for a bullish setup but also formed 2/3 of a bearish evening star.  But indicators continue to rise being just off oversold.  So with mixed messages this chart continues to be too tough for me to call.

Euro:  Last night I wrote that "it looks like the selling's not over yet".  And it wasn't with the euro now back down to 1.0924.  It was also a bearish trigger on a rising RTC exit.    And indicators have yet to hit oversold.  However, the euro seems to be staging a non-trivial late-night rally so I'm reluctant to call it lower on Friday.

Transportation:  The trans ran out of gas on Thursday after two big up days with a 0.02% loss and a small hanging man.  With indicators now nearly overbought and a ricochet off the upper BB this is a yellow light for a move lower on Friday.  Definitely not a buy here.


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       8      6       3           4       0.706    552
July       9      1       5           4       0.929   1156

     And the winner is...

While we don't have any overtly bearish signs on the charts tonight we do have a bunch of reversal warnings,though they require confirmation.  And we're also right at several S/R lines too.  In addition, the last day of July is historically quite weak, according to The Stock Traders Almanac.  And with two days of nice gains in hand, traders may want to book some profits to help out their July numbers and avoid being long over the weekend.  So I'm going to go out on a limb and not wait for the bearish confirmation  on the charts and instead just go ahead and nervously call Friday lower.  I'd love to be proven wrong as I'm always net long.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

On Thursday VZ did gain another 11 cents but on a classic gap-up doji star.  I'd put stops under any profits at this point and definitely wouldn't be getting on board from here.

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