Friday, July 10, 2015


The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher.
  • ES pivot 2049.17.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.

As expected the Dow took off nicely Thursday morning with a triple digit pop.  But as in recent days, it spent the rest of the day retracing.  Is Mr. Market ever going to find the courage of his convictions?  Friday's his last chance this week to prove it.  Let's see what the charts think about it as we continue to thread our way through the Greeks, the Puerto Ricans, the Chinese, the NYSE "glitches", and who knows what else.

The technicals

The Dow:  As we've seen so often recently, all the action happened in the first three minutes of trading and then the Dow spent the rest of the day retracing.  The net result was the mother of all gravestone dojis.  We did manage to finish just off the lower BB and the indicators are still oversold but I can't really call the Dow higher Friday with this sort of indeterminacy.

The VIX:  Last night I wrote "I am very hesitant to call the VIX lower just yet".  Good thing too because on Thursday the VIX gained another 1.58% on an unusual side-by-side matching lines pattern.  And it revisited its upper BB for the fourth time in four days.  I mentioned this last night - the more the VIX hangs around its upper BB, the more it wants to stay there.  So in the absence of a reversal candle this one can't be called lower just yet.

Market index futures: Tonight, all three futures are higher at 12:48 AM EDT with ES up a significant 1.05%.  Last night I wrote that "[o]n Wednesday ES plunged right back to its 200 day MA making the third day in a row that's served as support".  Well you can make it four now as ES put in a tall tall gravestone doji perched right on that MA once again.  But the new overnight is up significantly, on news that Alexis Tsipras went out and bought himself a tie or something like that.  So this one could go higher on Friday.

ES daily pivot: Tonight the ES daily pivot barely dips from 2049.58 to 2049.17. That leaves ES still above its new pivot so this indicator continues bullish.

Dollar index:  The dollar looked lower last night but in the end it wasn't, up 0.33% Thursday.  But with its recent herky jerky action, all news-driven no doubt, there's no telling where it's going Friday.

Euro:  On Thursday the euro gave up most of Wednesday's gains to close at 1.1022.  But then it's right back up to 1.1076 in the overnight as it continues a slow see-saw higher.  We're near resistance around 1.1087 and right now it looks like that level may be tested on Friday.

Transportation:  For the first time in a while the trans outperformed the Dow, up 0.63% on a bullish inverted hammer that kept the indicators moving higher, now just off oversold.  So this looks bullish for Friday.


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       5      0       0           0       1.000    572

     And the winner is...

There aren't a lot of particularly bullish signs on the charts tonight with the major exception of the futures, with ES up a whopping 1% as I write.  So just like last night, we're not going to fight it but simply call Friday higher.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

VZ has been all over the map lately with four doji stars in a row before Thursday and then a big red marubozu. to close on its lower BB.  This action is definitely not my preferred swing trade setup so we just let it pass.  Odds are though that it will go higher on Friday as the entire market is looking up at this point.

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