Thursday, July 9, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday  higher.
  • ES pivot 2049.58.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.

Whoo-ee!  What a month, and we're barely past the first week.  First it was the Greeks.  Then the Puerto Ricans.  Then the Chinese market imploded, and on Wednesday the NYSE suddenly went on vacation for half the day  If it's not one thing it's another.  Guess it was a good idea to call Wednesday lower.  Let's see what sense the charts can make of all this turmoil for Thursday.

And Blogspot's spell checker must be hosted by the NYSE becasue this is the second night in a row that I click on it and nothing happens.  So sorry in advance for any typos.

The technicals

The Dow:  Technically, Wednesday's tall red marubozu confirmed Tuesday's tall hanging man as the Dowf ell right back through its 200 day MA, its seventh cross in seven days.  We're now right back to the lower BB and indicators are back to oversold.  But we also just got a bearish stochastic crossover from a low level and those are usually good for a day or two of lower prices.

The VIX:  The VIX, which was looking lower last night instead took off for a 22% pop, propeled largely by the NYSE debacle, and closing above its upper BB just shy of 20 for its higher close since January 30th.  Normally once the VIX hits its upper BB, it goes lower.  But when it revisits it repeatedly, it starts to want to stick around, like the spikes we had last October and December.  And with a fresh bullish stochastic crossover from a high level, I am very hesitant to call the VIX lower just yet.

Market index futures: Tonight, all three futures are higher at 12:37 AM EDT with ES up  a significant 0.59%.  On Wednesday ES plunged right back to its 200 day MA making the third day in a row that's served as support.  It also formed bearish stochastic crossover from a lwo level which is a bad sign.  But the overnight se3ems to be trying to stage a rally.  So the worst I can say of this chart is that further downside seems to be limited.

ES daily pivot: Tonight the ES daily pivot falls again from 2062.25 to 2049.58.  But this time that was enough to put ES back above its new pivot so this indicator now turns back to bullish.

Dollar index:  The dollar took a beating on Wednesday, gapping down as sharply as it gapped up on Tuesday.  With a bearish stochastic crossover and indicators still voerbought this looks like a recipe for lower again Thursday.

Euro:  On Wednesday the euro made its sixth direction reversal in a row by retracing all of Tuesday's losses and then some to close at 1.1071.  That sent the indocators off oversold and further gains in the overnight seem to be pointing to a higher close on Thursday.

Transportation:  The trans underperformed the Dow on Wednesday turning what looked like an incipient rally into a rout with a bearish stochastic crossover from a low level and a tall red marubozu that took them right back to their lower BB.  So this chart suddenly looks bearish.


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       4      0       0           0       1.000    539

     And the winner is...

Wednesday's decline may have been overdone and the futures are certainly guiding higher in the overnight, thanks possibly to some Chinese central bank meddling in their stock market - who knows, I can't keep track of all this anymore.  In any case, when the futures are up nearly 0.6% in the wee hours of the morning, it's good to pay attention.  So I'm going to call Thursday higher despite some bearish technicals.

Single Stock Trader

The bullish tri-star in VZ did not pan out on Wednesday as VZ was dragged down with the rest of the market on the Chinese market news and the unscheduled NYSE holiday.  It left us with a gap-down doji star sitting on its lower BB but with a bearish stochastic crossover so I'm going to just wait and see what it does Thursday morning.

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