Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Thursday higher.
• ES pivot 2102.33.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy.

Recap

Obama's inspiration

Last night I called Wednesday uncertain and with a net Dow change of just -3.4 points that seems to have been the right call.

Political rant

I amused myself this afternoon by watching the Empty Suit imagining himself the statesman on TV as he channeled his inner Neville Chamberlain waving about his Iranian agreement and thinking he'd accomplished something.

Remember what the Fuhrer said back in 1938 after Chamberlain departed, "That piece of paper means nothing".  Obviously they don't teach European history at Harvard Law School.  Meanwhile the Ayatollahs are popping the champagne corks in Tehran all the while their sycophants burn American flags in the streets and shout "Death to America".

Obama's new friends

Way to go, Obama.  Take a good look - these are the people you think are going to sing kumbaya around the camp fire with you.  Well, they've got the fire going anyway.  What were you thinking?  The world, sir, is laughing at you.  So sad.


The technicals

The Dow:  On Wednesday the Dow was up, then down, then up some more and down some more as various pieces of news came out.  In the end it all signified nothing as we got a perfect little doji star.  After four big up days and with indicators now overbought, that's a decent reversal sign, IMHO,

The VIX:  And the VIX was pretty much in the same boat with a doji of its own on Wednesday.  With its stochastic curving around for a bullish crossover, indicators nearing oversold, and a massive four day run-down, this one looks ready to move higher any day now.

Market index futures: Tonight, all three futures are higher at 12:15 AM EDT with ES up  0.30%.  ES managed another gain on Wednesday but did it on a small spinning top.  The gains in fact have been shrinking for three days now as ES looks to be running out of steam.  More worrisome, the stochastic is curving around and is that close to a bearish crossover.  On the other hand, the overnight is putting in a non-trivial advance, possibly on some more Greek news, so once again we can't call a reversal yet.

ES daily pivot: Tonight the ES daily pivot rises again from 2099.33 to 2102.33.  But ES still remains above its new pivot so this indicator just continues bullish.

Dollar index:  On Wednesday the fidgety dollar popped 0.51%as it continues to pinball its way through July.  We're now near month-long resistance but with the way things have been going lately, who knows.  I'm still not calling this one.

Euro:  And a good example - last night I figured the euro was showing signs of bottoming.  But noooo, instead it fell again, this time to 1.0957 after breaking support at 1.0989.  Anyway, we now have a new descending RTC going and the overnight is continuing lower so no technical reversal signs here.

Transportation:  After a divergent doji on Tuesday warning of a reversal, on Wednesday the trans confirmed that with a big 0.72% decline that underperformed the Dow and provided even more bearish confirmation.  Add in a bearish setup on a rising RTC exit and a stochastic within inches of a bearish crossover and that all spells lower on Thursday to me.

Accuracy: 

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       4           0       1.000    784

     And the winner is...

Hmm, we're seeing a number of dojis i the charts tonight that generally signal reversals.  But the market has been largely news-driven lately so much as I love my candlesticks, I'm afraid I'm going to have to go with the futures tonight and call Thursday higher.  A 0.30% advance i the wee hours is too much to just ignore.

Single Stock Trader

With a classic hanging man on Wednesday VZ is now looking technically toppy and so is definitely not a swing trade buy at this point.