Thursday, July 23, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2107.42.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a swing trade buy.

The markets moved lower Wednesday as I expected.  Now we're left to figure out when the selling will end for the next move higher.  And only the charts can tell us that so let's take a gander.

The technicals

The Dow:  On Wednesday the Dow lost 0.38% on a stubby red hammer.  That left the indicators just barely off overbought and the stochastic moving lower.  This really isn't a reversal sign so I can't call the Dow higher from here.

The VIX:  What the heck - this is like the third time in a week the VIX has moved in positive correlation with the market.  I don't think I've ever seen that.  Wednesday gave us a 0.82% loss on a bearish engulfing pattern.  But the indicators remain quite oversold and the stochastic has completed a bullish crossover.  So with teh candles and chars in opposition, there's no call here tonight.

Market index futures: Tonight, all three futures are higher at 12:15 AM EDT with ES up  0.19%.  On Wednesday ES put n a classic gap-down doji star.  And despite indicators falling off overbought, the overnight is gapping back up again in a bullish morning star pattern.  That makes this chart now look bullish for Thursday.

ES daily pivot: Tonight the ES daily pivot falls again from 2115.42 to 2107.42.  But this time that was enough to bring ES back above its new pivot so this indicator now changes back to bullish.

Dollar index:  Sigh - once again he dollar fooled me on Wednesday by rising 0.31% instead of falling as I thought.  The resulting candle is indeterminate and the indicators continue moving lower off overbought.  It's also a bearish trigger on the recent rising RTC exit so I have to think there's more downside coming despite Wednesday's gains.

Euro:  And the euro on Wednesday was pretty much the mirror image of the dollar - down to 1.0912 on a stubby red spinning top but with rising indicators just off oversold.  The new overnight though is gapping higher non-trivially so it's possible the euro could move higher on Thursday.

Transportation:  The trans continued its up/down pattern on Wednesday with a 0.30% loss on a red hanging man at the top of Tuesday's candle.  Indicators are now moving lower so if anything this suggests continued lower on Thursday.


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       7      0       4           2       1.000    922

     And the winner is...

It's not completely clear and the charts are a bit ambivalent tonight but the one chart that does look unequivocally bullish is the futures (now forming a morning star) and I always hate going against the futures without a good reason.  So I guess that just leaves a call of Thursday higher.

Single Stock Trader

It's good I didn't commit to the tempting gap-down doji star in Tuesday's chart because VZ just sank another 1.11% on Wednesday, this time with a hammer that just tickled the lower BB.  That's also a reversal indicator but with indicators still only recently off overbought it's still not the ideal buy setup so once again I wait for confirmation before getting in.

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