Tuesday, July 14, 2015

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 2080.42.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.

Well Mr. Market seemed happy with the outcome of the all-night Greek negotiations, in which the Greeks promised to do stuff they never have and aren't likely to ever do.  But no matter, optics is everything in the stock market and on Tuesday Mr. Market had his rose-colored glasses on.  Go figure.  Now can we please get on with it and see where Tuesday is headed?

The technicals

The Dow:  As has been so often the case lately, all the action on Monday was over in the first two minutes of trading.  The other six hours and 28 minutes were just noise.  How anyone can make money this way is beyond me.  I certainly can't.  In any case that now gives us three up days in a row and two white soldiers that have finally marched away from the 200 day MA.  With rising indicators this chart once again looks bullish.

The VIX:  Perhaps the most dramatic chart of the day was the VIX which plunged over 17% to gap down right through its 200 day MA on a tall red marubozu.  With a now complete bearish stochastic crossover and falling indicators, this one looks nothing but bearish.

Market index futures: Tonight, all three futures are lower at 1:50 AM EDT with ES down 0.06%.  On Monday ES had its best day of the year so far zooming back to 2094.50 on a giant marubozu.  And that didn't even drive the indicators overbought yet.  So there are really no bearish signs to speak of here.

ES daily pivot: Tonight the ES daily pivot leaps from 2062.83 to 2080.42.  But even that giant move wasn't enough to put ES back below its new pivot so this indicator continues bullish.

Dollar index:  The dollar on Monday had its sixth gap move in six days with a big 0.86% jump that was good enough to form a bullish stochastic crossover.  Still not overbought and with resistance some distance away, I'd say there could be room to run higher again from here.

Euro:  After what appeared to be a breakout from its descending RTC on Friday, the euro proceeded to give it all back on Monday and then some, down to 1.1007.  Of course now we're near support and the new overnight is actually higher, so any further downside from here may be limited.

Transportation:  The trans had a great day Monday, up a percent for three white soldiers and a new rising RTC that stopped right at resistance at 8303.  Indicators are now near overbought so it's not clear we can push any higher from 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       5      0       1           0       1.000    784

     And the winner is...

I don't really see any bearish technical indications in the charts tonight.  However, I am concerned that we've come pretty far in the past two days, and three day streaks have been exceedingly rare this year so far.  This seems like a market that's ready for a pause, possibly a doji day.  So rather than simply call the close higher in the absence of any bearish signs, I'm going to have to content myself with calling Tuesday uncertain.

Single Stock Trader

VZ gained 20 cents Monday but was the third from the worst in the Dow on a red hanging man.  With RSI peaked just short of overbought and stymied by resistance at 47.39, I can't recommend this as a swing buy right now.

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