Wednesday, July 8, 2015

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2062.25.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ now a swing trade hold.

When I woke up this morning at the crack of 11 AM and looked at the market I wondered how I could have been so badly wrong, calling the Dow higher on Tuesday when it was down nearly 200 points.  But by the time the bell rang I had been vindicated as the Dow puled off the greatest comeback since Lazarus to finish up 93.  It was an interesting deveopment so let's look at the implciations for Wednesday.

[Stupid Blogspot's spell checker seems to be on strike once again so I apologize for any typos in this post].

The technicals

The Dow:  Last night I wrote that "this chart now looks bullish" and in the end it was as the Dow crossed its 200 day MA yet again to finish with a giant hammer - or is it hanging man?  With this herky-jerky Greek-fueled back and forth lately it's kind of hard to tell.  It does though look like the payoff on Monday's bullish RTC trigger and it left the indicators still just barely off oversold.  So with the 200 MA now as support I'm kinda leaning to this as still looking bullish.

The VIX:  And I caught this one too when I wrote "this chart looks lower Tuesday" as the VIX dropped over 5% on a tall inverted hammer after touching its upper BB, the traditional third rail of the VIX.  That still leaves the indicators just barely overbought and a bearish stochastic crossover in place.  So I'd hazard that the VIX sitll has more downside left here.

Market index futures: Tonight, all three futures are significantly lower  at 12:23 AM EDT with ES down 0.75 %.  After bouncing off its 200 day MA  on Monday ES conducted a successful retest Tuesday to finsih with a tall tall hanging man.  The new overnight is looking pretty grim and confirming that candle.

ES daily pivot: Tonight the ES daily pivot rises from 2056.42 to 2062.25.  And that was enough to put ES back below its new pivot so this indicator turns bearish.

Dollar index:  On Tuesday the dollar took  big 0.62% gap-up pop to trade entirely above its upper BB.  With indicators now overbought, a stochastic that has just formed a bearish crossover, and a big yawning gap below begging filling, this one looks lower Wednesday.  But the new overnight is up sharply so who knows where this is going.

Euro:  And on Tuesday the euro continued its current two week-plus downtrend with a bearish engulfing candle to close at 1.0986 as it dribbles down its lower BB.

Transportation:  On Tuesday the trans outperformed the Dow with a big 1.24% gain to close outside their descending RTC for a bullish trigger with indicators still just oversold and a completed bullish stochastic crossover.  So this chart technically looks quite good.


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       3      0       0           0       1.000    278

     And the winner is...

Hmm, well technically the charts are looking pretty bullish tonght.  Just one slight problem - China's stock market is cratering in the overnight and judging by the futures, that is sure to spill over into our markets on Wednesday.  So even though I'm a technician I'm just going to go with the news and call Wednesday lower.  There's no point fighting this tape, that's for sure.

Single Stock Trader

Last night I blessed VZ as a swing buy and it delivered on Tuesday though with a spindly long-legged doji.  That makes a very rare bullish tri-star pattern (in fact this is the first one I've ever seen) so I'll just have to say hang in there.

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