Friday, August 7, 2015

Friday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher only if ES breaks above its pivot, else lower.
  • ES pivot 2082.92.  Holding below is bearish.
  • Next week  bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.

Yup, as I was afraid, despite a spinning top reversal sign last night the Dow continued lower by triple digits on Thursday.  Is this market ever going to go higher?  We scour the charts for clues to Friday.

The technicals

The Dow:  With another 121 point loss on Thursday that now makes six down in a row, the longest losing streak of the year so far.  And this one broke support at 17,454 to near it slower BB intraday.  And though the indicators finally hit oversold the stochastic continues falling with no sign of a bullish crossover.  I think we're now getting close to a reversal but I dont' think it will happen Friday.  Though Friday might be a doji day.

The VIX:  Last night I wrote that the VIX "looks like it's ready for a move higher from here."  And damned if that isn't exactly what happened as the VIX confirmed Wednesday's hammer and  jumped 10% on Thursday, its biggest gain in a month.  With a bullish stochastic crossover now in full effect and indicators only just off oversold I don't think the VIX is done rising yet.

Market index futures: Tonight all three futures are higher at 12:55 AM EDT with ES up 0.11%.  On Thursday, ES lost ground on a basically bearish engulfing candle that drove the indicators oversold as the stochastic continues its descent from a bearish crossover.  We broke support at 2082, and with next next support not til 2067 (which is also the lower BB) I think there's still room to run lower here.

ES daily pivot: Tonight the ES daily pivot falls again from 2094.33 to 2082.92. That still leaves ES below its new pivot but right now by barely a point, so this indicator is now only weakly bearish.

Dollar index:  Last night I wrote that "this chart now looks lower to me."  And indeed it was, down 0.13% on Thursday with a classic dark cloud cover.  With the indicators still overbought and the stochastic and the brink of a bearish crossover it looks like this one goes lower again on Friday.

Euro:  And last night I also wrote that "the next move looks likely higher." on the euro.  And sure enough on Thursday the euro confirmed Wednesday's doji with a bounce back to 1.0926 on a green spinning top that still leaves the indicators just oversold but all moving higher including the stochastic.  The new overnight continues higher still and as a bonus that's exiting the descending RTC for a bullish setup so this chart still looks higher on Friday.

Transportation:  Ah yes, in a move Stevie Wonder saw coming last night I wrote that "this one looks ready to move lower."  And down they went, off 0.83% in a move that confirmed Wednesday's gravestone doji, peaked the indicators at overbought, and completed the bearish stochastic crossover.  That all leaves this chart looking just plain ugly.  There's more downside left 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      10      1       5           4       0.938   1212
August     3      1       0           0       0.750    261

     And the winner is...

The market has let off a lot of steam over the past few days and a bunch of charts now look like they're near turning points.  But they're not quite there yet.  Actually I think Friday could be a bottoming day, perhaps a hammer candle.  Caution would dictate calling it "uncertain" but because of the proximity of ES to its new pivot I think this would be another opportunity to make a conditional calling ES can break above its new pivot by mid-morning Friday, we'll close higher.  If not, we close lower.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

On Thursday VZ put in a tall skinny hammer, almost dragonfly doji but with indicators still overbought and a completed bearish stochastic crossover in effect I don't think that's going to be enough to call this one a swing buy yet.

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