Thursday, August 13, 2015

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2072.00.  Holding above is bullish.
  • Friday  bias uncertain technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.

Well that was odd.  Apparently, after the obligatory mass dump right out the gate due to the latest Chinese cataclysm, just like on Tuesday, on Wednesday Mr. Market instead figured out he'd been had and then spent the rest of the day marching back to break-even.  The net result after all the strum und drang, was a loss for the Dow of all of 0.33 points.  Okey dokey.  So moving right along, let's turn our attention to Thursday.

The technicals

The Dow:  Holy moly, on Wednesday the Dow put in the biggest dragonfly doji I've ever seen, one that broke well below the lower BB and also out the left side of the descending RTC.  Indicators remain just off oversold so candlestick-wise this has to be bullish.

The VIX: And on Wednesday the VIX gapped up at the open right above its 200 day MA.  It then motored higher only to give it all up in the end to finish with a 0.73% loss on a tall dark cloud cover and a bearish stochastic crossover  That looks continued bearish to me.

Market index futures: Tonight, all three futures are higher at 12:54 AM EDT with ES up  0.20%.  Like the other charts, ES put in a dramatic dragonfly doji on Wednesday, puncturing both its lower BB and then its 200 day MA before bouncing back.  That left the indicators, not surprisingly somewhat confused.  But with a nice bump in the new overnight we're starting to see something of a morning star pattern so this chart is now looking bullish to me.

ES daily pivot: Tonight the ES daily pivot falls again from 2084.08 to 2072.00. That now leaves ES well above its new pivot so this indicator turns back to bullish.

Dollar index:  Wow - on Wednesday the dollar took its biggest gap down since, uh well I don't know - I scrolled back a year and couldn't find anything near this big.  The resulting doji star sitting below the lower BB for a 1.07% loss is a good 2/3 of a bullish morning star.  And with indicators now oversold, I'd say the dollar goes higher on Thursday.

Euro:  Last night I hesitated calling the euro lower in the face of a star - and good thing too because the euro kept right on rallying Wednesday with a big gain to close at 1.1174, well above its upper BB.  That left the indicators highly overbought and the stochastic starting to curve around for a bearish crossover.  So far the overnight is confirming that with modest losses.  So with the BB hit I have to think the euro may be headed lower on Thursday.

Transportation:  And finally on Wednesday the trans put in a monster hammer.  It didn't quite hit the lower BB but it did form a clear bullish stochastic crossover.  With nothing else of note here, this chart now looks bullish.


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     5      1       0           2       0.875    503

     And the winner is...

We got a number of extreme  reversal candles in the charts on Wednesday and the futures are guiding higher so I'm just going to call Thursday higher.

Single Stock Trader

Crazy stuff here.  After what looked like a slam-dunk bearish evening star on Tuesday, instead on Wednesday VZ went higher some more, on the mother of all bullish engulfing patterns.  I don't care.  The indicators are now overbought and this still isn't the entry pattern I'm looking for.

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