Tuesday, August 18, 2015

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher....
  • ES pivot 2091.50.  Holding above is bullish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ still not a swing trade buy.

All the signs were looking positive last night but I guess I just got spooked by some falling oil and lack of enthusiasm from ES, all of which made me call Monday uncertain.  Turns out the Dow rose yet again, making it now four in a row and even doing a bit better than Friday..  Ah but where does that leave Tuesday?  Off to the charts we go in search of clues.

The technicals

The Dow:  Well the Dow did exhibit some indecision on Monday as it plunged right out the gate but after the first five minutes it was all uphill into the close.  That keeps us in a nice rising RTC with all indicators rising but not yet overbought.  On the other hand, we now have a tall hanging man so that's at least a reversal warning.

The VIX:  Whoa - this was really odd.  On Monday the VIX rose 1.48%.  It's unusual enough for it to move in correlation with the market but it did it on a tall red marubozu dark cloud cover.  And that was enough to keep it inside its descending RTC and keep the indicators falling towards oversold.  So this chart still looks bearish.  That was definitely a strange one.

Market index futures: Tonight, all three futures are again mixed at 12:45 AM EDT with ES up just 0.02% and YM dead even.  After a rocky open, ES ended up doing quite well on Monday, powering right back to resistance at 2100.  That leaves a new rising RTC in effect and indicators also continue to rise but are not yet overbought.  If ES can clear resistance here, it looks like smooth sailing all the way to the upper BB at 2112.  The currently developing overnight candle isn't looking so hot though, as an inverted hammer.

ES daily pivot: Tonight the ES daily pivot rises again from 2084.58 to 2091.50. ES remains above its new pivot so this indicator continues bullish

Dollar index:  Last night I wrote that "this chart looks all-around bullish".  Well it wasn't a raging bull perhaps but it did gain another 0.29% Monday to exit its descending RTC for a bullish setup.  That also caused the indicators to clearly bottom at oversold and gave us a new bullish stochastic crossover so this chart looks bullish again.

Euro:  And last night I also wrote that "it's looking like the euro closes lower again on Monday."  And that was looking good with the euro falling back to 1.1085 to make it three down in a row and a new descending RTC.  Even at that indicators remain overbought and we have a new completed stochastic crossover so I don't think the selling is done here yet.  The overnight is continuing lower, supporting that idea.

Transportation:  And in quite a bullish sign, on Monday the trans outperformed the Dow with a 0.73% gain that exited the descending RTC for a bullish trigger and sent the indicators continuing higher on their way towards overbought.  So there's also nothing bearish on this chart for Tuesday.


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       1           2       0.875    503

     And the winner is...

Well things are looking generally positive tonight so I'm going to go ahead and call Tuesday higher, though more because of an absence of bearish signs than any strong conviction in the current mini-rally.  I note that the Dow has been putting in lower highs since May now and Monday's high lies right along that descending line.  I guess we'll see.

Single Stock Trader

VZ was one of the weaker members of the Dow on Monday but nonetheless managed to pull off a green bullish piercing pattern.  However, the indicators remain overbought, we have a new bearish stochastic crossover, and a bearish trigger on a rising RTC exit so I'm afraid all that trumps the candle.  Still no buy here.

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