Thursday, September 17, 2015

Thursday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain.
  • ES pivot 1959.42.  Holding above is bullish.
  • Friday bias lower technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.

Well we're coming down to the wire here.  On Wednesday the markets put in another non-trivial gain as everybody looks forward to Thursday's big big big announcement from the Fed. It seems that Mr Market is pricing in a zero interest rate rise. Whether that's true or not remains to be seen so we go ahead with the chart run-down as usual for whatever it may be worth.

The technicals

The Dow:   The Dow gained another significant 140 points to confirm Tuesday's ascending triangle breakout. That sent the indicators all overbought but the stochastic has yet to begin a bearish crossover. Of course none of this means a whole lot since everybody is now waiting for the Fed decision on Thursday.

The VIX:  Last night I said it looked like the VIX was likely going lower again on Wednesday but we might get some sort of a reversal hammer. Well nice try but instead the VIX just kept right on going lower with a 5.28% loss on a tall red marubozu. That took the indicators back to oversold and sent them all running lower with no sign of a bullish stochastic crossover as we remain in a two week long descending RTC. So there are no real bullish signs on this chart tonight at all.

Market index futures: Tonight, all three futures are lower at 12:12 AM EDT with ES down 0.15%. ES made it two in a row on Wednesday with another decent advance that broke through resistance at 1980. The indicators continue to rise and are now just overbought.. There's nothing really bearish about the technicals here tonight aside from the fact that the overnight seems to be sagging a bit. I don't know if this reflects profit taking or uncertainty about Thursday's Fed decision. But it does call into question whether ES has enough gas in the tank to move higher on Thursday.

ES daily pivot: Tonight the ES daily pivot rises again from 1959.42 to 2085.92. That still leaves ES above its new pivot so this indicator continues bullish.

Dollar index:  Will the dollar definitely fooled me on Wednesday. I thought after Tuesday's big advance it still had enough gas left to break through its 200-day MA on Wednesday but it was not to be. After a brief attempt to break through it fell back and never challenged again, ending with a 0.25% loss. The resulting candle is a bearish harami though the indicators remain all oversold. The stochastic is threaded out and so overall this chart looks negative Thursday.

Euro:  Last night I thought the euro looked like it was going lower on Wednesday. And indeed it opened lower but then spent the rest of the day recovering to close at 1.1294. The result was a tall hammer that successfully tested the 200 day MA. That still leaves the indicators overbought however the stochastic has a completed bearish crossover. On the other hand the new overnight is moving higher again gapping up significantly. And to complicate matters Wednesday's trade was outside the rising RTC for a bearish set up. The net result is that this chart has no direction at all and so I'm not calling it for Thursday.

Transportation:  Last night I noted that the trans had no bearish signs in sight and it proved to be true as on Thursday they gained another 0.24%. But with indicators now pretty overbought and the stochastic threaded out at a high level and a short stubby spinning top sitting at the top of Tuesday's giant green candle, it's not clear that the trans have any more gas left in the tank for a further advance on Thursday. But with the Fed announcement coming out that's all moot anyway.


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    10      2       3           2       0.857   2314

September  5      2       4           0       0.714   1228

     And the winner is...

I normally call Fed days as "uncertain" as a matter of course.  But Thursday's announcement is as uncertain as they get.  The talking heads are all over the place on this one.  Will the Fed raise or pass?  Will it be 0.25% or "12 1/2 basis points"?  Will it be now or December?  Or next year?  Who knows.  Personally, I'm just sitting tight and waiting.  We'll see.  In the meantime, I can't think of a better occasion to call Thursday uncertain.

Single Stock Trader

It was good to be cautious about Verizon last night because on Wednesday it came in dead last being the only loser in the entire Dow. The resulting dark cloud cover coupled with overbought indicators and a stochastic about to form a bearish crossover all makes this look more like a short for Thursday then any sort of a buy.

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