Tuesday, September 22, 2015

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher only if ES remains above its pivot, else lower.
  • ES pivot 1956.83.  Holding above is bullish.
  • Rest of  week bias lower technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ not a swing trade buy.


Well Mr. Market really fooled me on Monday. I sure wasn't expecting a 126 point gain in the Dow. Of course I can't complain since I'm always net long anyway but things don't always work out exactly the way we planned so we just forget about it and move on to Tuesday. Let me add that there's a chance I may not be able to publish Tuesday night since I have an all day event that may not leave me enough time to put together the usual post

The technicals

The Dow:  On Monday the Dow started off strong and then kept right on rising until about 11 AM when Honest Hillary, who couldn't keep her fingers off her keyboard, started twitting about how she was shocked, shocked to find that that drug prices are high That set off a decline but the Dow nevertheless managed to finish up 0.77% on the day. And that left the indicators all moving higher even though they never hit oversold. Except for the stochastic which continues to fall and is still showing no sign of a bullish crossover. Monday's action also traded outside the rising RTC which now makes it an official bearish trigger. So it remains to be seen if Monday's rally can be sustained into Tuesday

The VIX:  And on Monday the VIX put in a tall red candle confirming Friday's gap-up spinning top.  With indicators still oversold but not going anywhere, this just looks continued lower.

Market index futures: Tonight, all three futures are lower at 12:24 AM EDT with ES down 0.23%.  On Monday ES put in a small bullish piercing pattern but one which still traded outside its rising RTC and that is a bearish trigger.  The new overnight is forming another dark cloud cover, all of which leaves this chart too tough to call, though it looks more bearish than not.

ES daily pivot: Tonight the ES daily pivot falls again from 1958.25 to 1956.83. And that's enough to put ES back above its new pivot so this indicator flips back to bullish.

Dollar index:  On Monday the dollar took a huge 1.09% gap-up pop to blast right back up through its 200 day MA.  That completes a bullish stochastic crossover as the indicators all move higher just off oversold.  So this chart is now technically bullish.

Euro:  And on Monday the euro confirmed Friday's dark cloud cover with a tall gap-down red candle to close back to 1.1206, and busting down through its own 200 day MA.  Indicators continue falling off overbought so there's nothing bullish here other than a weak rally attempt as I write this.

Transportation:  After a big dump Friday, on Monday the trans retraced a quarter of that but with an unconvincing inverted hammer.  With indicators still falling just off oversold, it doesn't look particularly bullish to me.


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      3       6           0       0.625   1102

     And the winner is...

With ES so close to its pivot and with a few conflicting directions among the charts, I'm going to do a conditional call tonight - if ES manages to remain above its new pivot by mid-morning Tuesday, we'll close higher.  But if it breaks below and stays there, we close lower

Single Stock Trader

Verizon was one of the weaker members of the Dow on Monday but nonetheless managed to put in a small gain that was important because it respected support at 44.56. It was also enough to cause the indicators to begin moving higher before ever reaching oversold although the stochastic has still yet to begin turning around for a bullish crossover. So while this move was encouraging it's still not my preferred swing trade buy entry.

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