Wednesday, September 16, 2015

Wednesday uncertain

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

The market ended up doing quite nicely on Tuesday moving higher in pretty much a straight line all day long before giving back trust a tad into the close for a 229 point gain in the Dow.  That finally gives us some interesting charts to chew on so let's get to them as this momentous week rolls on. Op-ex and interest rates and triple witching, oh my!

The technicals

The Dow:  Last night I mentioned the possibility of a rising triangle here and with a 1.4% gain it sure looks like we got a breakout on Tuesday.  But does a one day pop constitute a new trend, particularly in such a tricky week?  I don't think so.  This one could just as easily fall back on Wednesday.

The VIX:  Here's a good example - last night it appeared the VIX might move higher but instead it just continued lower, down another 7% on Tuesday.  Indicators are still not yet oversold but we're now near support around 22.40.  There's no immediate reversal in sight but we could possibly get a hammer on Wednesday.

Market index futures: Tonight, all three futures are lower at 2:01 AM EDT with ES down 0.14%.  ES had a very good day Tuesday breaking out of recent resistance at 1958.  But the indicators have just gone overbought and the overnight seems to be faltering.  That suggests the possibility of a nervous mean-reversion on Wednesday.

ES daily pivot: Tonight the ES daily pivot rises from 1948.25 to 1959.42.  ES is back above its new pivot so this indicator is now bullish again.

Dollar index:  Last night I didn't want to commit to a dollar gain on Tuesday and that's a shame because it had a nice 0.39% green marubozu for a bullish engulfing pattern that was stopped only by its 200 day MA.  Indicators are now oversold and the stochastic just squeaked out a bullish crossover so this one looks higher on Wednesday.

Euro:  At least I caught Tuesday's move lower in the euro as it slid back down to 1.1290 just touching its 200 day MA before bouncing off it a bit.  The indicators are now overbought and the stochastic has completed a bearish crossover.  Tuesday's trade was also outside the rising RTC for a bearish setup.  The overnight though seems to be attempting a rally but everything else suggests lower on Wednesday.

Transportation:  On Tuesday the trans continued their latest uptrend with a big 1.85% gain.  Indicators are back to overbought but this tall green marubozu is hardly a bearish sign


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       3           0       0.714   1228

     And the winner is...

Ordinarily I'd say a good day like Tuesday with a rising triangle exit would call for continued higher, but with all the booby traps in place this week, it's possible the traders may simply take profits on Wednesday as they await the Fed.  And the overnight futures seem to be supporting that, so far at least.  So I'll just have to call Wednesday uncertain again.  Oh, and since everyone else in the universe has weighed in on this, I'll add my own prognostication - the Fed won't raise rates until December.

Single Stock Trader

VZ was swept up in the3 general Dow euphoria on Tuesday and broke out above recent resistance but that just makes it look even less like my preferred buy pattern so I'll just watch this one some more.

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