Friday, October 2, 2015

Friday depends oin ES pivot

Original vintage poster ROCHERS DE NAYE RACK RAILWAY

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher only if ES remains above its pivot, else lower.
  • ES pivot 2085.92.  Holding above is bullish.
  • Next week bias higher technically.
  • Monthly outlook: bias lower.
  • Single stock trader: VZ still not a swing trade buy.

Well that was just unfortunate. I thought for sure based on the technicals that Thursday would be going higher and in fact both the SPX and the Nasdaq did go higher. It's just that the Dow despite a late afternoon rally didn't quite manage to break even and therefore my call for Thursday being higher was wrong. Oh well - it was only by 13 points. I never like starting off a month being wrong so let's see if I can't redeem myself for Friday as we get October rolling.

The technicals

The Dow:  So after a nice game on Wednesday the aforementioned Dow on Thursday put in a long-legged doji star. This is a reversal warning however the indicators are all still busy rising from oversold but have not yet not yet reached overbought.. Therefore it is too early to call this one lower on Friday.

The VIX:  Last night I said the VIX still had lower to go on Thursday and that proved to be true is it fell another eight percent. That sent all of the indicators off of overbought and confirmed a bearish stochastic crossover. The long-legged inverted hammer is a bullish reversal warning but one which requires confirmation and at this stage it's still too early to do that so I can't call this one higher just yet on Friday.

Market index futures: Tonight, all three futures are mixed at 12:11 AM EDT with ES down 0.03% but NQ up 0.05%. On Thursday ES put in a nice green continuation candle following Wednesday's big gain that confirmed Tuesday's doji star. Indicators are all rising now off of oversold but still a long way from overbought and the stochastic is also continuing higher. In addition the overnight just keeps chugging along so they are really no bearish signs on this chart tonight.

ES daily pivot: Tonight the ES daily pivot rises from 1896.83 to 2085.92.  ES remains slightly above its new pivot so this indicator continues bullish, but just barely.

Dollar index:  Last night I took a wild guess that the dollar will move lower on Thursday and that paid off with a 0.16% decline on a small red hanging man that successfully tested its 200-day MA. Indicators continue to fall off of overbought but are still a long way from oversold. In addition, the stochastic continues to decline and therefore it looks like dollar still has lower to go on Friday.

Euro:  On the other hand I did miss the euro which Thursday did not continue falling but instead put it in a small gain to close at 1.1196 on a classic spinning top. However it still faces resistance at its 200-day MA currently at 1.1198, and all of the indicators are now falling along with a stochastic that has just completed a bearish crossover. Therefore I wouldn't put too much stock in the spinning top as it looks more likely that there is more downside coming on Friday.

Transportation:  And finally last night I said that the trans were looking more likely higher on Friday than lower and that proved to be true as they put in a nice 0.60% advance to make it three white soldiers on the charts. The indicators are still just barely oversold but continuing to rise along with a nicely completed bullish stochastic crossover. We do have some resistance coming up around 7858 but that means there's still at least a little bit more room to run for the trans on Friday.


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  7      4       8           1       0.667   1404

October    0      1       0           0       0.000    -13

     And the winner is...

Tonight the charts remain generally bullish but with the failure of the Dow to advance on Thursday I'm a bit cautious.  So with the markets remaining skittish and ES now close to its new pivot this seems like a good time for a conditional call.  If ES remains above its new pivot by mid-morning Friday we'll close higher.  But if it sinks below it by then we'll close lower.  That's all she wrote.  That's enough!  See you again Sunday night!
Single Stock Trader

Once again last night I was reluctant to call Verizon a buy and it's a good thing too because on Thursday it just sold off some more to continue in a two week long descending RTC. It's been oversold the whole time but lately that means nothing as it continues to dribble down its lower BB. So we are still waiting for this stock to become a buy. Of particular concern is the fact that on Thursday it broke through its two month long support at 43.46. It's not looking good.

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