Actionable ideas for the busy trader delivered daily right up front
- Monday higher only if ES breaks above its pivot, else lower.
- ES pivot 2021.42. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ still not a swing trade buy.
I called last Friday as being uncertain and in retrospect that was about right because the market kind of wandered around for most of the day before finishing with some small gains. We now move on to a new week to sort this all out and make some sense of where Monday might be headed.
The Dow: It wasn't clear to me last Thursday night the Dow could follow up Thursday's big gains with another advance. But on Friday that's just what happened with a 74 point gain on a green candle sitting right on top of Thursday's big move. It also formed a bullish stochastic crossover from a high level. Those are often good for another day or two of gains. And with resistance around 17,130 now cleared it's not out of the question that the Dow could move higher again on Monday.
The VIX: And last Thursday I called the VIX correctly as it lost another 6.23% on Friday after breaking under its 200-day MA on Thursday. However, the candle was a red inverted hammer that left the indicators all oversold. So while further declines are not out of the question Monday is a day that requires confirmation.
Market index futures: Tonight, all three futures are lower at 12:11 AM EDT with ES down 0.30%. After a great day last Thursday , ES managed to squeak out some more gains on Friday to close back up to 2025.50. The candle was a fat hanging man and was enough to keep the indicators from continuing lower to just off of overbought. The Sunday overnight however seems to be giving some of that back as the stochastic continues to consolidate is latest bullish crossover. That all leaves this chart somewhat in flux and a bit difficult to call. My guess though is that ES will have trouble moving higher on Monday.
ES daily pivot: Tonight the ES daily pivot falls again from 2007.83 to 2021.42. That now puts ES back below its new pivot so this indicator turns bearish.
Dollar index: Last Thursday night I noted a bullish green harami pattern for the dollar and called Friday higher. And that's just what happened with a 0.17% gain that took the dollar away from its lower BB on a small gap-up red spinning top. But that was enough to confirm a bullish stochastic crossover so with indicators still oversold but a reversal candle in place this chart is not clear enough to call tonight.
Euro: I was also right last Thursday about the euro which closed lower on Friday as I had expected. But it was a small loss back down to 1.1386 on a narrow doji star. That sent the indicators continuing lower from overbought though they are still a long way from oversold. The Sunday overnight though does not seem to be confirming this reversal indicator as the euro is down again. That casts doubt on its ability to close higher on Monday.
Transportation: And finally, in a bit of bearish divergence, on Friday the trans lost a big 1.58% on a day the rest of the market was higher. The candle was essentially bearish engulfing as the trans were unable to make any headway past Thursday's highs. Indicators are now all falling towards oversold so on the face of it this chart looks fairly bearish for Monday.
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 4 4 2 0 0.500 455
And the winner is...
Tonight the charts are looks a bit indecisive and of course Monday is generally the hardest day to call anyway. But given the close proximity of ES to its pivot, it seems like a good time to try another conditional call: if ES can break above its new pivot by mid-morning Monday, we'll close the day higher. But if it remains below the pivot, we close lower.
Single Stock Trader
Last Friday Verizon put in a small gain on a red hanging man that just barely missed its upper BB. It did take the indicators back to overbought though and that makes this chart now look quite toppy. There's no way this is any kind of a buy at this point.