Tuesday, October 13, 2015

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower....
  • ES pivot 2008.92.  Holding below is bearish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • Single stock trader: VZ not a swing trade buy.

Well it was about what I expected on Monday with a semi-holiday.The Dow gained a meager 47 points and the SPX managed less than that on a low volume snoozer of a day. So with nothing much having happened let's continue on to see which way Tuesday is headed.
The technicals

The Dow:  The Dow just keeps right on trucking with Monday making it 10 in a row on the latest rising RTC. Lately its been just crawling right up its upper BB and RSI is now pegged at 100. It doesn't get any higher than that. The stochastic similarly is also bumping up against the ceiling with no predictive power. We remain in the biggest uptrend I've seen in a long time and with no reversal candles in sight I just can't call this chart lower yet.

The VIX:  And correspondingly the VIX is now in an equally long downtrend losing another 5.3% on Monday with its own RSI now on zero. This is in fact the third day in a row RSI has been at zero and I can't recall the last time that happened. In any case we continue to dribble down the lower BB with no end in sight. Of even more importance is the fact that on Monday the VIX broke under its 200-day MA. That's always a bad sign and with a red marubozu on the books it doesn't look like there's any reversal in sight for the VIX right now.

Market index futures: Tonight, all three futures are lower at 12:36 AM EDT with ES down 0.17 %. After a rip-roaring rally last week ES has been having some trouble making any headway the last few days putting in just a small advance on Monday. And it appears to be giving most of that back in the new overnight in the form of a dark cloud cover. Indicators also now appear to be falling back off extreme overbought levels and the stochastic has just squeaked out a bearish crossover. So the general impression here is that this chart looks lower for Tuesday.

ES daily pivot: Tonight the ES daily pivot rises again from 2006.75 to 2008.92.  An overnight sag in ES has now put it back below its new pivot so this indicator now turns bearish.

Dollar index:  On Friday the dollar dropped all the way to its lower BB and on Monday it lost another 0.12% on a gravestone doji. Indicators are now oversold but the stochastic has not yet begun to curve around for a bullish crossover. So we have a reversal warning in place but one which requires confirmation on Tuesday.

Euro:  After touching its upper BB on Monday with a small lopsided spinning top the euro looks like it's falling back in the overnight, down 0.13% at the moment. Indicators look to have now peaked at overbought and the stochastic is getting ready for a bearish crossover so overall this chart looks negative for Tuesday.

Transportation:  After a decent gain last Friday, on Monday the trans put in a tall classic hanging man sitting right at the top of Friday's candle. Indicators remain quite overbought and the stochastic is just about in position to form a bearish crossover. We remain in a steep rising RTC but the trans are looking to be about out of gas right now so a move lower on Tuesday would not surprise 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  7      4       8           1       0.667   1404
October    1      4       1           0       0.200     31

     And the winner is...

Tonight the charts are looking tired, and they have the right to be after such a nice rally last week.  We're getting some reversal signs so I'm just going to go ahead and call Tuesday lower.

Single Stock Trader

After putting in a red spinning top on Friday Verizon wasn't really able to make any headway on Monday with a stubby green hanging man. Indicators and now quite overbought and the stochastic is getting ready to curve around for a bearish crossover. Therefore this chart now looks to me to be more than a little toppy.

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