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- Wednesday higher only if ES remains above its pivot, else lower.
- ES pivot 2100.75. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ still not a swing trade buy.
In retrospect, I was probably a bit too conservative on Tuesday's call of uncertain but that's how in goes in the middle of lots of earnings reports. Let's move on to Wednesday and see if we have more direction from the charts this time.
The Dow: The Dow confirmed the bullish candle we got on Monday with another nice 0.50% gain. This one just barely touched its upper BB at 18,005 before falling back to just under the 18,000 level. Indicators remain overbought but not extremely so and at this point with two green candles on the books my guess is the Dow may want to take another peek at the 18,000 level on Wednesday.
The VIX: Tuesday was one of those unusual days when the VIX rose, in this case 2.76%, on a day when the broad market was higher too. But this small gain still keeps the VIX in a more than one week long consolidation zone bordered between 14 and 15.50. So not much has changed and there's really not much we can make of this little lopsided green spinning top other than to say that the VIX will probably continue its sideways movement for the next few days.
Market index futures: Tonight, all three futures are mixed at 1:12 AM EST with ES down a scant 0.02%. On Tuesday ES remained in a month-long rising RTC with a second green candle in a row, this one nearly touching the upper BB at 2112. The indicators remain overbought where they've been for nearly two weeks now. The new overnight seems to be having some trouble gaining any traction but with such a strong rising trend in place and no bearish candle on the charts to speak of, it is premature to call ES lower on Wednesday just yet.
ES daily pivot: Tonight the ES pivot rises from 2086.58 to 2100.75. That leaves ES just barely above its new pivot but this indicator remains nominally bullish.
Dollar index: The dollar put in a modest 0.25% advance on Tuesday on a red gap-up inverted hammer. Indicators have now fallen off of overbought and are all headed towards oversold. With two thirds of an evening star in place this chart looks lower for Wednesday.
Euro: On Tuesday the euro confirmed Monday's gap-up red spinning top with a tall red candle that brought it back down to 1.0970 and caused all the indicators to begin falling before reaching overbought, and also sent to stochastic curving around in preparation for a bearish crossover. With the new overnight guiding lower again the euro looks continued negative on Wednesday.
Transportation: In a bit bearish divergence , on Tuesday the trans fell 0 44% on a day the rest of the market was higher. This caused essentially a bearish dark cloud cover and left the indicators moving lower before ever reaching overbought. That leaves a general bearish impression to this chart.
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 7 7 5 1 0.533 538
November 0 1 1 0 0.000 -165
And the winner is...
Once again, the charts are a bit indistinct tonight. If anything, there's a bit of a bearish bias here. But because of fluctuations induced by earnings-related news, I'm going to make a conditional call. If ES remains above its new pivot by mid-morning Wednesday, we'll close higher. But if it breaks below the pivot, we close lower. I know this one didn't work the last time I tried it, but it works often enough to be useful.
Single Stock Trader
On Tuesday VZ confirmed Monday's red hanging man/dark cloud cover with a second red hanging man, this one good for a 0.71% loss. This was enough to drive the indicators just to the edge of overbought on the way down. But we also now have a completed bearish stochastic crossover so once again this chart still looks lower to me for Wednesday.