Actionable ideas for the busy trader delivered daily right up front
- Wednesday higher.
- ES pivot 2073.83. Holding above is bullish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ still not a swing trade buy.
Tuesday ended mixed with the Dow up but the Nasdaq down and took my conditional call with it - that was a total flop. Oh well, it doesn't always work. What we got was pretty much another Day of Nothing. So let's go to the charts and see if there might not be some more interesting action coming on Wednesday.
The Dow: The bears were unable to make any further headway on Tuesday as the Dow managed to gain 0.16% and preserve support around the 17,717 level. The indicators are now mixed with money flow and the stochastic falling while momentum and RSI rise and OBV goes nowhere. The resulting candle was clearly a green hammer so there's at least a sign of a reversal here but it's one which requires confirmation on Wednesday.
The VIX: I clearly missed the VIX last night when I said it would go higher because on Tuesday it instead dropped another seven and a half percent giving up all of Monday's gains and then some for a bearish engulfing pattern that also dropped right back through its 200 day MA, another bearish sign. With indicators now falling my guess has to be that the VIX moves lower again on Wednesday.
Market index futures: Tonight, all three futures are higher at 12:13 AM EST with ES up 0.10%. Technically, ES didn't look all that strong last night so I was a bit surprised to see it put in a green hammer to close back up to 2078 on Tuesday. Interestingly, the indicators continue to fall and have now hit oversold. There is now a slight suggestion of a move higher but there doesn't seem to be much interest in the overnight to confirm that so once again I have to defer on this chart and await confirmation on Wednesday.
ES daily pivot: Tonight the ES daily pivot falls from 2077.58 to 2073.83. .That puts ES back above its new pivot so this indicator turns right back to bullish.
Dollar index: And last night the dollar was another one of these indeterminate charts that I didn't want to call. That is also just as well because despite the yawning gap beneath it wanting filling and what looked like an imminent bearish evening star, the dollar instead gapped higher on Tuesday with a non-trivial 0.32% gain. But even this was on a red spinning top, the second in a row and the fourth reversal warning candle in a row. So with a dollar now back to levels not seen since last April and despite indicators that are now highly overbought it's not at all clear when it may start moving lower. So I'm just not calling this chart either tonight.
Euro: And last night the euro was yet another chart I didn't want to call for Tuesday. And that was also wise because after putting in what looked like a bullish piercing pattern on Tuesday it just kept going lower, closing this time down to 1.0711, its lowest close since April 15th. So that leaves us tonight with a chart it's now in a month-long downtrend and the lower BB falling away. While the indicators are now highly oversold there is still no reversal sign in sight on this chart.
Transportation: I didn't want to call the trans last night after a long-legged doji star and it was just as well because on Tuesday they put in a second even tighter star that resulted in a tiny 0.03% gain. All of which leaves us pretty much in the same spot we were last night - indecision abounds and there's no way to call 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 1 3 2 1 0.400 -341
And the winner is...
It may be incautious of me as there's still a fair bit of uncertainty in the charts tonight but we do have some reversal signs along with a promising VIX and futures turning positive so I'm going right back out on a limb and calling Wednesday higher.
Single Stock Trader
Last night I called Verizon a falling knife and this was pretty much the textbook definition of that as VZ put in a third hanging man reversal warning in a row, and yet it just keeps going lower finishing this time off another almost half a percent. The indicators at least have now gone to extreme oversold levels with RSI hitting 3.15 and the stochastic lying flat on the floor. But once again we have merely a reversal warning and no confirmation so it is too early to call Verizon higher although at this level it has started to become interesting.