Actionable ideas for the busy trader delivered daily right up front
- Friday lower.
- ES pivot 2049.67. Holding below is bearish.
- Next week bias uncertain technically.
- Monthly outlook: bias lower.
- Single stock trader: VZ not a swing trade buy
Blame it on Fed regret or or the price of oil which snapped a two day winning streak on Thursday to resume its downward march, but the recent market rally is now over. We're going to take one more look at the charts for Friday before taking next week off for the Christmas holidays. 'm not expecting a lot of market action next week anyway.
The Dow: With a dark cloud cover on Thursday that saw the Dow fall right back through the same 200 day MA that it broke above the day before, this chart now turns decidedly bearish for Friday.
The VIX: In a similar vein, on Thursday the VIX rose 6.05% but the candle belies that small move. It was a tall green marubozu that successfully tested its own 200 day MA and finished by giving us a bullish piercing pattern. Although indicators are not yet oversold the stochastic is starting to come around for a bullish crossover and the net impression of this chart is bullish.
Market index futures: Tonight, all three futures are lower at 12:31 AM EST with ES down 0.25%. Like the Dow, on Thursday ES completely reversed course and fell right back through its own 200 day MA on a tall red candle to finish right back down to 2034.25. On top of that the new overnight is continuing lower and that is causing a brand new bearish stochastic crossover before the indicators have even reached overbought. That's not a good sign and so I'm not optimistic for Friday here.
ES daily pivot: Tonight the ES daily pivot drops from 2063.00 to 2049.67. That now puts ES below its new pivot so this indicator turns bearish.
Dollar index: Perhaps the most extraordinary chart of the day was the dollar which took a massive 1.47% gap-up pop thus completely canceling Wednesday's bearish harami . With such a big gap below it now, it looks like two thirds of a bearish evening star so I give better than even odds at this point that the dollar goes lower on Friday.
Euro: And of course just as impressively on Thursday the euro ignored a bullish harami to gap down on a tall red marubozu and close back down to 1.0830. That sent all the indicators continuing lower and they are now just off of oversold. And that marks a clear rejection of its 200-day MA and the start of a new downtrend. The overnight seems to be trying to stage something of a rally but I'm not convinced it will hold through Friday.
Transportation: The trans were as bearish as anything else in the charts on Thursday, completely unable to make any headway above Wednesday's highs as they fell a large 2% to give up all of Wednesday's gains and half of Tuesday's as well. Even at that the indicators continue rising just barely off of oversold. Still with such a tall red candle it's hard to find anything bullish about this chart tonight.
Month right wrong no call conditional batting Dow
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 4 6 4 2 0.500 -350
December 7 2 4 0 0.778 662
And the winner is...
What a difference a day makes. With a promising rally short-circuited and all of the charts looking rather bearish tonight I'm just going to call Friday lower. I'll be happy to be proven wrong. That's all she wrote.
See you again not this coming Sunday night but the week after that since I'm taking next week off. Merry Christmas one and all!
Single Stock Trader
Last night I said that Verizon looked to be done as a swing trade buy and indeed on Thursday it fell along with the rest of the Dow. The candle is basically a dark cloud cover and while the indicators are now only just short of overbought they look to be about ready to turn around. So there is nothing bullish here tonight .