Friday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Friday lower.
• ES pivot 1998.17.  Holding below is bearish
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: waiting on new VZ entry.

Recap

Holy moly!  I wasn't expecting the Spanish Inquisition, nor the Swiss National Bank lifting its euro cap on Thursday.  Just look at the resulting chart of the Swiss franc futures, (6S H5 on eSignal).  Amazing.  And that's all it took to take the wind out of the Dow's sails for another triple digit loss.  So with op ex week drawing to a close (and none too soon), let's see what sense we cna make of the charts tonight.

Chart of the week

Swiss franc futures, weekly

If you were short the franc last night, my condolences.  This chart is truly breathtaking.  In the 10 years I've been doing this I've never seen anything close to it.  But it's stuff like this that is the reason I don't trade manipulated currencies, and what the Swiss have been doing to theirs is manipulation pure and simple.

The technicals

The Dow:  On Thursday the Dow, contrary to my expectations, extended its losing streak to five with a 106 point dump.  The candle was ugly the indicators all turned south again but still aren't back to oversold, we broke support at 17,382, and we remain in a descending RTC.  There's also no support now til the lower BB at 17,255, a number that I expect to see at some point Friday.  The the 200 day MA, now at 17,003 is hoving back into view.  All in all, this chart looks pretty grim.

The VIX:  And on Thursday the VIX gained 4.24% on a bullish piercing line.  However, it touched its upper BB for the second day in a row.  Since that line isn't rising away, it could offer some resistance, but with the VIX now above 20 for the third day in a row,  I'm not too sure.

Market index futures: Tonight, all three futures are significantly lower at 12:47 AM EST with ES down 0.60%.  ES had another bad day Thursday giving up the 2K level and remaining in a descending RTC but finally touching its lower BB intraday.  The new overnight candle gapped down but now also seems to be finding support around there.  The question is, with five down in a row, OBV running a negative 9.2M and ES now quite overextended from its pivot, are we due for a relief rally?  Ordinarily I'd say yes but now I'm not so sure.  The whole Swiss thing may not be over yet.

ES daily pivot: Tonight the ES daily pivot dips from 2002.75 to 1998.17. But we remain considerably below the new pivot so this indicator remains quite bearish.

Dollar index:  On Thursday the dollar gained0.28% to return to its recent highs around 62.70.  This number corresponds exactly to the highs of 2010, the last time we were this high.  And with the monthly RSI having now hit 100 and the monthly stochastic %K at 99, the dollar is as overbought as I've ever seen it.  Although the monthly chart remains in a rising RTC and has a whole army of green marubozus marching higher, I'm starting to get pretty nervous that a top in the dollar is getting close, like within a month or so.

Euro:  And of course the euro took another pounding on Thursday, giving up support from 2005 and now down to 1.1622, a level we haven't seen since November 2003!  Like the dollar, monthly RSI has now hit an extreme, zero in this case, a number lower than we even got in the depths of the 2008 recession.  And there's still no end in sight.  OBV is now running an extreme negative 7M.  If this keeps up, it will hit parity with the dollar by August.  And with a resurgence of nationalism in Europe, I just have to wonder if maybe this isn't the beginning of the end for the euro.

Transportation:  The trans on Thursday completely failed to capitalize on Wednesday's reversal signs and lost another 0.39%.  It just looks continued lower from here.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      2       1           1       0.750    942

     And the winner is...

With Friday coming around, and op-ex, and all negative-looking charts, and a bunch of turmoil injected into the market by the Swiss, traders may not want to be long going into the weekend.  Also, I note that the SPX Hi-Lo indicator actually rose on Thursday, not the washout bottom you'd like to see before a rally.  And while oil rose a bit on Thursday, it did it with a red inverted hammer - not a good rally sign.

So with a nod to the fact that anything can happen on op-ex Friday, I have to think that the preponderance of the evidence suggest that we will once again see Friday lower.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

VZ was one of only six stocks posting a gain on Thursday but it still doesn't look like a buy to me.

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Thursday higher.
• ES pivot 2002.75.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: waiting on new VZ entry.

Recap

It was another wild day on Wall St. Wednesday as the Dow plunged 128 points in the opening sixty seconds and kept on going lower until a post-lunch rally kicked in to end "only" down 187.  You can't blame oil, which actually rose for once.  Who knows, maybe it was the Charlie Hebdo Put (whatever that is).  Bottom line - that was then, this is now.  And tomorrow is the only thing that matters.  So it's back to the charts as we devine the future yet again.

The technicals

The Dow:  Making it a four day losing streak, the Dow put in a fat hammer Wednesday.  But it also made a bearish stochastic crossover.  So hmmm - what's up with that.  Well we're got the lower BB not too far away at 17,190 and support before that at 17.363 so right now I'd say we could see more downside but it's limited, and a reversal is due soon.

The VIX:  The daily VIX is often the most telling chart of the day and so it was on Wednesday as the VIX gapped up 4.47% but on a red marubozu that just touched its upper BB at 23.12.  While we still have a completed bullish stochastic crossover this sort of candlestick action looks distinctly bearish to me.

Market index futures: Tonight, all three futures are higher at 12: 36AM EST with ES up a respectable 0.49%.  On Wednesday ES put in a nice hammer that nearly touched its lower BB intraday.  The overnight rally, currently in bullish piercing pattern position is moving the indicators back higher.  Also, OBV is coming off its crazy low values (negative 4.2M).  This provides some minor confirmation of the hammer and gives at least a suggestion of a move higher on Thursday.

ES daily pivot: Tonight the ES daily pivot falls again from 2022.92 to 2002.75.  That, plus an evening rally in ES was enough to put us back above the new pivot so this indicator now turns bullish.

Dollar index:  The dollar put in a tall doji, neither hammer nor hanging man on Wednesday as it continues to congest around 62.40 ($USDUPX).  The bounce off the upper BB and indicators about to fall off overbought suggest that the next move is lower.

Euro:  Whereas the euro on Wednesday simply put in a classic star near the lower end of Tuesday's action, seemingly looking for support itself.  Given that the last monthly close lower than this was November 2003, I'd have to think a move higher is on the way.  Or maybe the euro is just doing a Kodak and marching inexorably towards zero.

Transportation:  On Wednesday the trans dropped another 0.86% but on a red hammer that just touched its lower BB at 8585 intraday.  The last two bottoms formed that way so I'm going to guess there's at least even odds that we go higher on Thursday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      1       1           1       0.857    1048

     And the winner is...

What a difference a day makes.  Last night things were looking bearish, tonight I'm seeing a lot of positive signs.  Enough in fact for me to change course and call Thursday higher.

Single Stock Trader

I called a top in VZ at 47.18 last night and it indeed moved lower Wednesday to 46.97.  But it's still not a buy again so for now we're on the sidelines watching.

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday lower.
• ES pivot 2022.92.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: sell VZ.

Recap

It was looking really good for my conditional call on Tuesday as the Dow exploded right out the gate for 266 points after ES broke above its pivot.  But then things started to unravel and by the bell the Dow ended down 27 points.  Oh well.  It's a good play but not perfect and it's not entirely clear why it didn't work  So anyway now let's move on to Wednesday.

The technicals

The Dow:  On Tuesday the Dow produced the biggest spinning top I think I've ever seen, stretching from 17,923 to 17,572, a 351 point intraday swing.  But that action was enough to complete the bearish crossover I spoke of last night.  SO this chart looks even more bearish now.

The VIX:  On Tuesday the VIX gained another 5% exiting a descending RTC for a bullish trigger and a completed bullish stochastic crossover so it just looks like higher again on Wednesday.  Note also that RSI has begun moving higher before ever getting near oversold - another bearish sign.

Market index futures: Tonight, all three futures are lower at 1:21 AM EST with ES down 0.47%.  ES now has a clear new falling RTC going, a completed bearish stochastic crossover, OBV running a crazy low negative 3.3 million, and some non-trivial bearish knock-on in the overnight looking to make it a four day losing streak.  There's zip, zero, nada bullish about this chart tonight.

ES daily pivot: Tonight the ES daily pivot falls again from 2028.67 to 2022.92.  After a brief run higher ES has now fallen back well below its new pivot soe this indicator is once again bearish.

Dollar index:  The dollar got its mojo back on Tuesday punching 0.34% higher on a bullish engulfing candle back to near its recent highs.  It looks to me like its gearing up for another assault on those levels.

Euro:  After Monday's tall hanging man the euro rolled over on Tuesday saved only by recent support around 1.1769.  It's staging something of a comeback in the overnight but calling the euro higher Wednesday on that basis isn't catching the falling knife, it's catching the falling Acme safe, and that never ends well.

Transportation:  The trans put in a red spinning top Tuesday but with a new bearish crossover from a low level, this look continued bearish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      1       1           1       0.833    881

     And the winner is...

Whatever uncertainty I had last night looks to have been resolved tonight and the resolution is negative.  Accordingly I'm  just calling Wednesday lower.

Single Stock Trader
 
VZ was one of only 11 Dow stocks that managed a gain on Monday, but did it on an ugly red gap-up spinning top.  Since VZ's rallies have been shorter than its pullbacks lately, at 47.18 I'm calling this one a swing-trade sell tonight.

Tuesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Tuesday higher only if ES passes its pivot, else lower..
• ES pivot 2028.67.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader closed.

Recap

Sometimes being nervous is a good thing.  I called Monday lower in the face of some bullish candles and it paid off with a 97 point decline in the Dow.  This market continues to run on oil but we'll look at the rest of the charts just in case.

The technicals

The Dow:  On Monday the Dow produced a fat red spinning top that only briefly managed to trade above Friday's close.  The indicators have begun moving lower before ever hitting overbought - a bearish sign.  And the stochastic is squeezing  its lines in preparation for a bearish crossover  Net net, this chart now looks bearish.

The VIX:  I didn't want to commit to this chart last night but the bullish piercing pattern prevailed and the VIX shot up 11.68% on Monday putting an end to its recent (and short) downtrend.  The indicators have stopped moving lower and the stochastic is gearing up for a bullish crossover.  Same story with VVIX so I'd say we have a good shot at more upside on Tuesday.

Market index futures: Tonight, all three futures are higher at 12:21 AM EST with ES up  0.15%.  ES looks bearish on a daily basis after Monday's fall as the stochastic just made a bearish crossover.  The other indicators are confused though with RSI and OBV rising but momentum and money flow falling.  Go figure.

ES daily pivot: Tonight the ES daily pivot falls again from 2042.83 to 2028.67. We remain about 3.5 points below the new pivot so this indicator remains bearish.

Dollar index:  Last night I called the dollar lower but it still managed to eke out a 0.04% gain, though admittedly on a stubby red candle.  The indicators remain crazy overbought and this candle peeled off the upper BB and it's in evening star configuration so I'm going to hazard a guess that the dollar (gasp) goes lower on Tuesday.

Euro:  Last night I thought the euro might go higher Monday.  Silly me.  It was one and done for that as the euro just gave up all of Friday's gains, though on a lopsided doji.  But indicators are still oversold and still rising so I'm taking a pass here tonight.

Transportation:  Falling about the same as the Dow on Monday, everything I wrote about that applies here too.  End of story.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      0       1           1       1.000    881

     And the winner is...

We now have a down Friday followed by a down Monday and that's a bearish sign.  And with no sign of any new support in oil, the overall gestalt is fairly bearish tonight.  Which makes me wonder why the futures are all moving higher.  And with ES so close to its pivot, that makes it a good time to try another conditional call.  So we're going to claim that if ES can break above its pivot by mid-morning Tuesday, we'll close higher, otherwise lower.

Single Stock Trader
 
Last night I wrote that "I still see more upside potential than downside risk at 46.76."  And indeed VZ was one of the few gainers in the Dow on Monday.  That was enough to generate a bullish RTC setup.  And indicators continue to rise so this stock remains a buy.  We'll sell when a sell signal appears.  Right now, 47.08 ain't it.

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Monday lower.
• ES pivot 2042.83.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader closed.

Recap

In retrospect it wasn't a bad thing to call last Friday as "uncertain" because the Dow did a triple digit turn-around despite all the signs looking bullish the night before.  Let's take a look and see if we've got any more clarity this Sunday night.  As op-ex week gets underway (is it that time again already?), things are sure to get interesting.

The technicals

The Dow:  Well I was a bit surprised on Friday.  I thought the Dow had a bit more upside left than, well nothing at all.  This 171 point dump instantly short-circuited a nascent rally that was only just off oversold and while the resulting candle was a bullish trigger on a descending RTC exit, I'm not convinced.   This chart now doesn't look at all bullish to me.

The VIX:  And hey look at the VIX.  On Friday it was up only 3.17% but it was on a bullish piercing pattern.  However, that wasn't enough to keep all the indicators fro moving lower off overbought so this chart is a question mark for Monday.

Market index futures: Tonight, all three futures are lower at 12:57 AM EST with ES down 0.07%  Like everything else, ES took Friday off, this time with a bearish inside harami that sent the indicators back lower.  The overnight is continuing that so it ain't looking good for ES right now.

ES daily pivot: Tonight the ES daily pivot falls again from 2044.58 to 2042.83. We've now dropped below the new pivot so this indicator turned bearish again.

Dollar index:  I've been reluctant to ever call the dollar lower lately but Friday was one of those rare days when it fell.  The odd thing is that even after putting four red candles in a row, it's kept moving higher - until Friday.  That was the first down day for the dollar in an entire month.  Now we've got a rare dragonfly doji touching its upper BB followed by a tall inverted hammer with indicators still highly overbought.  While I'm still loathe to call the dollar lower ever at this point I've got to say that's how it's looking for Monday.

Euro:  Last Thursday night I wrote that we "might see an up day for the euro on Friday".  And whadaya know about that - on Friday the euro put in its first winning day since Christmas Eve to close at 1.1848 with a descending RTC exit good for a bullish setup.  All the indicators have bottomed and are now rising off oversold and the overnight is gapping higher leading me to believe that there's more upside left here for Monday.

Transportation:  Like the Dow only more so, the trans on Friday took a 1.15% hit unable to make any headway at all.  There's no telling where this one's going next.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    3      0       1           1       1.000    784

     And the winner is...

I dunno.  It's Sunday night, it's late, and I'm not feeling the love.  Even though we've yet to hit overbought on anything, we're getting some negative guidance form the VIX and the futures and the trans (oh my).  So although it's far from a given, I'm going to go waaay out on a limb and call Monday lower.

Single Stock Trader
 
VZ retraced some of Thursday's fains on Friday but at this point it's just a hold.  I still see more upside potential than downside risk at 46.76.