Friday uncertain

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

• Friday uncertain.
• ES pivot 2045.00.  Holding above is bullish
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not looking bullish.

Recap

The big day finally arrived on Thursday.  The ECB spaketh and Mr. Market stood up shouting "Hallelujiah!" and celebrated by tacking on another 260 points.  Yowsa - I'll take it.  OK, folks - there's still a bunch of central banks we've yet to hear from.  It's still not too late to join the race to the bottom, and help my bottom line.  So will we give it all back on Friday?  Let's see what the charts have to say about that.

Karma Korner

Today we celebrate the news that Sheldon Silver, the longtime speaker of the New York State Assembly has (finally) been arrested on charges of bribery and kickbacks.  And no piker he, we're talking big time, as in the multi-millions of samolians here.  Oink oink!  All I can say is, couldn't happen to a more deserving guy.  Now maybe, just maybe the long-suffering people of New York can get what they deserve - honest government.

Mr. Silver, the time has come for you to pack your bags and sail off into the sunset.  I call for you to resign from the legislature immediately.  New York has had it up to here with you and your ambulance-chasing cronies over the past 21 years.  And to all the Democratic sycophants (you know who you are) lining up to support this gentleman, you're all worse than he is.  A pox on all of you.  Foo!

The technicals

The Dow:  The Dow's 1.48% gain Thursday put the lie to everyone who was saying the ECB move was already somehow baked in.  We had the best day in three weeks, remain in a new rising RTC with all indicators rising off oversold.  What's not to like?  This chart is plain bullish here.

The VIX:   Last night I wrote "there are still no bullish signs on this chart." and the technicals prevailed with a 13% plunge in the VIX Thursday.  The indicators continue moving lower and are now getting close to oversold.  We remain in a descending RTC and the candles have taken on the look of a falling inverse exponential.  This all leads me to believe a reversal is coming but I still think there's at least a bit more downside at hand.  Friday might be a doji day.

Market index futures: Tonight, all three futures are lower at 12:30 AM EST with ES down 0.15%.  ES obviously had a great day Thursday stopping only at resistance around 2056.  Indicators all continued rising but have not yet reached overbought.  But we've now reached the "show me" zone.  After a stellar four day rally, does ES have the moxie to push even higher on Friday?  I'm not convinced.

ES daily pivot: Tonight the ES daily pivot jumps from 2021.50 to 2045.00.  Even at that we remain above the new pivot, though ES seems to be fading.  So for now anyway, this indicator remains bullish.

Dollar index:  The mighty dollar, as might be expected had its best day since, uh, sometime in 2011 as far as I can see with a massive 1.31% moonshot marubozu  to close above its upper BB.  That crushed resistance back to 2010.  The last time we had a monthly close here was March 2009.  The indicators are all back to overbought but as we've been seeing, that counts for little here. There seems to be no stopping the dollar now.   Still, after such a big move, a bit of retracement might be in order.

Euro:  Meanwhile, the euro was just hammered on Thursday to close at 1.1365.  If this keeps up, my call for parity by the end of the year could be conservative.  We're already back to September 2003 levels now, just a few years after the creation of this franken-currency.  And at the risk of sounding like a broken record, the end is still nowhere in sight.

Transportation:  Last night I wrote "there's still room to run here on Thursday" and was there ever.  The trans on Thursday had the biggest day of all, up a whopping 2.87% on  a jolly green giant marubozu.  There's now nothing bearish on this chart other than the fact that a pause is often in order after such large one-day gains.  With resistance at 9223 not too far away, a topping day is not out of the question here.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      3       1           1       0.750    1054

     And the winner is...

Hmm, I don't know.  While there are no signs of a top just yet, the overnight futures seem to be running out of gas.and we're now sitting right on a number of resistance points.  I'd love to call the market higher but there's a little voice saying "Don't do it, Michele".  After a nice rally and a big up-day Thursday, traders might want to book profits going into the weekend.  So I'm going to content myself with simply calling Friday uncertain.  We could get a doji day.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

Well VZ certainly took an unexpected (by me anyway) turn on Thursday with a nearly 1% loss to fall out of its rising RTC for a bearish setup and a bearish stochastic crossover.  It's looking more like a short right now.

Thursday higher

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

• Thursday higher.
• ES pivot 2021.50.  Holding above is bullish
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: waiting on new VZ entry.

Recap

The market just continued treading water on Wednesday as everyone awaits the big announcement from the ECB.  Right now the only question is whether or not it's already been baked in.  Personally I don't think that's entirely the case.  But perhaps the charts will shed some light on this subject as we continue on to the end of the week.

The technicals

The Dow:  Just more uncertainty from the Dow on Wednesday, this time in the form of a lopsided spinning top that after another triple digit excursion resulted in just a 39 point advance.  Technically though this chart remains bullish, probably reflecting the market's expectation of QE from the ECB.

The VIX:   Last night I wrote "I don't think we're done going lower".  Good thinking too because after a doji day the VIX just kept right on descending, down another 5.23% Wednesday on a giant bearish engulfing candle.  That's still nowhere near enough to drive the indicators oversold and the stochastic is still in full-on bearish crossover mode so there are still no bullish signs on this chart.

Market index futures: Tonight, all three futures are higher at 12:22 AM EST with ES up  0.20%.  Last night I wrote "[a bunch of things] all point to continued higher on Wednesday."  And sure enough, ES had a decent day on Wednesday continuing out of its descending RTC for a bullish trigger.  Indicators are now off oversold but continue rising and there's some more positive pin action in the overnight so it looks like the traders are expecting good news from the ECB on Thursday.

ES daily pivot: Tonight the ES daily pivot rises again from 2013.58 to 2021.50.  Once again we remain above the new pivot so this indicator remains bullish.

Dollar index:  The dollar has a rare down day on Wednesday but even so managed a green hanging man.  What it does Thursday will depend in large measure on the ECB, so no call here.

Euro:  Amazingly, the euro actually closed higher on Wednesday, its first green candle in seven sessions.  But two inverted hammers doth not a rally make so we'll just have to wait and see what the ECB says on Thursday.  That's sure to move the euro.

Transportation:  Last night I wrote "it looks like the rally isn't over yet.".  And indeed it wasn't as the trans packed on another 0.45% on Wednesday with three white soldiers and a bullish trigger on the descending RTC exit.  Indicators still not yet overbought though so I'm going to guess there's still room to run here on Thursday

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    7      3       1           1       0.727    794

     And the winner is...

Obviously the big news Thursday is the ECBs QE announcement.  Right now the technicals are looking like the market is gearing up to move higher ao I'm just going to assume that someone knows something I don't (not hard to do) and call Thursday higher.

Single Stock Trader

VZ remains in a rising RTC and it looks like my calls for a short term top last night were premature.  With non-confirmation of Tuesday's doji, it just looks continued higher.

Wednesday higher

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

• Wednesday higher.
• ES pivot 2013.58.  Holding above is bullish
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: waiting on new VZ entry.

Recap

I don't like Monday-holiday weeks.  They throw me off for the rest of the week.  In any event, Tuesday's indecision reflected, I think, a general feeling that everyone must be on ECB watch.  With that in mind, let's see if we can make any sense of Wednesday.

The technicals

The Dow:  The Dow had a big day Tuesday, down early triple digits.  But the traders must have had a good lunch because soon thereafter it began moving higher, to end the day up a whopping 4 points.  The resulting star is a reversal warning - but one which requires confirmation.  So we're left to wait & wonder.

The VIX:  Last night I wrote "this one looks lower Tuesday" and danged if that isn't just what happened, with theVIX down another 5%.  It's a gap-down star but is also a bearish stochastic crossover so I don't think we're done going lower.

Market index futures: Tonight, all three futures are higher at 12:25 AM EST with ES up  0.17%  On Tuesday ES put in a small green spinning top but it was enough to break out of a descending RTC for a bullish setup.  Indicators now rising just off oversold, a completed bullish stochastic crossover, rising OBV and positive pin action in the overnight all point to continued higher on Wednesday.

ES daily pivot: Tonight the ES daily pivot rises from 1999.17 to 2013.58.  And even with that jump we're still above the new pivot so this indicator continues bullish.

Dollar index:  I refrained from calling the dollar lower last night in the face of an inverted hammer.  Good thing too because the dollar just kept right on climbing, up another half percent Tuesday.  The last time we had a monthly close this high was way back in March 2009.  And still no end in sight despite impossibly overbought indicators.

Euro:  And naturally the euro remained in freefall Tuesday, this time closing at 1.1554.  Extrapolating the descending RTC, it looks like the euro will hit parity by the end of the year.  Remember, you heard it here first.

Transportation:  Last night I wrote "This one looks like there's more upside left" and indeed there was with the trans up a nice 0.96% on Tuesday.  This green marubozu also broke out of the descending RTC for a bullish setup, completed the bullish stochastic crossover, and sent the indicators higher (except for RSI which in an unusual move, went a bit lower).  But it looks like the rally isn't over yet.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    6      3       1           1       0.700    755

     And the winner is...

All the positive signs from last night remain in place tonight so, ECB or no, I'm just going to go ahead and call Wednesday higher.

Single Stock Trader

VZ gained a bit more on Tuesday but hit its upper BB again though on a tall dragonfly doji.  With overbought indicators, I'd not buy here.  If anything it might be time to start thinking about a quick short except that this isn't a good week for it, not with the ECB in the wings.

Tuesday higher

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

• Tuesday higher.
• ES pivot 2011.75.  Holding above is bullish
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: waiting on new VZ entry.

Recap

Well after a three-day weekend, there's not much to recap.  However, we'll cut right to the chase because the big news this week is the imminent announcement of QE from the ECB and that's sure to be a market mover.  So just bear in mind that  my call right now is entirely modulo ECB.

The technicals

The Dow:  On Friday the Dow had a nice day with a bullish engulfing pattern that just touched its lower BB.  The stochastic is close to a bullish crossover.

The VIX:  On Friday the VIX put in a classic bearish engulfing pattern that just touched the upper BB for a 6.43% loss and a bearish stochastic crossover .  So this one looks lower Tuesday.

Market index futures: Tonight, all three futures are higher at 12:18 AM EST with ES up  0.15%, perhaps in anticipation of an ECB move.

ES daily pivot: Tonight the ES daily pivot rises again from 1999.17 to 2011.75. Even at that we remain above the new pivot so this indicator remains positive.

Dollar index:  On Friday the dollar broke out of a seven day congestion zone but with an inverted hammer that just touched its upper BB.  This might be a sign of a move lower, but lately that's always a risky call.

Euro:  The euro just keeps right on sinking.  Nothing to see here, move along...

Transportation:  Like everything else the trans on Friday made a big bullish engulfing candle, up 1.25%, turning all the indicators upwards.  This one looks like there's more upside left.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      3       1           1       0.667    751

     And the winner is...

Technically, I'm seeing enough positive signs to call Tuesday higher.  But that's all pending whatever the ECB announces.  QE comes out, we look like heroes.  No QE and we're zeros.  For that matter, it may not happen on Tuesday at all.  It's just wait & see right now.

Single Stock Trader

VZ had an unexpected breakout on Friday that took it right to its upper BB.  We missed that move.  But seeing as we're now overbought and at resistance, I want to wait and see what Tuesday brings here.

Monthly update

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

• Monday closed.
• 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

The market is of course closed on Monday but I thought I'd just make a few comments on the monthly charts.  It never hurts to step back from the trees and take a look at the forest.

The technicals

The Dow:  I'll comment on the SPX here as a TickerSense poll participant, rather than the Dow.  They're both highly correlated anyway.  Here I note that the SPX has exited its monthly rising RTC.  This is a bearish setup.  But what concerns me is that we're still fairly overbought.  We had another such bearish setup back in October, but we were much close to oversold back then.  That implies that there's more potential downside here.  It's not a bearish trigger yet, but it's making me cautious about the upcoming month.

The VIX:  In the past four months, the VIX has made three stabs at its monthly 200 MA.  We also have a completed bullish monthly stochastic crossover.  The longer the time period, the stronger these indicators are, and this one looks like it's ready to move higher.

Market index futures: Tonight, all three futures are lower at 12:57 AM EST with ES down 0.07%, though there's not much to read into this with another holiday-shortened week.  On Friday though ES did put in a big classic bullish engulfing candle that honestly caught me by surprise.  The indicators are now oversold and so this chart is finally looking bullish to me, though we have one more day to mull it over.

ES daily pivot: Tonight the ES daily pivot rises from 1998.17 to 1999.17. We are now back above the pivot so this indicator turns bullish.

Dollar index:  With a monthly RSI of 100 the dollar is about as overbought as it gets.  And it just happens to be right at resistance from the June 2010 highs.  All I'm waiting for now is a reversal candle like we saw in 2010 to call the end of this dollar rally.  And I think it's coming soon.

Euro:  Ah the poor euro.  Its monthly RSI has hit zero but there's still no sign of a reversal as it continues to dribble down its lower BB.   I was half-kidding when I suggested last week it was going to parity with the dollar.  Now, after the Swiss bombshell  I'm not kidding so much anymore.

Transportation:  Here's a worrisome monthly chart.  You'd think lower oil would help the trans but nooo, we got a tall hanging man last month and a steep red marubozu so far this month.  And with the indicators on the longest monthly overbought streak since 1997 this chart looks ready to roll over to me - on a monthly basis - with all the negative Dow Theory implications.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      3       1           1       0.667    751

     And the winner is...

No call tonight.

Single Stock Trader

No changes tonight.