Friday uncertain

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

• Friday uncertain.
• ES pivot 2094.25.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a buy.

Recap

The recent mean reversion sort of action we've been seeing after big gains the past few days asserted itself again on Thursday and trumped my call for a higher close.  I even mentioned it when I wrote "Ordinarily I'd say that after such a sudden large one-day move we'd be due for a pause".  Too bad I didn't stand by it.  Oh well - one more day to go and this crazy week is done.

The technicals

The Dow:  The Dow has alternated up and down for 11 of the last 12 now in an odd sort of stair-step rise that has consistently dragged the indicators higher.  On that alone there's not much to go by.  The only thing I see that's cause for concern is the stochastic which has now flattened out in preparation for a bearish crossover.  I'd be cautious here on Friday.

The VIX:  The VIX moved just 0.72% higher on a day the Dow fell triple digits in a sort of bullish divergence, unable to break back above its 200 day MA.  Nevertheless we are now oversold so it's reasonable to assume the next VIX trend will be higher.

Market index futures: Tonight, all three futures are higher at 12: AM EDT with ES up 0.11%  On Thursday ES put in a vague approximation of a dark cloud cover along with sending indicators overbought.  The stochastic is primed for a bearish crossover so despite a small run-up in the late evening hours, this chart has at least the suggestion of a reversal.

ES daily pivot: Tonight the ES daily pivot rises from 2089.58 to 2094.25.  That's enough to put ES back below the new pivot so this indicator now turns bearish.

Dollar index:  The dollar on Thursday recouped about 2/3 of its losses Wednesday in a move that sent the indicators off overbought.  That still leaves us in an official descending RTC though, the first downtrend I've seen here since last October.  What does this mean for the market?  Hard to say - the dollar has seemingly decoupled from the stock market lately.  It's also still not clear that the current trend means anything in a larger monthly context.

Euro:  The euro by contrast advanced nicely on Thursday to close at 1.0753 but is in the process of giving it all back in the overnight suggesting that the action of the last three days was nothing more than a multi-day fake-out.

Transportation:  The trans were completely unchanged Thursday after a long-legged doji that coupled with highly overbought indicators and a stochastic just inches away from a bearish crossover all suggest a move lower on Friday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183 
March      3      5       3           3       0.545    354

     And the winner is...

There are some indications of a move lower for Friday but they generally require confirmation.  But with this being a triple-witching day with no doubt all the usual accompanying gyrations, my usual policy is to stay away.  So I'm just calling Friday uncertain.  That's all she wrote.  See you again Sunday night!

Single Stock Trader


At least I was correct in staying away from VZ which moved a bit lower Thursday and is now hovering just above its 200 day MA.  With a spinning top, overbought indicators, and a stochastic that just formed a bearish crossover, I'd say there's more downside coming for VZ.

Thursday higher

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

• Thursday higher.
• ES pivot 2089.58.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a buy.

Recap

There goes the patient!

Wow.  The Night Owl is astonished!  We've been hearing the talking heads blathering on for weeks about whether Wednesday's Fed statement would contain the P word.  Well in a truly masterful sleight of hand worthy of Houdini himself, Janet Yellin managed to remove the patient before the doctor even realized he was gone.

And Mr. Market, clearly impressed with such artful wizardry, responded enthusiastically by jacking up the Dow a handy 227 points, and that was after being down over 100 before lunch.  And it left all the shorts who were expecting a rate hike  red-faced with, uh, their pants down.

It was a day trader's dream, that's for sure, but unfortunately nothing we could capitalize on as swing traders.  I decided to just skip all the hoop-la based on the risk involved but was rewarded anyway simply by virtue of the pure theatrics.  Have you ever seen so many people hanging on a single word, "patient"?  Yessirree - that was a hot one, Moe!  You don't see that every day.

OK, OK, let me catch my breath and get back to business here as we see what impact this sudden turn of events might have on Thursday.


The technicals

The Dow:  Last night I said Wednesday would be news-driven and to the complete surprise of absolutely no one, it was, as the Fed's re3moval of the word "patient" sent the Dow shooting up 1.27% the instant the news came out.  After factoring out the excitement though, we're left with 11 of the last 12 sessions reversing direction.  On that basis alone, Thursday will be lower.  There's also the buyer's regret function at work.  The last two big up-candles have been followed by a down day.  And now the indicators are nearly overbought.  But in the absence of an actual bearish reversal sign, this one is too tough to call.

The VIX:  Auntie Janet let a lot of hot air out of the VIX on Wednesday as it deflated a big 10.79% gap-down to crash right through its 200 day MA dragging all the indicators along for a ride towards oversold.  There's nothing bullish about this chart tonight.

Market index futures: Tonight, all three futures are higher at 1:25 AM EDT with ES up  0.17%  ES had a great day Thursday courtesy of Ms. Yellin enough to drive the indicators overbought but not enough to fold over the stochastic for a bearish crossover.  There's still a bit of room to run to the next resistance line at 2115 too and I'd expect ES to touch it before taking a leg down.

ES daily pivot: Tonight the ES daily pivot jumps from 2072.50  to 2089.58.  We remain well above the new pivot so this indicator continues bullish.

Dollar index:  On Wednesday the dollar - gasp - fell, and it fell hard, down 1.177% for its worst one day performance since, oh I don't know - since the left hand edge of my daily chart and I'm too lazy to scroll back looking for it.  A good while anyway.  And that established a new descending RTC, meaning last month's uptrend is now officially over.  Is this the exponential blow-off top in the dollar we've all been waiting for?  Too soon to tell yet, but given the frenetic pace of the year-long run-up, it might be.

Euro:  Wow - we're just full of surprise today, aren't we.  The euro took off like a rocket to close at 1.0753.  And the overnight is gapping even higher, exiting the latest descending RTC and effectively derailing my call for parity by the end of March.  With a new rising RTC in place, ain't gonna happen just yet.  On the other hand, it remains to be seen if this mini-rally has any legs and judging by the overnight action, that's in some doubt too.

Transportation:  The trans on Wednesday was up like everything else but with a hanging man.  We're still in a rising RTC though and the indicators aren't quite yet overbought so it's still to early to calla  top here.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      3      4       3           3       0.600    471

     And the winner is...

Ordinarily I'd say that after such a sudden large one-day move we'd be due for a pause and perhaps some profit-taking.  But given that it's not Friday yet and there's no bearish signs to speak of on the charts, I think they're going to knock 'em higher again Thursday to (possibly) do profit-taking on Friday.  So it's Thursday higher for me.

Single Stock Trader

After a nice pop Wednesday like everything else, VZ is hard up against YTD resistance with nearly overbought indicators.  It's been cycling nicely so far this year so I'd wait for the next pullback before getting back on this bus.

Wednesday uncertain

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

• Wednesday uncertain....
• ES pivot 2072.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ possible reversal - no trade ahead of the Fed.

Recap

With everyone pretty much on Fed watch waiting to see if the word "patience" puts in an appearance, and with me still not feeling so hot, this seems like the perfect time to take another sick day.  I'd be calling Wednesday as uncertain anyway.

The technicals

ES daily pivot: Tonight the ES daily pivot falls again from 2067.58  to 2072.50.  We remain above the new pivot so this indicator remains bullish, keeping in mind that I expect Wednesday to be news-driven.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      3      4       2           3       0.600    471

     And the winner is...

I don't have the hubris to make a call ahead of such a big Fed announcement so it's simply Wednesday uncertain as we wait for the fireworks.

Single Stock Trader

I definitely wouldn't be playing VZ ahead of the Fed.

Tuesday uncertain

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

• Tuesday uncertain....
• ES pivot 2099.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ - no analysis.

Recap

Looks like my conditional call trick worked again.  ED broke away from its pivot around 4:35 AM and never looked back, and so the market closed higher.  Tonight though, the Night Owl has come down with a cold and a sore throat.  One of my main rules is never to commit TWI (Trading While Ill) so we're just going to update the stats, call it a night and get some rest   We'll see how things look tomorrow.

The technicals


ES daily pivot: Tonight the ES daily pivot rises from 2052.83 to 2067.58. We remain above the new pivot so this indicator remains bullish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183 March      3      4       1           3       0.600    471

     And the winner is...

Taking a break.  With the Fed announcement Wednesday, I'd probably call the next two days uncertain anyway.

Single Stock Trader

On hold tonight.

Monday depends on ES pivot

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

• Monday higher only if ES breaks above it pivot, else lower.
  
• ES pivot 2052.83.  Holding below is bearish.
• Resr of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ past the 50% point of the current move.

Recap

Well my call for Friday higher was just flat out wrong.  The Dow went nowhere but down and that was that despite a late afternoon rally that still gave us a triple digit loss.  So we pick up the pieces and move on to Monday for what promises to be another fun-filled week complete with Fed follies and triple-witching.

The technicals

The Dow: The Dow on Friday gave up half of Thursday's gains, unable to make any headway at all and ending up right back in its descending RTC.  That pretty much quashes what looked like a trend reversal as the stochastic is now threaded out.  Looks lower to me on Monday.

The VIX:  Similarly, the VIX which looked for all the world to me ready to move lower Friday instead went higher by 3.76%.  Though here, the indicators are still just only off overbought and look to have some downside momentum behind them so I'm not sure this inverted hammer means a move higher on Monday.

Market index futures: Tonight, all three futures are higher at 12: AM EDT with ES up 0.11%  ES fared even worse than the Dow on Friday, retracing all of Thursday's gains before recovering maybe 1/3 to remain in a descending RTC that's now back to the beginning of March.  Interestingly, the overnight pin action so far is forming a nice hammer, so there may yet be some hope here for Monday.

ES daily pivot: Tonight the ES daily pivot falls again from 2056.25 to 2052.83. We're now below the new pivot, though not by much, so this indicator becomes bearish.

Dollar index:  Once again, the dollar just kept on steaming higher, up another 0.89% Friday.  I've given up saying how long it's been because it's right off the historical extent of what eSignal will serve up.  I hear it's like 12 years now.  Bottom line, there's still no end in sight.

Euro:  And of course similarly, the euro kept right on track on Friday for its appointment in Parityville, closing this time at 1.0472. its lowest level since the late Middle Ages.  My call for parity by the end of March remains on track - the station is just coming into view in the distance with less than five cents to go.

Transportation:  The trans looked particularly weak on Friday with a dark cloud cover for a 0.67% loss.  Though we're not yet overbought,this doesn't look good for Monday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      3      4       1           2       0.556    471

     And the winner is...

The charts aren't looking too hot tonight but it's also Sunday night - the toughest call of the week.  And we're entering a triple-witching week.  And we've got a Fed announcement that will be even more closely watched than usual, all of which points to a tough week for forecasting.  I expect  some meandering ahead of the Fed followed by enhanced news-driven and op-ex volatility afterwards.  Should be interesting to say the least.

In the meantime, conditions look promising for another conditional call given the general uncertainty and the proximity of ES to its pivot.  So if ES can manage to break above its new pivot by mid-morning Monday we'll close higher.  If not, we close lower.  And that's that, Jack.

Single Stock Trader

Bah - I pulled the plug on the current trade Friday at 47.92 and then watched VZ keep moving higher.  Oh well - I didn't want to be long over the weekend on a down Friday.  We still took home a decent profit of 64 cents for two days work.  While it doesn't look bearish right now, I wouldn't be getting on board here - I think the majority of the current move up is done.