Friday depends on ES pivot

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

• Friday depends on ES pivot.
• ES pivot 2114.50..  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ now a swing trade buy.

Recap

Open letter to Greece: would you puh-leeze just declare bankruptcy, default on all your bills, and get this agony (nice Greek word) over with already?  Instead of draaaaging out the inevitable.  I hope you enjoyed your little snit today.  Tanking the US markets is not going to help you out.  You should have thought of this before going massively into debt.  Baah!

The technicals

The Dow:  Yes it was good I was cautious about calling the market higher Thursday despite positive-looking charts.  As it turns out, the futures knew what they were talking about when they were sagging a bit in the early morning hours.  And in the end those freakin' Greeks were good for a 171 point pounding for the Dow.  Like people are going to start brushing their teeth 1% less often?  Or use 1% less toilet paper?  No, this is insanity.  But oddly enough, the low of the Dow was right on the lower BB.  And RSI did not move any lower.  Recent big drops that touched the lower BB have results in big gains within two days.  This may be a buying opportunity.

The VIX:  And tellingly, the VIX gained 7.69%, less than you'd think on some ho-hum end-of-the-world news with a tall spindly spinning top that pierced its 200 day MA before retreating.  And RSI actually moved lower.  00 MA touches usually mark tops for the VIX and this time doesn't look any different.

Market index futures: Tonight, all three futures are lower  at 1:08 AM EDT with ES down 0.07%.  ES had a bad day Thursday, though not any worse than its already had twice before this month.  But this one drove it oversold.  There's still not a reversal candle but I think this selling's overdone and we're due for a bounce soon.

ES daily pivot: Tonight the ES daily pivot drops again from 2114.50  to 2102.25.  And even with that ES remains below its new pivot one again so this indicator continues bearish.

Dollar index:  The dollar has been in a steep descending RTC for a week now but finally manage a green candle on Thursday, even if the result was a 0.02% decline.  With indicators now finally oversold and a stochastic getting down to bullish crossover levels, I'd not be surprised to see a move higher on Friday.

Euro:  And on Thursday the euro put in a somewhat asymmetric spinning top/inverted hammer that peaked the indicators at overbought while remaining in a rising RTC.  The new overnight is  different story - down a big 0.34% so far to drop out of said rising RTC for a bearish setup and on the cusp of a bearish stochastic crossover.  After considerable reflection I think the euro's headed south on Friday.

Transportation:  On Thursday the trans dropped 0.86%, less than the Dow.  They even remained in their rising RTC and have still not hit overbought.  But this read candle is still technically damaging so I'm not going to call the trans higher just yet.

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      7      6       5           4       0.647    976 April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581 June       2      0       1           1       1.000     94

     And the winner is...

Just because the market is down big doesn't mean it can't go lower.  The SPX Hi-Lo indicator fell on Thursday but not quite far enough to serve as a reversal sign.  The candles are all bearish so the only reversal there would come in the form of a relief rally or DCB and I don't see either of those right now.  Still I'm quite concerned about he VIX touching its 200 day MA with a star as that's just about always associated with a move lower.  So I'm going to do another conditional call: if ES can claw back up over its new pivot by mid-morning Friday, we'll close higher, otherwise lower.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

Huh - last night I wrote "show me the reversal".  And on Thursday VZ showed me, after a 2% plunge (are you using the phone 2% less often?) fell off a cliff with a giant gap-down inverted hammer on huge volume leaving all the indicators very oversold.  That's it - I'm in.  VZ is now(finally)  a swing trade buy.

Thursday uncertain

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

• Thursday uncertain.
• ES pivot 2114.50..  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

We called Wednesday higher and I consider myself fortunate the Dow did just that given that ti spent most of the day moving lower after a big jump out the gate.  But that was then and this is now so let's look at the charts as usual and think about Thursday.

The technicals

The Dow:  On Wednesday the Dow confirmed Tuesday's spinning top by moving higher - but did it with another reversal sign, a giant lopsided spinning top.  Aside form that though we exited the descending RTC for a bullish setup, got a bullish stochastic crossover, and the indicators are still oversold.  So the balance of all that is a bullish bias.

The VIX:  Last night I spotted "a decent topping sign" in the VIX and down it went on Wednesday, off 4% on a gap-down doji star that still left the indicators overbought and formed a bearish stochastic crossover.  That leaves plenty of room to run lower.

Market index futures: Tonight, all three futures are lower  at 12:42 AM EDT with ES down 0.14%.  Last night I noted a bullish stochastic crossover and that played out nicely on Wednesday sending ES higher for its best day in a week.  Indicators are still a ways from overbought but the overnight seems to be having trouble advancing so I'm not sure about Thursday here.

ES daily pivot: Tonight the ES daily pivot rises  again from 2105.58 to 2114.50. And that plus an overnight sag in ES is enough to put it back below its new pivot so this indicator now turns bearish.

Dollar index:  Last night I wrote that there's "nothing bullish on this chart".  Which was true, with a 0.38% drop on Thursday for two black crows.  That was enough to send the indicators oversold but not enough for a bullish stochastic crossover so until I see a reversal sign, I'll have to go with more downside here.

Euro:  And last night I also wrote that "this one looks like it's still got room to run".  Which it did nicely on Wednesday, closing at 1.1260 to keep the uptrend alive but also sending the indicators very overbought,  We're right on a resistance line but I'd be cautious here.  This one could go either way on Thursday.

Transportation:  Last night I wrote that "this one looks higher for Wednesday.".  And that's where the trans went, up 1.22%.  That was the payoff on the bullish RTC trigger.  So with indicators still rising and no bearish signs in sight, I'd say there's still room for further gains.

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      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       2      0       0           1       1.000     94

     And the winner is...

On the surface, things are looking fairly bullish tonight.  I'm a bit concerned though that the indicators may have been a bit distorted by the early market advance and subsequent sell-off.  I also note that the futures are trending lower in the overnight.  But that alone isn't enough to make be turn bearish particularly in the absence of any other overtly negative signs.  Therefore I will have to content myself to call Thursday uncertain.

Single Stock Trader

Last night I mentioned the need for caution here and while VZ did move higher on Wednesday, it ended lower following up a spinning top with an even bigger spinning top.  This one actually pierced the 200 day MA and we remain oversold.  But that leaves us where we were last night - show me the reversal.

Wednesday higher

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

• Wednesday higher.
• ES pivot 2105.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ near a swing trade buy.

Recap

Last night I made a conditional call, the condition being ES managing to get above its pivot by mid-morning in order for the market to close higher.  Well it did make a breakout but it wasn't til noon which was too late and the market did indeed close lower.  This doesn't always work but it works often enough to keep in the toolbox.  So on we go to Wednesday to see what's what.

The technicals

The Dow:  On Tuesday the Dow put in a nice doji star at the lower end of Monday's big dump.  That's a decent reversal sign modulo the indicators which are still aways from oversold.  So I'd prepare for a reversal, though it's not a given at this point.

The VIX:  Well I was certainly wrong about the VIX on Tuesday.  It did not go lower on a spinning top, instead it rose another 1.93% - on a second spinning top!.  But this one very nearly touched both its upper BB and 200 day MA, coincidentally both around 15.20 before falling back.  That, along with now overbought indicators is a decent topping sign in my book.

Market index futures: Tonight, all three futures are higher at 1:38 AM EDT with ES up  0.09%.  On Tuesday ES followed Monday's spinning top with another, even larger spinning top.  There's no guidance from that but I do note a stochastic about to form a bullish crossover and the overnight seems to be supporting that, at least for now.

ES daily pivot: Tonight the ES daily pivot falls  from 2109.08 to 2105.58. And that was enough to put ES back above its new pivot so this indicator turns back to bullish again.

Dollar index:  The dollar got hammered on Tuesday with a tall gap-down 1.63% marubozu that sent the indicators off overbought and moving towards oversold.  Nothing bullish on this chart.

Euro:  And correspondingly the euro had a major boost on Tuesday taking me completely by surprise to close back to 1.1169.  Indicators continue to rise but are still a ways from overbought so this one looks like it's still got room to run.

Transportation:  The trans have seen a week of choppy losses that have been dribbling down the lower BB.  Tuesday may have been the end as the trans rose in a bit of bullish divergence on a day the rest of the market was down.  It was a spinning top but also a bullish trigger on a falling RTC exit.  We also got a bullish stochastic crossover so I'd hazard this one looks higher for Wednesday.

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      7      6       5           4       0.647    976 April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581 June       1      0       0           1       1.000     30

     And the winner is...

Hmm, the crystal ball isnt' 100% clear but what I am seeing is signs of a reversal so I'm going to go out on a limb and call Wednesday higher.

Single Stock Trader

Lat night I still wasn't ready to get onboard VZ and good thing too because it was down again on Tuesday.  This time with a spindly spinning top that just about touched its 200 day MA before bouncing off.  We remain in a downtrend but the indicators are getting quite oversold.  These are levels from which reversals happen but I'm still a bit cautious here.  If it's not going lower again at the open on Wednesday, it might be worth putting on a small position.

Tuesday depends on ES pivot

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

• Tuesday higher only if ES breaks above pivot, else lower.
• ES pivot 2109.08.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ is still not a swing trade buy.

Recap

After a decent start, the bears made a valiant attempt to knock 'em down into the close on Monday but in the end history prevailed and the Dow  managed to finish  up 30 points.  Hey, we'll take it - we have to.  So "sell in May" was a bust - will it now be "swoon in June"?  Only way to tell is by grilling the charts.  So let's light  the Kingsford and look towards Tuesday.

The technicals

The Dow:  Despite a modest gain on Monday, the Dow remains in a nearly two week-long downtrend.  We now have a fat spinning top that is a reversal sign but one which requires confirmation.  So it's no go here.

The VIX:  Wow - on Monday the VIX put in the supernova of all doji stars hitting 14.86 before collapsing back to 13.97.  Sitting on top of Friday's action with indicators nearly overbought this makes me want to give better than even odds we go lower on Tuesday.

Market index futures: Tonight, all three futures are essentially unchanged at 12:18 AM EDT with ES down one whole tick.  On Monday ES gave us a tall spinning top at the lower end of Friday's dump, just touching its lower BB.  Indicators are mixed though.  But that BB touch has been a good reversal sign lately so a move higher from here is not out of the question.  The overnight though doesn't seem to be supporting that forming a dark cloud cover at the moment.

ES daily pivot: Tonight the ES daily pivot dips from 2110.33 to 2109.08. An odd late-evening dive for no immediately apparent reason now puts ES below its new pivot so this indicator turns bearish.

Dollar index:  Last night I noted the possibility of a reversal in the dollar but insisted on confirmation.  Well we got it on Monday with a nice 0.50% gain.  Unfortunately, that gain was so big it brought us nearly back to resistance so with the indicators remaining overbought and the past week really range-bound we need to wait again for some definitive sign of movement.

Euro:  On Monday the euro fell out of a short rising RTC for a bearish setup.  Last night I wrote that "I'd not be surprised to see a lower close on Monday."  And I wasn't, as we went back down to 1.0935.  We're also getting a stochastic curving around for a bearish crossover from a low level and those are generally good for at least a day of continued lower.  The overnight seems to be supporting this.

Transportation:  Here's something interesting - after underperforming for the last three centuries, the trans on Monday beat the pants off the Dow with a monster 1.14% pop to zoom out of their long-running descending RTC for a bullish setup and force a bullish stochastic crossover.  Indicators have now bottomed at oversold so this all looks higher on Tuesday to me.

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      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       1      0       0           0       1.000     30

     And the winner is...

The second day of June is historically even better than the first day according to the Stock Traders Almanac.  But what we're getting tonight is a series of reversal signs that all require confirmation.  And right now the futures are taking a turn south.  And I always hate to bet against the futures.  But we are so close to the ES pivot that this seems like a good time to make a conditional call: if ES can break back above its pivot by mid-morning Tuesday, we'll close higher.  If not, we close lower.

Single Stock Trader

Turns out I was right to wait on this one.  VZ went down another 22 cents on Monday after days of noodling about,  It just managed to touch its lower BB which is interesting but the indicators have yet to hit oversold so I'm still sitting on the sidelines.

Monday higher

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

• Monday higher.
• ES pivot 2118.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ is not a swing trade buy.

Recap

Last Thursday night I wasn't at all sure which way we were going on Friday but I sure didn't expect a 115 point dump in the Dow.  That makes things interesting so let's go right to the charts to evaluate the implications.

The technicals

The Dow:  On Friday the Dow confirmed a hanging man with a triple digit loss to break support at 18,047 and just barely hang on to 18K.  But this big drop had the feel of a washout tome, driving the indicators well into oversold and curving the stochastic very close to a bullish crossover.  Though this isn't a bullish candle, this is the zone from which rallies come.

The VIX:  And on Friday the VIX tried to rally but in the end managed only a meager 4% gain on a tall inverted hammer.  That also caused the indicators to top just short of overbought and left the stochastic about to form a bearish crossover.  That makes this chart look lower for Monday.

Market index futures: Tonight, all three futures are higher at 12:17 AM EDT with ES up  0.17%.  ES dropped on Friday but it continues to find support right around 2105.  Note that this is actually YTD support, not just from the past week.  And that seems to be holding into the Sunday overnight.   I'd be wary of going short at these levels.

ES daily pivot: Tonight the ES daily pivot falls again from 2118.33 to 2085.92. So that still leaves ES below its new pivot but now only just barely and this indicator is now only marginally bearish.

Dollar index:  The dollar has been mirroring the trans lately (see below).  Everything I wrote there applies here too.

Euro:  Last Thursday night I wrote to look for  "a higher close on Friday for the euro" and indeed it  managed to push higher again, to 1.0983 but with a spinning top.  Fortunately, we've got some Sunday overnight action to help us out here and that is guiding lower, confirming the spinning top.  So despite oversold indicators and a bullish stochastic crossover, I'd not be surprised to see a lower close on Monday.

Transportation:  After a big move lower Thursday, the trans hit the brakes on Friday to end with a perfect doji star, though one hanging right above a yawning gap, with overbought indicators and a completed bearish stochastic crossover.  This is the sort of reversal candle that absolutely requires confirmation before calling higher.

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      7      6       5           4       0.647    976 April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581

     And the winner is...

The first day of most months is generally bullish and June is no exception despite its overall crappy reputation.  And while they're not a screaming buy, technically the charts tonight are at least entertaining the possibility of a reversal soon.  So I'm just going to go ahead and call Monday higher.

Single Stock Trader

VZ remains unsettled with two inverted hammers and then four spinning tops in a row.  I can't really bless this unless and until I see a better edge than this.  Patience, as always, is the key.