Friday lower

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

• Friday lower.
• ES pivot 2109.08.  Holding below is bearish.
• Next week bias uncertain  technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still a swing trade hold.

Recap

Last night I thought we could get a doji on Thursday and that's just what happened, with a nice inverted hammer sitting right at the top of Wednesday' big pop.  Let's move on to the end of the week and see where Friday is going.

The technicals

The Dow:  On Thursday the Dow gained 39 points as indicators continued rising off oversold.  The inverted hammer is a bearish sign and Friday being Friday, it's possible traders may be wanting to bank their profits rather than remaining long into a weekend beset with geopolitical risk.  So I'm not going long at this juncture.

The VIX:  Last night I wrote that "nothing bullish to be seen on this chart."  And indeed there wasn't with the VIX down another 2.8% on a gap-down spinning top.  Indicators continue falling towards oversold (but not there yet).  We now have 2/3 of a morning star but that requires confirmation.  So the best I can say is that the VIX may be moving higher within a few days.


Market index futures: Tonight, all three futures are lower  at 12:13 AM EDT with ES down 0.18%.  On Thursday ES put in a small spinning top sitting n the high of Wednesday's advance.  This is a typical topping sign and with a non-trivial retreat in the overnight, I'm not optimistic for Friday.

ES daily pivot: Tonight the ES daily pivot rises again from 2098.33 to 2109.08. And that move plus a sagging ES in the overnight is enough to place it below its new pivot so this indicator turns bearish again.

Dollar index:  Last night I wrote that "I wouldn't go short the dollar right now".  Good thing too because the dollar rose 0.34% on Thursday, though on a funny long red marubozu.  So is this a morning star or not?  It looks like the dollar is having trouble getting into gear right now.

Euro:  Last night I wrote that "I'm still not on board the euro."  Just as well too because the euro looks topped out, falling back to 1.1263.  That's three reversal candles in a row now: star, inverted hammer hanging man.  With overbought indicators, the other shoe has to be dropping pretty soon.  And the overnight is guiding lower so I'd say we're looking at another lower close on Friday.

Transportation:  Last night I didn't want to believe the bullish confirmation of Tuesday's hammer in the trans and it's too bad because they gained a solid 1.05% on Thursday with a tall green marubozu.  That also formed a sharp bullish stochastic crossover with indicators still a ways from overbought.  So with no resistance til 8505 there are now no bearish signs on this chart.

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       3      1       2           3       0.857    327

     And the winner is...

After two reasonably good days the market is feeling toppy tonight with a number of reversal candles on the charts.  It doesn't help that it's a Friday coming up.  So I'm just going to go ahead and call Friday lower.  I'll be happy as always to be proven wrong.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

Last night I called VZ a hold and it was a good call as VZ gained some more on Thursday.  It is now in fact in a new rising RTC and still oversold.  With a new bullish stochastic crossover I'd say there seems to be more upside potential than downside risk here.

Thursday uncertain

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

• Thursday uncertain.
• ES pivot 2098.33.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ now a swing trade hold.

Recap

The market popped nicely on Wednesday with a broad-based advance as the Dow gained 236 points.  Now this definitely changes the picture so let's query the charts and see what they have to say.

The technicals

The Dow:  Last night the Dow was showing the perfect setup for a rally with a tall doji star sitting on it slower BB with oversold indicators.  And sure enough on Wednesday we got a big pop to propel the Dow right out of its descending RTC for a bullish setup and its best day in over a month.  There';s nothing bearish about this other than the fact that the Dow usually likes to rest up a bit after a big move up and I think hat may be entirely possible here.

The VIX:  Last night I wrote that " there's no reason to believe the VIX selling is done yet."  And that was true, with the VIX dumping 8.64% in Wednesday with a gap-down marubozu that drove the indicators off overbought and rejecting the 200 day MA in a big way.  And that still leaves nothing bullish to be seen on this chart.

Market index futures: Tonight, all three futures are lower at 1:21 AM EDT with ES down  0.11%.  On Wednesday ES had its best day since April 6th to zoom right out of its descending RTC for a bullish setup.  The bullish stochastic crossover is now complete, Tuesday's doji is confirmed, the bounce off the lower BB is confirmed, all the indicators are rising off oversold so there's really nothing technically bearish here.

ES daily pivot: Tonight the ES daily pivot jumps from 2077.83  to 2098.33.  But even that move wasn't enough to put ES below its new pivot so this indicator remains bullish.

Dollar index:  Last night I mentioned support as being the dollar's only savior and on Wednesday that gave way like a balsa wood bridge with a gap down star for a half-percent loss.  But with indicators now oversold this is 2/3 of a bullish morning star so we need to see how this ends.  I wouldn't go short the dollar right now though.

Euro:  Huh - I didn't think the euro could do it but on Wednesday it rallied to break resistance and close at 1.1317.  But is was on a tall lopsided spinning top, almost inverted hammer and the new overnight is guiding lower so with indicators continuing overbought I'm still not on board the euro.

Transportation:  I don't know why I wasn't willing to commit to the trans last night.  On Friday they confirmed Tuesday's hammer with a nice 0.68% jump.  The resulting spinning top is misshapen though and the indicators are confused, so once again it's not clear where this one is headed.

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       3      1       1           3       0.857    327

     And the winner is...

All the charts are bullish tonight - too bullish.  It is of course common for the market to pause after a big run up and this case looks typical.  I'm expecting a small move, possibly a doji and as such the logical course of action is to call Thursday uncertain.

Single Stock Trader

I said last night VZ was still worth buying and it did indeed gain a bit more on Wednesday though its backing its way higher, with two successive red spinning tops.  But that double spinning top is certainly a warning so I'm moving this one from a buy to a hold.

Wednesday higher

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

• Wednesday higher.
• ES pivot 2077.83.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still a swing trade buy.

Recap

These counter-trend calls are always risky and I acknowledged that last night calling Tuesday higher.  And it almost worked too but for yet another late afternoon sell-off that ended the Dow down all of two and a half points.  Still that beats the recent triple digit losses we've been getting.  Does this mean a reversal is at hand? We scour the charts for clues.

The technicals

The Dow:  On Tuesday the Dow continued its skid down the lower BB but unlike the past two days it ended with a perfect doji star.  Along with indicators quite oversold and a very low stochastic about to form a bullish crossover indicators, I give this better than even odds of being a valid reversal sign.

The VIX:  Last night I wrote that "I still think we're due for some relief here." And it sure arrived, in the form of a 5.36% drop on Tuesday and some bullish divergence for the market.  I always say that the VIX tends to retreat after hitting its upper BB and this was no exception.   One day after closing above it and boom, down we went.  So with indicators still overbought there's no reason to believe the VIX selling is done yet.

Market index futures: Tonight, all three futures are finally higher at 12:40 AM EDT with ES up  0.13%.  On Tuesday ES put in a tall doji star trading entirely below the lower BB at the lower end of Monday's big dump.  Indicators remain oversold  and the stochastic has just made a bullish crossover so I'd hazard we go higher on Wednesday.

ES daily pivot: Tonight the ES daily pivot falls again from 2082.58 to 2077.83.   That drop plus and overnight rise in ES finally puts it back above its new pivot so this indicator now turns bullish.

Dollar index:  Last night I wouldn't commit to a higher dollar Tuesday and it was just as well as the buck sank another 0.16%.  The only things to suggest a reversal at this point are oversold indicators and being near support.

Euro:  Last night I wrote that "it's not clear [the euro] can sustain this momentum into Tuesday."  And indeed it couldn't, ending where it began with a perfect doji star.  So now we have resistance and a reversal sign.  I'd still not be going long the euro here.

Transportation:  They were makign all sorts of noise over on CNBC today about hte dismal state of the trans, and right so, IMAO.  Last night I pointed out a bunch of stuff that "all looks bad for Tuesday."  And it wasn't a disaster but the trans still moved another 0.33% lower.  And if you back out to the monthly chart you'll see that the trans peaked way back last November and have been  in a downtrend ever since.  This is part of the reason why I switched my TickerSense monthly SPX direction poll from bullish to bearish two weeks ago.  Even short-term doesn't look that good: we have a hammer but also a completed bearish stochastic crossover and falling indicators.

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      1       1           3       0.833     91

     And the winner is...

Tuesday had the feeling of a washout low.  Also the Morningstar Market Fair Value Index has hit 0.99 for the first time since last December 15th and that marked a bottom.  We have some decent reversal signs on the charts tonight so I'm going to go ahead again and call Wednesday higher.

Single Stock Trader

On Tuesday VZ lost a bit on a dark cloud cover but overall it looks like it still has much more upside potential than downside risk remaining quite oversold.

Tuesday higher

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

• Tuesday higher.
• ES pivot 2082.58.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still  a swing trade buy.

Recap

I guess just hitting the lower BB isn't always the panacea as Monday proved.  The Dow sank another 0.46% on another red marubozu again trading mostly below its lower BB. Things are looking pretty grim right about now but the current decline is still less than what we got back in early March.  Is there a reversal in out future?  Only the charts can say.

The technicals

The Dow:  The Dow finished right on session lows Monday and with three black crows, it ain't looking good.  Indicators are now oversold but not extremely so.  So there's really nothing technically bullish about this chart.

The VIX:  And the VIX really surprised me on Monday.  Instead of moving lower it jumped nearly 8% to close above its 200 day MA.  So much for the big bearish engulfing pattern.  However, in its stead, we now have a big dark cloud cover plus overbought indicators.  Usually when the VIX gets overbought like this it's headed lower.  So I still think we're due for some relief here.

Market index futures: Tonight, all three futures are finally higher at 12:46 AM EDT with ES up  0.08%.  On Monday ES extended it losing streak to three, remaining in a steep descending RTC and punching right through its lower BB and leaving the indicators all oversold.  That all looks bad.  The only ray of hope is that ES is actually rising in the overnight, the first time we've seen that in several days now suggesting that maybe bargain hunters are stepping up to the table.

ES daily pivot: Tonight the ES daily pivot falls again from 2092.83 to 2082.58. And even that still leaves ES below its new pivot so this indicator continues bearish.

Dollar index:  I also missed the dollar on Monday which instead of moving higher just collapsed, giving up all of Friday's gains and then some.  Indicators aren't even oversold yet so it's too early to call a move higher from here.

Euro:  And so of course I was also wrong about the euro which instead of moving lower posted a big gain all the way back to 1.1278 on Monday on a big bullish engulfing pattern.  But indicators remain quite overbought and the euro is now at weekly resistance so it's not clear it can sustain this momentum into Tuesday.

Transportation:  Last night I was reluctant to call the trans higher Monday because "it's not clear they have enough gas in the tank to move higher Monday."  And holy moly, the tank was on E as the trans fell a giant 2.06% Monday, dropping right out of their rising RTC for a bearish setup, forming a bearish stochastic crossover, and sending the indicators lower.  That all looks bad for Tuesday.

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           3       1.000     94

     And the winner is...

We're starting to see some technical signs that the selling may be abating, particularly in the futures and the VIX.  I'll also note that the Morningstar Market Fair Value Index has now hit 1.00, indicating a lot of foam has come out of the market.  The last time we were at this level as May 6th and the next day began a two day rally.  But we remain in a long downtrend and the Dow chart is pretty ugly right now.  So I'm just going to go out on a limb, cover my eyes, and call Tuesday higher.

Single Stock Trader

Last night I blessed VZ as a swing buy and it did indeed move higher on Monday, with a green spinning top that suggests bottoming.  And after that it still looks like a reasonable entry point.

Monday depsned on ES pivot

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

• Friday depends on ES pivot.
• ES pivot 2092.83.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ now a swing trade buy.

Recap

After a brief attempt to break above its pivot at 3 AM last Friday, ES never threatened again and the market closed lower as I had predicted with my patented conditional call.  A Friday close lower is a bearish sign and a subsequent Monday close lower would confirm it.  So let's figure out if that's going to happen, pronto

The technicals

The Dow:  The Dow has now been falling basically for two weeks and it finally hit its lower BB on Friday.with a stubby red spinning top that left the indicators oversold, though not wilding so.  That's a reversal sign in my book but one which requires confirmation - falling knife etc.

The VIX:  Last Thursday night I wrote that "200 MA touches usually mark tops for the VIX and this time doesn't look any different."  And that was true, with the VIX falling 3.4% on Friday on a tall red bearish engulfing pattern after making one last stab at its 200 day MA.    And that gave us one of those unusual cases where the VIX and the market were both down the same day.  It was also enough to drive the stochastic lower so overall I'd say the VIX looks lower again on Monday.

Market index futures: Tonight, all three futures are lower  at 12:34 AM EDT with ES down 0.06 %.  On Friday ES gave us a far red spinning top that tested its lower BB and drove the indicators oversold.  The Sunday overnight is doing pretty much the same, with a second unsuccessful test of the BB so there seems to be an attempt at bottoming here.  Whether or not its successful remains to be seen as this sort of action requires confirmation, particularly given the general weakness of the paste two weeks.

ES daily pivot: Tonight the ES daily pivot falls again from 2102.25 to 2092.83. That still leaves ES below its new pivot so this indicator continues bearish.

Dollar index:  As might be expected, the dollar shot up nearly a percent on Friday to bust out of its descending RTC with a bullish setup, form a bullish stochastic crossover, and cause the indicators to bottom at oversold.  That all points to more upside Monday.

Euro:  And just reverse everything above for the euro which is now looking lower again for Monday.

Transportation:  And finally on Friday the trans gave us a bit of bullish divergence by rising a hefty 0.86% on a day the Dow and SPX were both down.  The resulting bullish engulfing candle keeps them in a rising RTC though the indicators have begun moving lower just before reaching overbought.  And with the trans sitting right on three day resistance now, it's not clear they have enough gas in the tank to move higher 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      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           2       1.000     94

     And the winner is...

Much like last Thursday night ES is once again sitting just below its daily pivot with a number of reversal signs present in the other charts.  That makes tonight another candidate for a conditional call.  If ES can break above its pivot by mid-morning Monday we'll close higher.  If not, we close lower.

Single Stock Trader

OK, I was wrong.  Just when I thought VZ couldn't go any lower ... it did, plunging another nearly 2% on Friday.  Holy moly!  RSI has now hit the big Z - that's zero, zilch, nil, nada, the square root of nothing.  The last time RSI was this low, well it isn't even on my chart.  It traded entirely below its lower BB.  If this doesn't dive any further Monday morning, I'm in.