Friday lower

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

• Friday lower.
• ES pivot 2098.58.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ no longer a swing trade buy.

Recap

I'll admit I was a bit surprised at the Dow's failure to push past its 200 day MA on Thursday.  And that's something of a concern.  So let's take a look at the charts to see how Friday's going to play out as we bring the month of July to a close.

The technicals

The Dow:  On Thursday the Dow sank right out the gate and spent the rest of the day clawing its way (almost) to break-even.  The resulting hanging man was latched to the 200 day MA like a stalactite.  The strength of the MA resistance took me by surprise and is a bad omen in combination with a reversal candle.

The VIX:  The VIX fell some more on Thursday making it three down in a row as it remains in a descending RTC.  It's now very near support at 11.84, though in the absence of a reversal candle or oversold indicators it's too soon to call a move higher just yet.

Market index futures: Tonight, all three futures are lower at 12:14 AM EDT with ES down  0.07%.  ES made it three up in a row on Thursday but with a classic hanging man.  However, we remain in a new rising RTC ad the indicators are still a fair way from overbought.  But we also have some resistance around 2105 and the overnight doesn't seem interested in taking that on.  So I can't really call this one higher again on Friday.

ES daily pivot: Tonight the ES daily pivot rises again from 2096.75 to 2098.58.  ES remains above its new pivot so this indicator continues bullish.

Dollar index:  I didn't call this chart last night and it's just as well because I sure didn't see a 0.64% gap-up spinning top coming.  That bounced it right out of its descending RTC for a bullish setup but also formed 2/3 of a bearish evening star.  But indicators continue to rise being just off oversold.  So with mixed messages this chart continues to be too tough for me to call.

Euro:  Last night I wrote that "it looks like the selling's not over yet".  And it wasn't with the euro now back down to 1.0924.  It was also a bearish trigger on a rising RTC exit.    And indicators have yet to hit oversold.  However, the euro seems to be staging a non-trivial late-night rally so I'm reluctant to call it lower on Friday.

Transportation:  The trans ran out of gas on Thursday after two big up days with a 0.02% loss and a small hanging man.  With indicators now nearly overbought and a ricochet off the upper BB this is a yellow light for a move lower on Friday.  Definitely not a buy 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      7      6       5           4       0.647    976 April      3      8       7           0       0.273      1 May        6      5       5           2       0.615    581 June       8      6       3           4       0.706    552
July       9      1       5           4       0.929   1156

     And the winner is...

While we don't have any overtly bearish signs on the charts tonight we do have a bunch of reversal warnings,though they require confirmation.  And we're also right at several S/R lines too.  In addition, the last day of July is historically quite weak, according to The Stock Traders Almanac.  And with two days of nice gains in hand, traders may want to book some profits to help out their July numbers and avoid being long over the weekend.  So I'm going to go out on a limb and not wait for the bearish confirmation  on the charts and instead just go ahead and nervously call Friday lower.  I'd love to be proven wrong as I'm always net long.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

On Thursday VZ did gain another 11 cents but on a classic gap-up doji star.  I'd put stops under any profits at this point and definitely wouldn't be getting on board from here.

Thursday depends on ES pivot

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

• Thursday higher only if ES remains above its pivot, else lower.
• ES pivot 2096.75.  Holding above is bullish.
• Friday  bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ now a swing trade buy.

Recap

I guess Mr. Market's listening bug in the Fed boardroom was working better than mine.  The market rose steadily on Wednesday and the registered just a little blip at 2 PM for the big announcement before ending near session highs.   Oh well - nothing ventured, nothing lost.

The technicals

The Dow:  On Wednesday the Dow confirmed a near bullish engulfing candle from Tuesday with a nice 0.69% gain.  That continued the move out of the descending RTC for a bullish trigger.  That's two day out of the channel.  And the only thing stopping it was the 200 day MA.  But with indicators still oversold, I think the Dow's got the oomph to push higher again on Thursday.

The VIX:  On Wednesday the VIX delivered the payoff on its recent evening star, off 7% to make two down days in a row.  But the indicators are only just off overbought and the stochastic has just completed a bearish crossover so there's certainly more downside available here.

Market index futures: Tonight, all three futures are lower at 12:25 AM EDT with ES down 0.17 %  ES made it two up in a row on Wednesday to pop out of its descending RTC for a bullish setup. That downtrend is now over.  Indicators continue to rise and a bullish stochastic crossover is in effect so that all looks good.  What looks less good is the lack of pin action in the overnight suggesting the possibility of a pause or some profit-taking on Thursday.

ES daily pivot: Tonight the ES daily pivot falls again from 2079.25 to 2096.75.  ES remains above its new pivot, though only just barely tonight, so this indicator now looks only weakly bullish.

Dollar index:  The dollar has gotten bound up, ending Wednesday about where it began Tuesday.  We're still in a descending RTC but also have a fresh bullish stochastic crossover.  So with the indicators all balled up, I can't touch this chart.

Euro:  Last night I wrote that "the daily trend seems more to suggest continued lower."  And that's just what happened with the euro back down to 1.1015.  And the overnight is gapping lower still so with a fresh bearish stochastic crossover and all the indicators falling, it looks like the selling's not over 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       8      6       3           4       0.706    552
July       9      1       5           2       0.917   1156


Transportation:  On Wednesday the trans followed through Tuesday's big gain with another 1.72% move to hit their upper BB.  But the indicators are nowhere near overbought and the stochastic has just completed a bullish crossover so I can't call a move lower on the BB hit.

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       8      6       3           4       0.706    552
July       9      1       6           2       0.917   1156

     And the winner is...

On Wednesday Dr. Copper finally exited a two-week descending RTC for a bullish setup, the best commodity news we've seen in a while.  All the other charts are looking good too tonight.  My only concern is the weakness in the futures and the proximity of ES to its new pivot.  Therefore I'm going to make another conditional call: if ES can stay above its pivot by mid-morning Thursday we'll close higher.  If it falls through, we close lower.

Single Stock Trader

Well it looks like the double hammer did the trick.  VZ finally snapped its seven day downtrend on Wednesday for a bullish setup on an RTC exit.  That also gave us a bullish stochastic crossover on indicators that are still oversold.  This is my preferred setup so I can now finally call this one a swing buy.

Wednesday uncertain

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

• Wednesday uncertain.
• ES pivot 2079.25.  Holding above is bullish.
• Rest of  week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ very near a swing trade buy.

Recap

Ah, Turnaround Tuesday to the rescue as the Dow finally snapped an ugly six session losing streak in style with a nice 190 point pop.  Thank the Fed, the Chinese, whoever, doesn't matter.  The bottom line is that the technicals worked.  Now we move on to Wednesday but we'll cut to the chase right here - this Wednesday is a Fed day and it is my policy to always call Fed days uncertain.

The technicals

The Dow:  The Dow's 190 point pop on Tuesday was enough to bounce it right out of its descending RTC for a bullish setup and finally give us a long-awaited bullish stochastic crossover.  And with indicators still oversold, this chart looks bullish.

The VIX:  On Tuesday the VIX nicely completed its bearish evening star with a big 13.85% plunge, completely giving up the 200 day MA on a tall red candle.  Indicators remain overbought and the stochastic is within inches of a bearish crossover so this chart looks lower to me Wednesday.

Market index futures: Tonight, all three futures are lower  at 12:10 AM EDT with ES down 0.12%.  On Tuesday ES did very well, retracing all of Monday's losses plus half of last Friday's.  That was also enough to solidly complete a bullish stochastic crossover   So I have to think this chart remains bullish, though the sag in the overnight suggests we could be in for a pause on Wednesday.

ES daily pivot: Tonight the ES daily pivot rises again from 2067.25 to 2079.25. Despite overnight weakness so far ES remains above its new pivot so this indicator continues bullish.

Dollar index:  On Tuesday the dollar continued its stair step decline by actually rising 0.27% but remaining in a two-week downtrend.  That may be about to end though because the indicators are now oversold and the stochastic has finally begun to curve around for a bullish crossover all while indicators are still oversold.

Euro:  Last night I wrote that "chances are good the euro goes lower on Tuesday".  And so they were with the euro falling back to 1.1049 on an almost-dark cloud cover red marubozu.  That was enough to curve around the stochastic which is now real close to a bearish crossover.  The overnight is trying to rally but the daily trend seems more to suggest continued lower.

Transportation:  The trans had a huge day Tuesday, erasing thee days of losses in one swell foop, sending the indicators off oversold and forming a new bullish stochastic crossover.  We're actually near resistance now but there's still some room to run and in any case there's no bearish signs on this chart right now.

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       8      6       3           4       0.706    552
July       9      1       5           2       0.917   1156

     And the winner is...

As a matter of policy, I am calling Wednesday uncertain.  Although someone on CNBC made the interesting point that on Fed days lacking a press conference (as this one is), the market is down 90% of the time.  And so far anyway, the futures action seem to be supporting that but it's really all just going to come down to whatever Auntie Janet has to say.

Single Stock Trader

Last night I was thinking VZ was near a swing buy and on Tuesday it did post a small six cent gain but on an odd red hammer.  Still, we remain quite oversold and right on the edge of the descending RTC, and two hammers are better than one so basically nothing's changed.  We're near a buy but I can't quite bless it just yet.

Tuesday higher

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

• Tuesday higher.
• ES pivot 2067.25.  Holding above is bullish.
• Rest of  week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ very near a swing trade buy.

Recap

Last night I wouldn't commit to continued lower because I thought the selling was about over.    I was wrong.  It was looking good for some sort of doji early on but then the selling just kicked back in as the Dow posted yet another triple digit loss.  It seems that China is now the new Greece.  Serves 'em right for sending us all that deadly drywall, toxic toothpaste, and poison pet food.

Is this sell-off ever going to end?  Let's check the charts to see.

The technicals

The Dow:  On Monday the Dow just picked up right back where it left off on Friday with more selling, this time very nearly down to its lower BB.  It was enough to drive RSI down to 1.97.  The last time we were lower than this was November 15th .. 2012.  And that very day set off a year and a half long rally.  This is simply ridiculously oversold.  Also the stochastic hit its lowest level of the year on Monday and is curving around nicely for a bullish crossover.

The VIX:  On Monday the VIX took a monster gap-up 13.54% pop to vault right over its 200 day MA but did it with a perfect doji thus giving us a classic evening star in the making.  Indicators are also now extremely overbought (RSI=92.87) so I'm laying better than even odds that the VIX goes lower Tuesday.

Market index futures: Tonight, all three futures are higher at 12:48 AM EDT with ES up 0.44%.  ES just kept falling on Monday and that drove the indicators extremely oversold (RSI=8).  The overnight rally so far is bending the stochastic around very close to a bullish crossover.  Right now this chart is looking bullish and ready to reverse.

ES daily pivot: Tonight the ES daily pivot falls again from 2083.75 to 2067.25.  And that, plus an overnight rally, was finally enough to put ES back above its pivot so this indicator now turns bullish for the first time in a while.

Dollar index:  The dollar continued its week-long slide on Monday with a gap-down 0.76% loss on a lop-sided spinning top.  Indicators are now oversold but the stochastic hasn't begun its curve around for a bullish crossover.  So there's a reversal warning here but one that requires confirmation.

Euro:  And similarly the euro on Monday continued its week-long rally closing this time at 1.1083.  Indicators are now overbought and the euro is giving up some of Monday's gains in the overnight.  That's causing the stochastic to bend around for a bearish crossover so I'd say chances are good the euro goes lower on Tuesday.

Transportation:  The trans also went lower on Monday but formed a nice doji star below Friday's action thus setting up a bullish morning star.  Indicators are now oversold and the stochastic is primed for a bullish crossover so a reversal looks like a good possibility 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      7      6       5           4       0.647    976 April      3      8       7           0       0.273      1 May        6      5       5           2       0.615    581 June       8      6       3           4       0.706    552
July       8      1       4           2       0.909    966

     And the winner is...

We're now seeing a number of decent reversal sign on the charts, finally.  And we've got some extremely oversold conditions with the Dow in particular at multi-year RSI lows.  Also, the SPX Hi-Lo indicator hit 8.47 on Monday, its lowest level of the year and below levels from which rallies usually start.  Finally, the futures are up non-trivially in the overnight.  All in all, I think there are enough factors in alignment to warrant calling Tuesday higher.

Single Stock Trader

VZ hit YTD support on Monday with a red spinning top as it remains in a steep descending RTC.  Indicators are now rather oversold and the stochastic is curving around nicely for a bullish crossover.  This one looks real close to a buy now.  All we need now is some confirmation on Tuesday.  Right now I'm fairly confident this one is going higher on Tuesday.

Monday uncertain

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

• Monday uncertain.
• ES pivot 2083.75.  Holding below is bearish.
• Rest of  week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy.

Recap

Huh - I'll admit I was nervous last week when I called Friday lower because I've seen it fairly often lately that the market will take a completely unexpected reversal from where you'd think it will be going  But that wasn't the case this time and the Dow dropped another 163 points on Friday.  That was an interesting move as we shall examine entering the final week of July.

The technicals

The Dow:  Breaking the 200 day MA as the Dow did last Thursday is never a good sign, and Friday was the proof with another triple digit loss.  That makes it four significant ones down in a row on a real steep (Pearson's=0.983) descending RTC.  We are in fact now within striking distance of the lower BB at 17,429 and while RSI is now quite oversold the stochastic has yet to curve around for a bullish crossover so I'm not calling the Dow higher yet.

The VIX:  Last Thursday I wrote that "this one looks higher again Friday.".  And that looked about right with another 8.7% gain, though on an inverted hammer.  But indicators are only half way to overbought so it's still too early to call this chart lower.

Market index futures: Tonight, all three futures are slightly higher at 1:53 AM EDT with ES up just 0.04%.  Last week's losses just accelerated on Friday with ES right back down to 2077.50.  But that was finally enough to send the indicators quite oversold though money flow and OBV are now in a consistent week-long downtrend and the stochastic has yet to being curving around for a bullish crossover.  Now it is true that ES is forming a small star in the overnight so far, but it's still early so I still can't call ES higher on Monday.

ES daily pivot: Tonight the ES daily pivot falls again from 2101.25 to 2083.75. That still leaves ES substantially below its new pivot so this indicator continues bearish.

Dollar index:  The dollar looked too confusing for me last Thursday.  And after Friday's candle I'm still confused.  A scant 0.12% gain on a tall red, almost marubozu candle.  And despite a gain the indicators continued lower.  So now I'm going to guess there's more downside in store on Monday.

Euro:  The euro looked similarly opaque last Thursday and it's just as well since it put in a perfect doji star on Friday, ending right where it began.  The new Sunday overnight is guiding lower though and nearing the right edge of the rising RTC .  And with indicators near overbought I'd say the next move is more likely lower than higher.

Transportation:  Last Thursday I wrote "there's nothing bullish about this chart".  And I'd say a 0.67% loss on Friday was definitely not bullish.  Indicators continue falling and no reversal sign in sight so I can't call the trans higher 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       8      6       3           4       0.706    552
July       8      1       4           2       0.909    966

     And the winner is...

We wrung a lot of froth out of the market last week and that drove the SPX Hi-Lo indicator very low, near levels from which reversals come.  The same is true of the charts - we're close to but not quite at reversal points.  In fact it's looking to me like Monday might be a doji day with a hammer or perhaps a star.  At this point I'm hesitant to call it lower again just because it looks like the selling could be about exhausted so I will content myself with calling Monday uncertain.

Single Stock Trader

It's good I stayed away from VZ last Friday because it got caught up in the general market malaise right back down to its lower BB on a red marubozu.  We're now nearing a turning point but not quite there  so no buy just yet.