Friday uncertain

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

• Friday uncertain.
• ES pivot 1987.00.  Holding below is bearish.
• Next week bias lower technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy.

Recap

Well that was certainly interesting. The market went essentially nowhere as expected until 2 PM and then as soon as the Fed announcement came out all hell broke loose as Mr. Market went right off his meds again. First the market was up then it was down then was way up ad then finally it spent the rest of the afternoon sinking until the Dow finished with a modest 65 point loss.  I'll have to seriously consider taking up day trading if this kind of thing continues.  In the meantime we got an interesting candle so let's take a look at the implications for Friday.
The technicals

The Dow:  In the end, after all the months of endless speculation and hoopla surrounding the question of whether the Fed would raise rates in September or not the end result was pretty anti-climactic. I will point out that the Night Owl was one of the people who predicted there would be no rate increase in September. What we did get on Thursday was a small 0.39% loss in the Dow with a tall inverted hammer that caused the indicators to peak just above overbought and begin moving lower. The stochastic is also now well positioned for a bearish crossover. While we remain in a rising RTC the stage seems to be set for a move lower on Friday.

The VIX:  With all the crazy action on Thursday you would think the VIX would have spiked higher. Instead it actually fell 1%. But it did it on a tall spindly spinning top that seems to have caused the indicators to bottom at oversold. With the stochastic threaded out at a low level it is useless for prediction though. However we now at least have a reversal warning so it's not out of the question that the VIX might move higher on Friday.

Market index futures: Tonight, all three futures are higher at 12:39 AM EDT with ES up 0.16%. Like the Dow, on Thursday ES put in a an inverted hammer with a giant upper shadow. The real body of this candle is a bearish harami and the indicators are back to overbought. We also have a new bearish stochastic crossover and the overnight is gapping lower making it look like there is more downside in store on Friday.

ES daily pivot: Tonight the ES daily pivot rises from 1979.92 to 1987.00. That's enough to put ES back below its pivot so this indicator now turns bearish.

Dollar index:  After a failed attempt at reclaiming its 200 day MA on Wednesday , on Thursday the dollar simply gave up the ghost and gapped down with a huge 0.91% loss that really got going as soon as the Fed announcement came out. There is nothing bullish about this chart tonight and with the lower BB now not too far away it looks like there's more downside in store on Friday.

Euro:  And of course similarly on Thursday the euro put in a tall green candle to break resistance convincingly at 1.1359 before closing at 1.1413 - its best close since August 25th. With a confirmation of Wednesday's spinning top and support from the 200 day MA there's nothing really bearish about this chart tonight other than the fact that the euro might have run a little too far too fast. The overnight is running slightly higher but at the moment is forming a spinning top of its own and so it's not clear whether the euro has enough gas in the tank to continue higher on Friday.

Transportation:  When the smoke cleared Thursday the trans put in a tall inverted hammer just like the Dow. However unlike the Dow they actually managed to gain 0.39% as opposed to fall 0.39%. That keeps them in a rising RTC and even though the indicators remain quite overbought this is only a tentative reversal sign and one which requires confirmation.

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      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  5      2       5           0       0.714   1228

     And the winner is...

There's a small rally attempt going on in ES right now as I write but the overall look of the charts tonight is bearish.  It looks like our ascending triangle breakout is fizzling.  Unfortunately, our reversal signs, like the VIX require confirmation.  And to top it all off, Friday is a triple-witching.  So I regretfully have to call Friday uncertain.  Perhaps with this crazy week finally behind us we can get back to calling the close next week.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

When all the shouting was over Verizon was not one of the winners on the Dow, suffering a gap-down 2% loss on Thursday that sent the indicators continuing lower off overbought and also formed a bearish stochastic crossover. The candle is a wide-ranging spinning top but with the indicators still nowhere near oversold it still isn't a swing trade buy.

Thursday uncertain

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

• Thursday uncertain.
• ES pivot 1959.42.  Holding above is bullish.
• Friday bias lower technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy.

Recap

Well we're coming down to the wire here.  On Wednesday the markets put in another non-trivial gain as everybody looks forward to Thursday's big big big announcement from the Fed. It seems that Mr Market is pricing in a zero interest rate rise. Whether that's true or not remains to be seen so we go ahead with the chart run-down as usual for whatever it may be worth.

The technicals

The Dow:   The Dow gained another significant 140 points to confirm Tuesday's ascending triangle breakout. That sent the indicators all overbought but the stochastic has yet to begin a bearish crossover. Of course none of this means a whole lot since everybody is now waiting for the Fed decision on Thursday.

The VIX:  Last night I said it looked like the VIX was likely going lower again on Wednesday but we might get some sort of a reversal hammer. Well nice try but instead the VIX just kept right on going lower with a 5.28% loss on a tall red marubozu. That took the indicators back to oversold and sent them all running lower with no sign of a bullish stochastic crossover as we remain in a two week long descending RTC. So there are no real bullish signs on this chart tonight at all.

Market index futures: Tonight, all three futures are lower at 12:12 AM EDT with ES down 0.15%. ES made it two in a row on Wednesday with another decent advance that broke through resistance at 1980. The indicators continue to rise and are now just overbought.. There's nothing really bearish about the technicals here tonight aside from the fact that the overnight seems to be sagging a bit. I don't know if this reflects profit taking or uncertainty about Thursday's Fed decision. But it does call into question whether ES has enough gas in the tank to move higher on Thursday.

ES daily pivot: Tonight the ES daily pivot rises again from 1959.42 to 2085.92. That still leaves ES above its new pivot so this indicator continues bullish.

Dollar index:  Will the dollar definitely fooled me on Wednesday. I thought after Tuesday's big advance it still had enough gas left to break through its 200-day MA on Wednesday but it was not to be. After a brief attempt to break through it fell back and never challenged again, ending with a 0.25% loss. The resulting candle is a bearish harami though the indicators remain all oversold. The stochastic is threaded out and so overall this chart looks negative Thursday.

Euro:  Last night I thought the euro looked like it was going lower on Wednesday. And indeed it opened lower but then spent the rest of the day recovering to close at 1.1294. The result was a tall hammer that successfully tested the 200 day MA. That still leaves the indicators overbought however the stochastic has a completed bearish crossover. On the other hand the new overnight is moving higher again gapping up significantly. And to complicate matters Wednesday's trade was outside the rising RTC for a bearish set up. The net result is that this chart has no direction at all and so I'm not calling it for Thursday.

Transportation:  Last night I noted that the trans had no bearish signs in sight and it proved to be true as on Thursday they gained another 0.24%. But with indicators now pretty overbought and the stochastic threaded out at a high level and a short stubby spinning top sitting at the top of Tuesday's giant green candle, it's not clear that the trans have any more gas left in the tank for a further advance on Thursday. But with the Fed announcement coming out that's all moot anyway.

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      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  5      2       4           0       0.714   1228

     And the winner is...

I normally call Fed days as "uncertain" as a matter of course.  But Thursday's announcement is as uncertain as they get.  The talking heads are all over the place on this one.  Will the Fed raise or pass?  Will it be 0.25% or "12 1/2 basis points"?  Will it be now or December?  Or next year?  Who knows.  Personally, I'm just sitting tight and waiting.  We'll see.  In the meantime, I can't think of a better occasion to call Thursday uncertain.

Single Stock Trader

It was good to be cautious about Verizon last night because on Wednesday it came in dead last being the only loser in the entire Dow. The resulting dark cloud cover coupled with overbought indicators and a stochastic about to form a bearish crossover all makes this look more like a short for Thursday then any sort of a buy.

Wednesday uncertain

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

• Wednesday uncertain....
• ES pivot 1959.42.  Holding above is bullish.
• Rest of week bias lower technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy.

Recap

The market ended up doing quite nicely on Tuesday moving higher in pretty much a straight line all day long before giving back trust a tad into the close for a 229 point gain in the Dow.  That finally gives us some interesting charts to chew on so let's get to them as this momentous week rolls on. Op-ex and interest rates and triple witching, oh my!


The technicals

The Dow:  Last night I mentioned the possibility of a rising triangle here and with a 1.4% gain it sure looks like we got a breakout on Tuesday.  But does a one day pop constitute a new trend, particularly in such a tricky week?  I don't think so.  This one could just as easily fall back on Wednesday.

The VIX:  Here's a good example - last night it appeared the VIX might move higher but instead it just continued lower, down another 7% on Tuesday.  Indicators are still not yet oversold but we're now near support around 22.40.  There's no immediate reversal in sight but we could possibly get a hammer on Wednesday.

Market index futures: Tonight, all three futures are lower at 2:01 AM EDT with ES down 0.14%.  ES had a very good day Tuesday breaking out of recent resistance at 1958.  But the indicators have just gone overbought and the overnight seems to be faltering.  That suggests the possibility of a nervous mean-reversion on Wednesday.

ES daily pivot: Tonight the ES daily pivot rises from 1948.25 to 1959.42.  ES is back above its new pivot so this indicator is now bullish again.

Dollar index:  Last night I didn't want to commit to a dollar gain on Tuesday and that's a shame because it had a nice 0.39% green marubozu for a bullish engulfing pattern that was stopped only by its 200 day MA.  Indicators are now oversold and the stochastic just squeaked out a bullish crossover so this one looks higher on Wednesday.

Euro:  At least I caught Tuesday's move lower in the euro as it slid back down to 1.1290 just touching its 200 day MA before bouncing off it a bit.  The indicators are now overbought and the stochastic has completed a bearish crossover.  Tuesday's trade was also outside the rising RTC for a bearish setup.  The overnight though seems to be attempting a rally but everything else suggests lower on Wednesday.

Transportation:  On Tuesday the trans continued their latest uptrend with a big 1.85% gain.  Indicators are back to overbought but this tall green marubozu is hardly a bearish sign

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      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  5      2       3           0       0.714   1228

     And the winner is...

Ordinarily I'd say a good day like Tuesday with a rising triangle exit would call for continued higher, but with all the booby traps in place this week, it's possible the traders may simply take profits on Wednesday as they await the Fed.  And the overnight futures seem to be supporting that, so far at least.  So I'll just have to call Wednesday uncertain again.  Oh, and since everyone else in the universe has weighed in on this, I'll add my own prognostication - the Fed won't raise rates until December.

Single Stock Trader

VZ was swept up in the3 general Dow euphoria on Tuesday and broke out above recent resistance but that just makes it look even less like my preferred buy pattern so I'll just watch this one some more.

Tuesday uncertain

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

• Tuesday uncertain....
• ES pivot 1958.25.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ a swing trade buy.

Recap

I took a chance last night by calling the market higher on Monday and despite an early spike higher was finally proven wrong as the Dow finished losing 62 points. The markets continue their nervous progression towards Fed day so we look to the charts for some indication of Tuesday as this important op-ex week rolls on.
The technicals

The Dow: 

On Monday the Dow put in a small dark cloud cover to end a short winning streak at two. The area around 16,475 is proving to be just too tough for it right now. And yet it continues to put in higher lows day after day. The indicators also continue to be mixed as is the overall picture so it's difficult to tell what to make of this particular pattern tonight.

I mentioned something the other night about what looks like a symmetrical triangle in ES. But looking at the chart of the Dow it's looking more like an ascending triangle and if that's the case one would expect a break when it comes to be higher. The pattern is nearly complete and oddly enough should be finished right around the time of the set announcement this week.

The VIX:  After two days of declines, on Monday the VIX gained 4.5% but did it on a small spinning top in harami position. That was enough to send the indicators starting to move slightly higher from oversold . however the overall trend of the ex continues to remain lower.

Market index futures: Tonight, all three futures are higher at 12:57 AM EDT with ES up 0.10%. This will be our last night looking at the U contract of ES. On Monday ES put in a fat spinning top sitting in dark cloud cover position The indicators remain confused with RSI falling but momentum rising. And the new overnight seems to be trying to stage something of a small rally. So overall this chart is somewhat less than totally clear.
ES daily pivot: Tonight the ES daily pivot falls  from 1953.33 to 1958.25. That's enough to put ES back below its new pivot so this indicator now turns bearish.

Dollar index:  Last night I wasn't ready to call the dollar higher on Monday but it put in a tiny 0.03% advance anyway with a small red spinning top sitting right at the bottom of Friday's big decline. Indicators continue falling though but have not yet reached oversold. So there's only a weak reversal warning here and once again I can't call the Dollar higher just yet.

Euro:  Monday's chart of the euro is a bit more clear. It gave us a nice red spinning top sitting right at the top of Friday's big punch through its 200-day MA to close at 1.3333. That left the indicators highly overbought and the stochastic just in position for a bearish crossover. The new overnight is putting in a small spinning top at the bottom of Mondays candle so this one looks like it has a fair chance of moving lower on Tuesday.

Transportation:  The trans continue to be unable to break resistance around 8060 and on Monday lost 0.45% on a red bearish engulfing pattern. The indicators have now begun falling after just reaching overbought. However the trans remain in a rising RTC. Still the current pattern suggests lower to come.

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      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  5      2       2           0       0.714   1228

     And the winner is...

The nervous congestion in the markets continued on Monday as everybody awaits the big decision from the Fed later this week. Therefore I don't think there's much point in my trying to call the market one way or the other, so I will have to content myself with simply calling Tuesday uncertain.
Single Stock Trader

 Verizon continues to confound. After Friday's bullish confirmation of last Thursday's spinning top, on Monday it instead lost $0.07 on a dark cloud cover. None of which means much of anything since it is subject to the same confusion the rest of the market and will give us no clarity until after the Fed decision. In the meantime it is still not a swing trade buy.

Monday higher

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

• Monday higher.
• ES pivot 1953.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

On Friday morning the market had me wondering where I'd gone wrong with my call for a higher close after opening with a nearly triple-digit loss.  But while I was contemplating that, the Dow reversed course and finally zig-zagged its way higher to finish with a decent 103 point gain.  We now enter possibly the most important week of the year for it features not only op-ex but also the crucial and long awaited Fed decision on whether or not to raise interest rates.  It should be an interesting ride to say the least so lets figure out which way it will begin on Monday.
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The technicals

The Dow:  After a spinning top reversal on Thursday and what looked like a little bullish stochastic crossover I was pretty sure Friday was going to go higher and in the end it did with a 0.63% gain. But the candle was a hanging man and the stochastic went from a bullish crossover right back to a bearish crossover. The indicators are also confused now with RSI rising but momentum falling. We seem to be in a congestion zone vaguely between 16,140 and 16,536. This probably reflects ongoing uncertainty regarding the upcoming Fed decision and I don't think this is going to change much between now and Wednesday.

The VIX:  Last Thursday night I said it looked like there was more downside in store for the VIX on Friday and that's just what happened with another 4.8% decline giving us two black crows on the charts and indicators that have now just gone oversold. The stochastic remains threaded out on the floor and is of no use to us at the moment. But the overall gestalt since last month's giant spike continues a general downward trend. And without a bullish reversal candle in sight there could be at least one more day of selling here.

Market index futures: Tonight, all three futures are higher at 1:22 AM EDT with ES up 0.24 %, Last Thursday night I pointed out what look like a developing symmetrical triangle in ES. And on Friday a small hanging man type candle continued to convert confirm that with a gain that stopped exactly on the upper bounding line of this triangle. The pattern is essentially complete tonight but here's something interesting. We're seeing a gap-up overnight that is moving ES to the upside out of this triangle. That's highly unusual as most of the time these things exit in the same direction from which they were entered and in this case that would mean lower.  But it's still early - this may be just another fake-out.

ES daily pivot: Tonight the ES daily pivot rises from 1948.42 to 1953.33. A weekend rally still leaves ES above its new pivot so this indicator continues bullish.

Dollar index:  Last Thursday night I said that the dollar looked distinctly bearish after punching through its 200-day MA. Then on Friday it indeed lost another 0.26% leaving us with three black crows. The indicators continue falling but have not yet hit oversold, therefore it is still too early to call this chart higher on Monday.

Euro:  And in typical mirror-image fashion, on Friday the euro continued higher disconfirming Thursday's green spinning top but with a hanging man. I was right not to commit to a reversal on Friday.  This move also exited our latest descending RTC for a bullish setup. The indicators are all rising now but have not yet hit overbought and there's some bullish pin action in the overnight which makes it look quite possible that we will see further upside on Monday.

Transportation:  Last Thursday night I said the trans looked higher again for Friday and that proved to be true with another 0.26% advance. But that happened on a hanging man and with the indicators now all overbought and the stochastic just about in position for a bearish crossover we have a reversal warning. But it's one which requires confirmation and therefore I cannot call the trans lower 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       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314 September  5      1       2           0       0.833   1290

     And the winner is...

This is sure to be a tricky week on the Street.  I will obviously be calling Wednesday as uncertain ahead of the Fed.  That leaves Monday and Tuesday.  I think we're just going to get more congestion until the air is cleared.  In the meantime, technically, things look mildly bullish tonight so I'm just going to have to go with that and reluctantly call Monday higher.  I'm not looking for a big pop though.

Single Stock Trader

Verizon finished Friday middle of the pack in the Dow with a $0.27 gain that nonetheless confirmed Thursday's lopsided spinning top. But like the Dow itself the indicators are now quite confused running randomly between oversold and overbought. Technically it looks higher for Monday but this is not a swing trade buy for me.