Friday depends oin ES pivot

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

• Friday higher only if ES remains above its pivot, else lower.
• ES pivot 2085.92.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

Well that was just unfortunate. I thought for sure based on the technicals that Thursday would be going higher and in fact both the SPX and the Nasdaq did go higher. It's just that the Dow despite a late afternoon rally didn't quite manage to break even and therefore my call for Thursday being higher was wrong. Oh well - it was only by 13 points. I never like starting off a month being wrong so let's see if I can't redeem myself for Friday as we get October rolling.

The technicals

The Dow:  So after a nice game on Wednesday the aforementioned Dow on Thursday put in a long-legged doji star. This is a reversal warning however the indicators are all still busy rising from oversold but have not yet not yet reached overbought.. Therefore it is too early to call this one lower on Friday.

The VIX:  Last night I said the VIX still had lower to go on Thursday and that proved to be true is it fell another eight percent. That sent all of the indicators off of overbought and confirmed a bearish stochastic crossover. The long-legged inverted hammer is a bullish reversal warning but one which requires confirmation and at this stage it's still too early to do that so I can't call this one higher just yet on Friday.

Market index futures: Tonight, all three futures are mixed at 12:11 AM EDT with ES down 0.03% but NQ up 0.05%. On Thursday ES put in a nice green continuation candle following Wednesday's big gain that confirmed Tuesday's doji star. Indicators are all rising now off of oversold but still a long way from overbought and the stochastic is also continuing higher. In addition the overnight just keeps chugging along so they are really no bearish signs on this chart tonight.

ES daily pivot: Tonight the ES daily pivot rises from 1896.83 to 2085.92.  ES remains slightly above its new pivot so this indicator continues bullish, but just barely.

Dollar index:  Last night I took a wild guess that the dollar will move lower on Thursday and that paid off with a 0.16% decline on a small red hanging man that successfully tested its 200-day MA. Indicators continue to fall off of overbought but are still a long way from oversold. In addition, the stochastic continues to decline and therefore it looks like dollar still has lower to go on Friday.

Euro:  On the other hand I did miss the euro which Thursday did not continue falling but instead put it in a small gain to close at 1.1196 on a classic spinning top. However it still faces resistance at its 200-day MA currently at 1.1198, and all of the indicators are now falling along with a stochastic that has just completed a bearish crossover. Therefore I wouldn't put too much stock in the spinning top as it looks more likely that there is more downside coming on Friday.

Transportation:  And finally last night I said that the trans were looking more likely higher on Friday than lower and that proved to be true as they put in a nice 0.60% advance to make it three white soldiers on the charts. The indicators are still just barely oversold but continuing to rise along with a nicely completed bullish stochastic crossover. We do have some resistance coming up around 7858 but that means there's still at least a little bit more room to run for the trans 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      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  7      4       8           1       0.667   1404
October    0      1       0           0       0.000    -13

     And the winner is...

Tonight the charts remain generally bullish but with the failure of the Dow to advance on Thursday I'm a bit cautious.  So with the markets remaining skittish and ES now close to its new pivot this seems like a good time for a conditional call.  If ES remains above its new pivot by mid-morning Friday we'll close higher.  But if it sinks below it by then we'll close lower.  That's all she wrote.  That's enough!  See you again Sunday night!
Single Stock Trader

Once again last night I was reluctant to call Verizon a buy and it's a good thing too because on Thursday it just sold off some more to continue in a two week long descending RTC. It's been oversold the whole time but lately that means nothing as it continues to dribble down its lower BB. So we are still waiting for this stock to become a buy. Of particular concern is the fact that on Thursday it broke through its two month long support at 43.46. It's not looking good.

Thursday higher

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

• Thursday higher.
• ES pivot 1896.83.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

Despite the bearish reputation of the last day of September, this year the Dow managed a decent 1.47% gain. Nevertheless it finished both the month and the quarter in the red. So with the ugly month of September out of the way let's now move on to the scary month of October and see where Thursday may be headed.
The technicals

The Dow:  The Dow took a nice 236. top on Wednesday to make a tall green marubozu that lifted the indicators off of oversold and finally caused the stochastic to complete a bullish crossover. It also marked the second day trading outside the recent descending RTC and so that's a bullish trigger. The only concern on this chart is resistance around 16,315. But it does appear that the Dow still has some room to run on Thursday.

The VIX:  Last night I said it looks like the VIX had lower to go again on Wednesday. And that's just what happened with the VIX falling nearly another 9% on a gap-down doji star. But that still that leaves the indicators overbought and the stochastic on the verge of forming a bearish crossover. So while this is a bullish reversal indicator it is also one which requires confirmation and from the looks of it my guess is that we're not done going lower yet.

Market index futures: Tonight, all three futures are higher at 12: 15 AM EDT with ES up 0.76%. On Wednesday ES had its best day in almost a month as it confirmed Tuesday's doji star in a big way with a tall green marubozu that brought it all the way back up to 1908.75. That also finally exited the two week long declining RTC for a bullish setup. It also pulled away from the lower BB which is now falling away from us and sent the indicators rising off of oversold as well as confirming a bullish crossover from the stochastic. So everything is looking pretty bullish for this chart except for the fact that there's no follow-through in the overnight which is putting in a nontrivial decline. And that's a concern.

ES daily pivot: Tonight the ES daily pivot rises from 1875.08 to 1896.83.  ES remains well above its new pivot so this indicator continues bullish tonight.

Dollar index:  So much for the classic three black crows pattern. Last night I thought the dollar would move lower again on Wednesday especially after having pierced its 200-day MA. But no, instead it gained half a percent on a stubby spinning top perched above the top of Tuesday's big decline. That still leaves the indicators overbought and the stochastic in the middle of a bearish crossover so this could be a one and done. My guess is that the next move is lower but at this point who knows.

Euro:  On Wednesday the euro confirmed Tuesday's spinning top in a big way with a massive decline that plunged right back through its 200-day MA to close at 1.1179 on a tall red marubozu. That was enough to send the indicators moving lower before ever having reached overbought and the stochastic is now curving around for a bearish crossover before having reached overbought itself. The overnight seems to be looking for some support but it's not clear that it will find it so it looks to me like after such a big move through the 200 MA on Wednesday there's more room to run lower on Thursday.

Transportation:  And finally I was right about the trans moving higher though I was a little surprised that they gained 1.10% on Wednesday. That is the second day we've traded outside the descending RTC so that is a bullish trigger. Indicators remain oversold and the stochastic is still flat on the ground so it looks like the trans have more upside potential than downside risk at this point.

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  7      4       8           1       0.667   1404

     And the winner is...

The first day of most months is bullish and though that isn't always true of October, tonight we have a nice technical base to work off of and the futures are guiding sufficiently higher that all in all I'm going to go ahead and call Thursday higher.

Single Stock Trader
Last night I still wasn't ready to commit to Verizon despite the likelihood that the Dow was going to close higher on Wednesday. And that was a good thing too because Verizon ended up being one of only two Dow stocks that moved lower on Wednesday. That left us with two side by side red spinning tops and indicators that continue to hover at highly oversold levels. But until we see some confirmation of these reversal warnings it's still too early to call Verizon a swing buy.

Wednesday higher

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

• Wednesday higher.
• ES pivot 1875.08.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

It was another crazy roller coaster day on Wall Street and it finished with another mixed market with the Dow and the SPX closing higher but the Nasdaq finishing lower. The Dow was up then it was down then it was up then it was down before a late afternoon rally caused it finish with that 47 point advance that caused my call to be wrong but not be very much. So with another interesting candle in the books let's move on to close out the miserable month of September by figuring out which way Wednesday may wend.
The technicals

The Dow:  After the dust settled the Dow had put in a 0.30% advance on a long-legged green spinning top sitting right at the bottom of Monday's big dump. As the lower BB continues to fall away at least support of 16,000 was respected, and the indicators have now started rising from oversold levels. This is an encouraging reversal sign for Wednesday.

The VIX:  I was wrong about the VIX on Tuesday. I thought it would move higher but instead in a bit of bullish divergence it fell 2.9% on a day the Dow and the SPX closed higher but on a small green spinning top that sent the indicators a little further into overbought territory. However the candle is in a bullish harami position so I wouldn't make too much of that. At this point it's hard to tell which way the VIX goes on Wednesday.  But I tend to favor continued lower at this point.

Market index futures: Tonight, all three futures are higher at 12:53 AM EDT with ES up 0.77%. After Monday's big dump, on Tuesday ES put in a nice reversal warning in the form of a long-legged doji star sitting right on its lower BB as the indicators have now hit extreme oversold levels. We haven't quite retested the August lows yet but it looks like the overnight is wanting to confirm Tuesday's candle so we could be looking at a rally on Wednesday.

ES daily pivot: Tonight the ES daily pivot falls again from 1890.17 to 1875.08. That's finally enough to bring ES back above its new pivot so this indicator now turns bullish.

Dollar index:  Last night I wrote that it look like the dollar would move lower again on Tuesday and that's just what it did with another 0.20% loss that drove it right back down through its 200-day MA. That gives us a bearish three black crows pattern and has started the indicators all moving lower off of overbought. The stochastic now has a freshly completed bearish crossover so there's nothing bullish about this chart tonight and it looks like the dollar still has lower to go on Wednesday.

Euro:  Similarly, last night I called the euro higher for Tuesday and that's just where it went climbing right back up to 1.1272 on a green spinning top. That's a weak reversal sign but with the indicators still rising and not yet overbought it has to be taken with a grain of salt.

Transportation:  Last night despite some reversal signs I was cautious about calling the trans higher on Tuesday. They did manage a modest 0.32% gain but it was on a long-legged doji star. With indicators now extremely oversold it looks like the trans may be in a bottoming process. I still think we're due for a move higher and it might come as early as Wednesday but it's not certain.

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  6      4       8           1       0.636   1168

     And the winner is...

The last day of September is historically quite bearish but tonight the charts are generally suggesting that we've gotten overextended to the downside and a rally may be at hand.  So I'm going to just go ahead and call Wednesday higher as we close out the month and the quarter.

Single Stock Trader

Last night I was cautious about calling Verizon higher and that proved to be a good move because it fell further with a third spinning top in a row on Tuesday as it continues to dribble down its lower BB. Indicators remain oversold but have not yet begun to put in a convincing bottom. We are still in a descending RTC so once again this is not a swing trade buy.

Tuesday lower

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

• Tuesday lower.
• ES pivot 1890.17.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ no longer a swing trade buy.

Recap


Last night demonstrated the problems we have on Sunday nights calling Monday being as most of the information is fairly old by that point. The charts actually didn't look too bad but I hesitated calling Monday higher because the futures weren't participating. As it turns out it was good that I called Monday merely uncertain rather than higher because the Dow took an ugly 313. plunge and the SPX fared even worse. There are some interesting charts to look at tonight so let's get right to them and see where Tuesday may be headed.


The technicals

The Dow:  On Monday the Dow disconfirmed last Friday's bullish setup on a descending RTC exit with a nearly 2% dump that took it right down to its lower BB stopping just short of the 16,000 mark . But even that still leaves the indicators only moderately oversold and continuing to fall. The stochastic is now lying flat on the ground and thus has no predictive power. Perhaps more importantly, OBV continues a decline that began way back in the middle of July, currently running at -872 million. That's not a good sign. And with a red marubozu on the books there's no sign yet of a reversal on this chart.

The VIX:  Last night I thought the VIX was headed higher on Monday and that's just where it went with a big 17% gap up green candle that sent the indicators overbought. With the stochastic continuing to rise but still nowhere near in position for a bearish crossover, VVIX also continuing to rise, and the upper BB not too far away at 30 it looks to me like the VIX still has more room to run on Tuesday.

Market index futures: Tonight, all three futures are lower at 12:23 AM EDT with ES down 0.11%. ES had a simply miserable day on Monday with its worst performance in a month closing just off the day's lows and falling through its lower BB at 1888. It looks to me very much like ES is intent on retesting last month's lows around 1863. We could easily hit that level on Tuesday. In the meantime there's absolutely no sign of a reversal higher even though the indicators are all now extremely oversold.  The continued drift lower in the overnight isn't helping matters either.

ES daily pivot: Tonight the ES daily pivot falls once again from 1926.83 to 1890.17. And with ES unable to make any headway, it remains below its new pivot and this indicator simply continues bearish.

Dollar index:  Last night I said that the dollar looked lower for Monday and that was where it went down 0.26% on a second red candle in a row, this one just touching its 200-day MA before recovering a bit. Indicators remain overbought but the stochastic looks like it's trying to gear up for a bearish crossover. So it appears that there is more downside in store on Tuesday for the dollar.

Euro:  Meanwhile the euro continues to jiggle around in a range bounded by 1.1141 on the lower end and about 1.1254 on the upper end. It did put in another gain on Monday closing back up to 1.1244, a move that took it right up through its 200-day MA. This confirmation of Friday's lopsided spinning top and the 200 MA breakthrough makes it look like there's more upside possible for the euro on Tuesday.

Transportation:  Last night I mentioned that the trans looked positive for Monday based on a bullish looking candle last Friday. Well that of course went right out the window on Monday as the trans lost two and a quarter percent to almost touch their lower BB at 7637. That also took them right back into their descending RTC thus canceling last Friday's bullish setup. On Monday we closed right on recent support, but with the lower BB now starting to fall away there is some concern here and I definitely cannot call the trans higher for Tuesday based on this red marubozu..

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  6      3       8           1       0.700   1215

     And the winner is...

All the charts are looking pretty grim tonight but they're also getting pretty extended.  It's starting to make me think we're due for a reversal soon but technically I just don't see that happening on Tuesday.  So I'll just have to call Tuesday lower.  I'd be delighted to be proven wrong.

Single Stock Trader

On Monday Verizon was of course a loser just like almost the entire rest of the Dow and a gap-down red candle confirmed Friday's red spinning top to send Verizon right back into its descending RTC. So much for the bullish setup. Last night I said it would be good to get out of this trade and it looks like I was right. Having now taken out support at 43.81 and with no new reversal candles insight it is still too soon to call this stock higher despite the fact that all the indicators are now considerably oversold.

Monday uncertain

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

• Monday uncertain.
• ES pivot 1926.83.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ no longer a swing trade buy.

Recap

Well last Friday saw some more crazy action as we got a mixed market with the Dow rising but the S&P and the Nasdaq both falling. But my call is always for the Dow therefore I was correct. So now let's move on to the last week of the horrible month of September and the end of the quarter as we see what's in store for Monday.
The technicals

The Dow:  Last Thursday the Dow put in a tall hammer that successfully tested its lower BB. Then on Friday it confirmed that hammer with a 113 point gain but did it on an inverted hammer. Nevertheless the indicators are all now oversold and stochastic looks like it has curved around and just barely squeaked out a bullish crossover. Friday's candle also traded outside the descending RTC so that is a bullish setup. So all in all this chart now looks bullish for Monday.

The VIX:  Friday was also one of these unusual days when the VIX rose while the Dow rose also. It put in a tall green candle with the net result of just a 0.64% gain. Still it traded it entirely outside its descending RTC and that makes it a bullish trigger. Indicators continue to rise but they are not yet overbought, so technically this chart looks bullish for Monday.

Market index futures: Tonight, all three futures are lower at 12:13 AM EDT with ES down 0.09%.  After a tall red hammer last Thursday ES followed on with a tall green hammer for a net change of almost nothing.  Indicators are now quite oversold and the stochastic is in position for a bullish crossover any time now.  We're also riding right on the edge of the descending RTC and about to make a bullish setup there.  But the overnight action isn't quite there yet.  It's not clear ES can muster the strength to advance on Monday.

ES daily pivot: Tonight the ES daily pivot rises from 1917.42 to 1926.83. And that's enough to keep ES below its new pivot so this indicator remains bearish.

Dollar index:  On Friday the dollar confirmed Thursday's tall green hammer just above its 200-day MA by gapping up with a 0.3% gain that just touched its upper BB before falling back a bit and caused the indicators to head back towards overbought - though they're not there yet. The stochastic is now in position for a bearish crossover but we still don't quite have it yet. Nevertheless the overall impression here is that there's more downside risk than upside potential for Monday.

Euro:  And as for the euro, on Thursday it put in a tall lopsided spinning top that was confirmed on Friday with another tall lopsided spinning top, this one ending almost exactly where Thursday's began. The indicators are now back to oversold but the stochastic is meandering around with no definitive crossovers in sight at the moment. The overnight is rising a bit so the overall impression is that we are simply consolidating in the area of 1.1205. Which way this one goes on Monday is anyone's guess. I will also note in that we are now just below the 200 day MA and that seems to be serving as some resistance at the moment.

Transportation:  Friday was certainly the day for RTC exits as the trans also put in a bullish setup on a solid 0.89% gain. That move caused the indicators to bottom at oversold and just barely squeaked out a bullish stochastic crossover. So the overall technical impression here is quite positive 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      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  6      3       7           1       0.700   1215

     And the winner is...

After a mixed market last Friday, we've got some mixed charts tonight.  The trans and the Dow are looking higher, but the VIX is also looking higher and the futures are guiding lower.  So those opposing forces essentially cancel each other out and although Monday is historically bullish I'm not really seeing it right now.  Therefore I'll just have to wimp out once again and call Monday uncertain.

Single Stock Trader

Last Thursday night I called Verizon a swing trade buy for the adventurous. And that was indeed rewarded on Friday with a small gap-up hanging spinning top. It traded entirely outside the descending RTC for a bullish setup and the indicators now appear to have bottomed out at oversold, another bullish sign. However the spinning top is a reversal warning itself and the stochastic has now threaded out at oversold. Therefore the conservative thing to do would be to exit this trade on Monday.