Actionable ideas for the busy trader delivered daily right up front
- Friday higher.
- ES pivot 2080.92. Holding above is bullish.
- Next week bias uncertain technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ still not a swing trade buy.
I was right to be cautious about Thursday's action after Wednesday's big gains. However I was wrong with my conditional call as the market closed lower despite the fact that ES remained above its pivot all day long. This is often a good play but this time it wasn't. In any case we now move on to finish off the not-so-spooky month of October and see if Friday is going to end with a trick or a treat.
The Dow: Last night I was dubious about how much upside the Dow might have left. As it turns out there was none left as the Dow ended the day with a 24 point loss on a classic red hanging man just below the top of Wednesday's big gains. In any case with indicators continuing to remain quite overbought this chart looks like there is more downside risk than upside potential for Friday.
The VIX: The VIX ended Thursday with a slight 1.95% gain that left it right in the middle of Wednesday's range, and going back a little further places it solidly in a two week long congestion zone. The indicators are a bit confused with RSI falling but the stochastic on the verge of a bearish crossover. So overall this chart is completely lacking in direction for Friday and there's no way I'm going to attempt to call that.
Market index futures: Tonight, all three futures are higher at 12:15 AM EDT with ES up 0.49%. On Thursday ES lost some ground putting in a classic green spinning top sitting just below the top of Wednesday's tall green candle. That was enough to drive the indicators to extreme overbought levels and provide something of a reversal warning for a move lower. However the new overnight seems to be moving higher in a non-trivial way so it's entirely possible that ES wants to close out the month on a positive note.
ES daily pivot: Tonight the ES daily pivot rises again from 2075.08 to 2080.92. That leaves ES above its new pivot so this indicator continues bullish.
Dollar index: Last night I didn't want to call the dollar lower but on Thursday that is exactly what happened and as it fell half a percent after having touched its upper BB on Wednesday. That has sent the indicators starting to fall off of extreme overbought levels so the general idea here is that there might be more downside to come on Friday.
Euro: Last night I was skeptical about the euro's chances of moving higher on Thursday but that's what it did anyway with a fat green spinning top to close right back up to 1.0981. With the indicators now oversold and the overnight pin action moving higher, it seems possible that the euro could close higher again on Friday.
Transportation: Last night I said that "I wouldn't be surprised to see the Trans move higher on Thursday". And indeed that is exactly what happened with the trans putting in an impressive 0.84% gain in a bit of bullish divergence on day that the rest of the market was lower. This tall green marubozu confirmed Wednesday's classic doji star. Also the indicators are not yet oversold. That certainly seems to suggest that there might be more upside left for the trans on Friday .
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 7 6 5 1 0.571 630
And the winner is...
Tonight the charts don't really look all that bullish (apart from the trans) but the last day of October is historically positive and the futures seem to be supporting that at the moment so I'm going to go out on a limb and call Friday higher. That's all she wrote. See you again Sunday night!
Single Stock Trader
Verizon simply continues to put in assortment of topping candles. On Thursday it was a red hanging man. That makes it five in a row now - a bearish tri-star followed by a doji star and then a hanging man. And yet Verizon simply refuses to go down. Nevertheless indicators remain overbought and one has to believe what goes up must come down sooner or later. In any case this is definitely not a swing trade buy. Or any other kind of buy.