The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher only if ES passes its pivot, else lower..
- ES pivot 2028.67. Holding below is bearish.
- Rest of week bias uncertain technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader closed.
Recap
Sometimes being nervous is a good thing. I called Monday lower in the face of some bullish candles and it paid off with a 97 point decline in the Dow. This market continues to run on oil but we'll look at the rest of the charts just in case.
The Technicals
The Dow: On Monday the Dow produced a fat red spinning top that only briefly managed to trade above Friday's close. The indicators have begun moving lower before ever hitting overbought - a bearish sign. And the stochastic is squeezing its lines in preparation for a bearish crossover Net net, this chart now looks bearish.
The VIX: I didn't want to commit to this chart last night but the bullish piercing pattern prevailed and the VIX shot up 11.68% on Monday putting an end to its recent (and short) downtrend. The indicators have stopped moving lower and the stochastic is gearing up for a bullish crossover. Same story with VVIX so I'd say we have a good shot at more upside today.
Market index futures: Last night, all three futures were higher at 12:21 AM EST with ES up 0.15%. ES looks bearish on a daily basis after Monday's fall as the stochastic just made a bearish crossover. The other indicators are confused though with RSI and OBV rose but momentum and money flow fell. Go figure.
ES daily pivot: Last night the ES daily pivot fell again from 2042.83 to 2028.67. We remain about 3.5 points below the new pivot so this indicator remains bearish.
Dollar index: Sunday night I called the dollar lower but it still managed to eke out a 0.04% gain, though admittedly on a stubby red candle. The indicators remain crazy overbought and this candle peeled off the upper BB® and it's in evening star configuration so I'm going to hazard a guess that the dollar (gasp) goes lower on Tuesday.
Euro: Sunday night I thought the euro might go higher yesterday. Silly me. It was one and done for that as the euro just gave up all of Friday's gains, though on a lopsided doji. But indicators are still oversold and still rising so I'm taking a pass here today.
Transportation: Falling about the same as the Dow yesterday, everything I wrote about that applies here too. End of story.
We now have a down Friday followed by a down Monday and that's a bearish sign. And with no sign of any new support in oil, the overall gestalt was fairly bearish last night. Which made me wonder why the futures were all moving higher. And with ES so close to its pivot, that makes it a good time to try another conditional call. So we're going to claim that if ES can break above its pivot by mid-morning today (Tuesday), we'll close higher, otherwise lower.
Single Stock Trader
Sunday night I wrote that "I still see more upside potential than downside risk at 46.76." And indeed VZ was one of the few gainers in the Dow yesterday. That was enough to generate a bullish RTC setup. And indicators continue to rise so this stock remains a buy. We'll sell when a sell signal appears. Right now, 47.08 ain't it.