The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Thursday higher.
- ES pivot 2021.50. Holding above is bullish
- Friday bias uncertain technically.
- Monthly outlook: bias lower.
- Single stock trader: waiting on new VZ entry.
Recap
The market just continued treading water on Wednesday as everyone awaits the big announcement from the ECB today. Right now the only question is whether or not it's already been baked in. Personally I don't think that's entirely the case. But perhaps the charts will shed some light on this subject as we continue on to the end of the week.
The Technicals:
The Dow: Just more uncertainty from the Dow on Wednesday, this time in the form of a lopsided spinning top that after another triple digit excursion resulted in just a 39 point advance. Technically though this chart remains bullish, probably reflecting the market's expectation of QE from the ECB.
The VIX: Tuesday night I wrote "I don't think we're done going lower". Good thinking too because after a doji day the VIX just kept right on descending, down another 5.23% yesterday on a giant bearish engulfing candle. That's still nowhere near enough to drive the indicators oversold and the stochastic is still in full-on bearish crossover mode so there are still no bullish signs on this chart.
Market index futures: Last night, all three futures were higher at 12:22 AM EST with ES up 0.20%. Tuesday night I wrote "(a bunch of things) all point to continued higher on Wednesday." And sure enough, ES had a decent day yesterday, continuing out of its descending RTC for a bullish trigger. Indicators are now off oversold but continue rising and there was some more positive pin action last night, so it looks like the traders are expecting good news from the ECB today, Thursday.
ES daily pivot: Last night the ES daily pivot rose again from 2013.58 to 2021.50. Once again we remain above the new pivot so this indicator remains bullish.
Dollar: The dollar had a rare down day on Wednesday but even so managed a green hanging man. What it does today will depend in large measure on the ECB, so no call here.
Euro: Amazingly, the euro actually closed higher on Wednesday, its first green candle in seven sessions. But two inverted hammers does not make a rally, so we'll just have to wait and see what the ECB says today. That's sure to move the euro.
Transportation: Tuesday night I wrote "it looks like the rally isn't over yet.". And indeed it wasn't as the trans packed on another 0.45% on Wednesday with three white soldiers and a bullish trigger on the descending RTC exit. Indicators still not yet overbought though so I'm going to guess there's still room to run here today.
Obviously the big news today is the ECB's QE announcement. Right now the technicals are looking like the market is gearing up to move higher so I'm just going to assume that someone knows something I don't (not hard to do) and call Thursday higher.
Single Stock Trader
VZ remains in a rising RTC and it looks like my calls for a short term top Tuesday night were premature. With non-confirmation of Tuesday's doji, it just looks like it will continue higher.