The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Tuesday higher....
- ES pivot 2104.92. Holding above is bullish.
- Rest of week bias lower technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ remains a swing trade buy.
Recap
Sunday night I called Monday as uncertain, adding "My personal bias is that I'm not looking to go long the next few days.". Well with a meager 24 point move in the Dow, "uncertain" seems about right, and with the move to the downside, not going long seems about right too. So let's see if we can get any action going here on Tuesday. Chart 'em up, Jack!
The Technicals
The Dow: We got a good reversal warning in the form of a red hanging man from the Dow on Monday. It also closed just outside its rising RTC for a bearish setup and remains overbought. That all makes this chart look lower for Tuesday.
The VIX: Sunday night I said the VIX looked lower and while the candle on Monday was indeed red, we ended with a 1.82% gain to close just under the 200 day MA after an attempt to break above. The result is a bearish harami but the indicators all remain quite oversold. With four red candles in a row though and remaining below the 200 MA I'm going to guess there's more downside available here.
Market index futures: Last night all three futures were barely higher at 12:57 AM EST with ES up just two ticks. ES put in a narrow doji star on Monday right at the top of Friday's pop. Indicators remain quite overbought so this is a good reversal warning - but one which requires confirmation.
ES daily pivot: Last night the ES daily pivot rose again from 2099.33 to 2104.92. We remain above the new pivot so this indicator continues bullish.
Dollar: The dollar gained 0.34% on Monday but on a red hanging man near the top of Friday's candle. The indicators remain confused but there's at least a suggestion of a move lower here on Tuesday.
Euro: And the euro continued its long string of dojis with a lopsided spinning top. This all indicates indecision except for the fact that each doji is lower than the one before. It's a tiny little beginners slope descent but the trend is nevertheless still lower.
Transportation: On Monday the trans eked out a 0.14% gain with a green spinning top above Friday's big push. But with indicators now at extreme overbought levels, a bearish RTC exit, and the stochastic actually on the decline for four days, I'd say this one looks lower on Tuesday.
Despite some highly overbought conditions and my expectation of a top soon, I'm starting to feel like a tape fighter here and that's never a good thing. So with the VIX moving back under its 200 day MA and ES seeming to show no signs of wanting to move lower, I'm going to go out on a limb and just call Tuesday higher.
Single Stock Trader
Verizon Communications (NYSE:VZ) lost a bit of ground on Monday, but the overall bullish thesis remains intact with two hammers in a row, extremely oversold indicators and a stochastic about to form a bullish crossover.