The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Tuesday lower....
- ES pivot 2108.25. Holding below is bearish.
- Rest of week bias lower technically.
- Monthly outlook: bias higher.
- Single stock trader: VZ still not a swing trade buy.
Recap
Aargh! Sometimes you just can't win for losing. I figured Monday would go higher and it indeed popped nicely out of the gate - but then spent the rest of the day slowly sinking into the quicksand with the misery finally ending only because the bell rang at 4 PM. Foo. I wonder if the addition of Apple (NASDAQ:AAPL) to the Dow has anything to do with this. This is my worst month prediction-wise in well over a year now. Oh well, that was then, this is next. So we march on to Tuesday and I'll be happy to see the end of this month.
The technicals
The Dow: Well just when it looked like we were developing a rising RTC, the Dow had a losing day. It was only 42 points but that was enough to form a big bearish engulfing pattern and set up the stochastic for a bearish crossover. So much for my ascending triangle - duh! Right now, this chart just looks bearish.
The VIX: At least I got this much right when last night I said "the VIX is due for a move higher from here". On Monday, the VIX had its biggest real-body move in two weeks with a 6.75% pop. That was good for a bullish trigger on a descending RTC exit plus a bullish stochastic crossover. So this chart now looks flat out bullish.
Market index futures: Tonight, the futures are mixed at 12:12 AM EDT with ES down a scant 0.07%. Last night I mentioned the upper BB for ES at 2120 as a target and that's just where it peaked on Monday before retreating to form a fat red spinning top and snapping its winning streak at four. A bearish stochastic crossover is now complete, the candle is bearish engulfing, we've hit the upper BB®, the indicators have begun to move lower though still overbought, and the overnight is gapping lower. That all looks bearish to me for Tuesday.
ES daily pivot: Tonight the ES daily pivot falls a tad from 2109.83 to 2108.25. After falling below the old pivot around noon on Monday we remain below the new one so this indicator now turns bearish.
Dollar index: Last night I deferred calling Monday higher because the incipient morning star required confirmation. And this is why we do that - on Monday the dollar dropped another 0.16%. But it did it on a hammer that just touched the lower BB and left the indicators oversold. So now we're left with another reversal warning but one the again requires confirmation so again we're waiting for that.
Euro: After a second spinning top in a row, this one tighter than last Friday's, all the factors that made me think the euro would go lower Monday remain in place only now more so. Of course I was wrong about Monday, so maybe I'll be even more wrong Tuesday. But the euro has ceased its advance in the overnight so maybe this is the reversal.
Transportation: And just to show I do know something, last night I wrote "[a bunch of stuff] looks like a good sign for a move lower on Monday." and that's what the Trans did, down 0.86% to fall out of their rising RTC for a bearish setup with a completed bearish stochastic crossover with indicators still overbought.. This all just looks continued lower on Tuesday.
The charts have gone from looking bullish to bearish in the space of one day so now I'm going to change gears and call Tuesday lower. This month has been so dismal for me it's about time I get one right.
Single Stock Trader
Verizon Communications Inc (NYSE:VZ) continues to play coy. After a spinning top Friday it put in a tall inverted hammer on Monday. This too is a reversal warning. So when is VZ finally ever going to go lower? I don't know, but I do know this still isn't the time to get on the bus, Gus.