The Hoot
Actionable ideas for the busy trader delivered daily right up front
- Tuesday uncertain.
- ES pivot 2044.67. Holding above is bullish
- Rest of week bias uncertain technically.
- Monthly outlook: bias lower.
- Single stock trader: VZ possible reversal..
Recap
Well that was interesting. All the major averages opened sharply lower on Monday, exactly in accordance with my theory of Mr. Market being scared stiff of the Greeks. But then he apparently thought better of that idea and by the close we were just barely in the green. Go figure. So with this interesting candle int he books, let's see how that factors in for Tuesday.
The Technicals:
The Dow: After a bearish marubozu on Friday the Dow put in a nice hammer on Monday that was just enough to remain in its latest rising RTC. It also kept the indicators rising and they've yet to hit overbought. So forget all the bearish warnings from Friday - this one now looks bullish again.
The VIX: Significantly, on a day the Dow was essentially flat, the VIX fell 6.84%, canceling a doji from last Friday. While we're now oversold there's no support until the 200 day MA at 14.38 so I'd say more downside is possible here.
Market index futures: Last night all three futures were modestly higher at 1:10 AM EST with ES up 0.04%. After a lower open Monday ES spent the rest of the day slogging higher and that was enough to keep it in its ascending RTC. But we're also fairly overbought now and the stochastics are on the brink of a bearish crossover. And ES has been unable to break resistance at 2057 for three days now so it's not clear to me there's enough gas in the tank for a move higher Tuesday.
ES daily pivot: Last night the ES daily pivot fell again from 2049.58 to 2044.67. We broke above the old pivot just before the close Monday and remained above the new one so this indicator now turns again bullish.
Dollar: The dollar followed a big advance last Thursday with another gap-up jump on Friday, so it's not too surprising to see a lower high on Monday but even that still constituted a 0.06% advance. There's just no stopping the mighty dollar lately.
Euro: Meanwhile, the euro continues to lose around one to two cents a day. If this keeps up, we'll hit parity even sooner than my August forecast. We're now back to September 2003 levels. We've come a long way from the days when rock stars started demanding to be paid in euros instead of dollars.
Transportation: The trans also outperformed the Dow on Monday, up 0.65% to retrace about 1/3 of Friday's losses. But we're still overbought and the stochastic's next move can only be bearish. We're also hanging on to the ragged right edge of the rising RTC so a bearish setup is possible at any moment. I'm not convinced this one can move higher.
I'm getting some mixed messages tonight. There really isn't enough clarity or consensus in the charts to make any call so I'll just have to call Tuesday uncertain.
Single Stock Trader
VZ put in a gap down hammer on Monday. This may indicate a turnaround but requires a confirmation. It's not the perfect buy signal.