Thursday Depends On ES Pivot
The Night Owl Trader | Jul 30, 2015 02:13AM ET
Actionable ideas for the busy trader delivered daily right up front
- Thursday higher only if ES remains above its pivot, else lower.
- ES pivot 2096.75. Holding above is bullish.
- Friday bias uncertain technically.
- Monthly outlook: bias lower.
- Single stock trader: VZ now a swing trade buy.
Recap
I guess Mr. Market's listening bug in the Fed boardroom was working better than mine. The market rose steadily on Wednesday and registered just a little blip at 2 PM for the big announcement before ending near session highs. Oh well - nothing ventured, nothing lost.
The technicals
The Dow: On Wednesday the Dow confirmed a near bullish engulfing candle from Tuesday with a nice 0.69% gain. That continued the move out of the descending RTC for a bullish trigger. That's two day out of the channel. And the only thing stopping it was the 200 day MA. But with indicators still oversold, I think the Dow's got the oomph to push higher again on Thursday.
The VIX: On Wednesday the VIX delivered the payoff on its recent evening star, off 7% to make two down days in a row. But the indicators are only just off overbought and the stochastic has just completed a bearish crossover so there's certainly more downside available here.
Market index futures: Tonight, all three futures are lower at 12:25 AM EDT with ES down 0.17 % ES made it two up in a row on Wednesday to pop out of its descending RTC for a bullish setup. That downtrend is now over. Indicators continue to rise and a bullish stochastic crossover is in effect so that all looks good. What looks less good is the lack of pin action in the overnight suggesting the possibility of a pause or some profit-taking on Thursday.
ES daily pivot: Tonight the ES daily pivot falls again from 2079.25 to 2096.75. ES remains above its new pivot, though only just barely tonight, so this indicator now looks only weakly bullish.
Dollar index: The dollar has gotten bound up, ending Wednesday about where it began Tuesday. We're still in a descending RTC but also have a fresh bullish stochastic crossover. So with the indicators all balled up, I can't touch this chart.
Euro: Last night I wrote that "the daily trend seems more to suggest continued lower." And that's just what happened with the euro back down to 1.1015. And the overnight is gapping lower still so with a fresh bearish stochastic crossover and all the indicators falling, it looks like the selling's not over yet.
Transportation: On Wednesday the Trans followed through Tuesday's big gain with another 1.72% move to hit their upper BB. But the indicators are nowhere near overbought and the stochastic has just completed a bullish crossover so I can't call a move lower on the BB hit.
Get The News You Want
On Wednesday Dr. Copper finally exited a two-week descending RTC for a bullish setup, the best commodity news we've seen in a while. All the other charts are looking good too tonight. My only concern is the weakness in the futures and the proximity of ES to its new pivot. Therefore I'm going to make another conditional call: if ES can stay above its pivot by mid-morning Thursday we'll close higher. If it falls through, we close lower.
Single Stock Trader
Well it looks like the double hammer did the trick. Verizon (NYSE:VZ) finally snapped its seven day downtrend on Wednesday for a bullish setup on an RTC exit. That also gave us a bullish stochastic crossover on indicators that are still oversold. This is my preferred setup so I can now finally call this one a swing buy.
/h2
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