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VZ | With Decent Follow Through In Overnight Futures Call Wednesday Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Wednesday higher
ES pivot 1950 08 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ still not a swing trade buy
Recap
Despite what looked like a bearish technical pattern last night the futures prevailed and Mr Market had a great day on Tuesday possibly due to some good news out of China Who knows I don t even pay any attention to any of that anymore My position is that you can t believe anything they say good or bad So on we go to Wednesday to see where the charts may lead us next as this holiday shortened week progresses
The technicals
The Dow On Tuesday the Dow confirmed historical precedents by rocketing higher right out of the gate and then continuing on to close on the highs of the day with a handy 2 42 advance Looking at the daily chart one can imagine a double bottom now in place over the last week Interestingly Tuesday s action has also caused the stochastic to curve back around just about into position for a bullish crossover from a high level And as I always say those are often good for a day or two of higher prices following With the Dow now looking like it has broken out of its recent week long congestion area I d say this chart looks good to move higher again on Wednesday
The VIX Last night I wrote that the VIX looks like it was ready to move higher again on Tuesday That was of course completely wrong as the VIX instead confirmed Monday s tall spinning top and then gapped right back down again to close more than 10 and below its levels of last Friday But it did it on yet another doji star That makes three in a row This would be a classical bearish tri star pattern except for the fact that that is entered from below whereas this one is entered on a descending trend from above
That just leaves us with indicators that are totally confused with RSI rising but momentum falling and the stochastic continues to be threaded out at a low level Tuesday s doji would suggest there is a possibility of the VIX moving higher on Wednesday and with the indicators still closer to oversold than overbought that still might happen
Market index futures Tonight all three futures are higher at 1 00 AM EDT with ES up 0 67 ES had a fantastic day on Tuesday putting in a tall green marubozu that handily cleared three days resistance to close at 1966 The indicators are still not yet overbought and the stochastic in fact has generated a bullish crossover from a high level just like the Dow did This all makes me think that despite Tuesday s big gains ES might still have enough gas left in the tank to continue higher on Wednesday The fact that the overnight continues moving higher tends to support that view
ES daily pivot Tonight the ES daily pivot rises again from 1926 25 to 1950 08 That still leaves ES above its new pivot so this indicator continues bullish
Dollar index Last night the dollar was looking too tricky for me to call On Tuesday turns out it lost 0 26 to fall right back to where it opened last Friday However we now have three consecutive days of the dollar putting in lower highs and that was enough to send the indicators moving lower off of overbought peaks We also now have a stochastic that has completed a bearish crossover so I would say Tuesday s candle points to continue lower on Wednesday
Euro At least I got the euro correct Last night I said it had a good chance of closing higher on Tuesday and so it did back up to 1 1186 on a tall spinning top the second one in a row All the indicators now continue moving higher off of oversold and we have a bullish stochastic crossover in place However the new overnight is moving lower after having gapped up now calling into question whether this is the start of a new rally or just another fake out breakout like we saw last week
Transportation On Tuesday the trans outperformed the Dow with a giant 2 81 advance that clearly broke recent resistance at 7908 All the indicators continue rising but are not yet overbought so with a tall green marubozu now in place there are no bearish signs on this chart
With no bearish technical indications to speak of on the charts tonight and some decent follow through in the overnight futures it doesn t seem unreasonable to call Wednesday higher
Single Stock Trader
Last night Verizon wasn t looking at all like my preferred swing trade buy set up but on Tuesday it got caught up in the general market euphoria and gapped up anyway over 2 and a quarter percent to put in a green hanging man But that also caused the stochastic to suddenly curve back around just shy of a bullish crossover And with the other indicators having arrested their fall from overbought and now moving higher again it looks like VZ may continue higher on Wednesday but this is still not my preferred buy setup |
VZ | Due To Sudden ES Spike Thursday Uncertain | The Hoot Actionable ideas for the busy trader delivered daily right up front
Thursday uncertain
ES pivot 1956 75 Holding below is bearish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ still not a swing trade buy
Recap
Last night I was pretty sure the market was going higher on Wednesday We had a nice tall green marubozu and the indicators looked like they were rising towards overbought But Mr Market fooled me and instead the Dow plunged with another triple digit decline to fall right back into its recent consolidation zone Is there no end to this We check the charts for clues to Thursday
The technicals
The Dow Since last month s big dump the Dow has been unable to put together more than two in a row in either direction That trend continued on Wednesday when it fell 239 for its third triple point move in a row Clearly volatility is the word as it has been for the past month I thought we had a chance of moving higher and indeed the Dow took a big leap out the gate Wednesday morning but that was it It was all downhill from there That left the indicators all continuing to descend from overbought and now with a tall bearish engulfing pattern in place this chart just looks bearish for Thursday
The VIX Last night it wasn t very clear what the VIX was going to do on Wednesday The wide ranging green candle we got on Wednesday was proof enough of that In the end we got a small 5 34 gain That leaves the indicators stuck halfway between oversold and overbought but with a completed bullish stochastic crossover and a bullish engulfing pattern now in place it looks like this chart has more upside potential than downside risk
Market index futures Tonight all three futures are lower at 12 40 AM EDT with ES down 0 08 So much for Tuesday s bullish engulfing pattern On Wednesday ES began with good intentions with a sharp move higher But that was all it had and it spent the rest of the day falling apart The net result was a good bearish engulfing pattern With the new overnight confirming that with a continued move lower this chart looks nothing but bearish for Thursday
ES daily pivot Tonight the ES daily pivot rises again from 1950 08 to 1956 75 But that now leaves ES below its new pivot so this indicator turns bearish
Dollar index I also missed the dollar on Thursday Wednesday night I thought it was going to lower but instead it gapped up early although it did finally come back in to end the day up all of 0 02 That leaves it now in a four day consolidation range with the indicators continuing to fall off of overbought towards oversold In general that looks bearish except for the fact that we are now almost down to some decent three day support On the whole though I have to think there is still more downside available here on Thursday
Euro At least last night I had the sense to equivocate on the euro after a wide ranging spinning top on Tuesday On Wednesday it put in a second wide ranging candle this one a small real bodied red hanging man which again is a reversal warning But in the new overnight it looks like that has also come to nothing as the euro continues significantly higher in the new overnight dragging the indicators higher with it That all looks like a good setup for a higher close on Thursday
Transportation And finally I was also wrong about the trans After a tall green marubozu on Tuesday I thought there was more room to run higher on Wednesday But it was not to be and instead we lost 0 71 on a small bearish engulfing pattern The indicators are not yet quite overbought but the stochastic has just squeaked out a bearish crossover So overall this chart looks negative for Thursday
Tonight the charts are all looking decidedly more bearish than last night and that includes the futures With the VIX still floating around above 25 I may live to regret this but the only logical course of action seems to be to call Thursday lower
1 30 AM Update Due to a sudden spike in ES possibly due to some comments that just came out from the BOJ I m revising my call for Thursday to simply uncertain
Single Stock Trader
I was a bit surprised last night about Verizon s advance on Tuesday but I wasn t ready to commit to a buy Good thing too because on Wednesday it formed the mother of all bearish engulfing patterns to close down 1 on a tall red marubozu That sent the indicators all continuing lower including the stochastic so this chart definitely looks bearish tonight Still no buy here |
VZ | Wednesday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday uncertain
ES pivot 1959 42 Holding above is bullish
Rest of week bias lower technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
The market ended up doing quite nicely on Tuesday moving higher in pretty much a straight line all day long before giving back trust a tad into the close for a 229 point gain in the Dow That finally gives us some interesting charts to chew on so let s get to them as this momentous week rolls on Op ex and interest rates and triple witching oh my
The technicals
The Dow Last night I mentioned the possibility of a rising triangle here and with a 1 4 gain it sure looks like we got a breakout on Tuesday But does a one day pop constitute a new trend particularly in such a tricky week I don t think so This one could just as easily fall back on Wednesday
The VIX Here s a good example last night it appeared the VIX might move higher but instead it just continued lower down another 7 on Tuesday Indicators are still not yet oversold but we re now near support around 22 40 There s no immediate reversal in sight but we could possibly get a hammer on Wednesday
Market index futures Tonight all three futures are lower at 2 01 AM EDT with ES down 0 14 ES had a very good day Tuesday breaking out of recent resistance at 1958 But the indicators have just gone overbought and the overnight seems to be faltering That suggests the possibility of a nervous mean reversion on Wednesday
ES daily pivot Tonight the ES daily pivot rises from 1948 25 to 1959 42 ES is back above its new pivot so this indicator is now bullish again
Dollar index Last night I didn t want to commit to a dollar gain on Tuesday and that s a shame because it had a nice 0 39 green marubozu for a bullish engulfing pattern that was stopped only by its 200 day MA Indicators are now oversold and the stochastic just squeaked out a bullish crossover so this one looks higher on Wednesday
Euro At least I caught Tuesday s move lower in the euro as it slid back down to 1 1290 just touching its 200 day MA before bouncing off it a bit The indicators are now overbought and the stochastic has completed a bearish crossover Tuesday s trade was also outside the rising RTC for a bearish setup The overnight though seems to be attempting a rally but everything else suggests lower on Wednesday
Transportation On Tuesday the Trans continued their latest uptrend with a big 1 85 gain Indicators are back to overbought but this tall green marubozu is hardly a bearish sign
Ordinarily I d say a good day like Tuesday with a rising triangle exit would call for continued higher but with all the booby traps in place this week it s possible the traders may simply take profits on Wednesday as they await the Fed And the overnight futures seem to be supporting that so far at least So I ll just have to call Wednesday uncertain again Oh and since everyone else in the universe has weighed in on this I ll add my own prognostication the Fed won t raise rates until December
Single Stock Trader
Verizon NYSE VZ was swept up in the3 general Dow euphoria on Tuesday and broke out above recent resistance but that just makes it look even less like my preferred buy pattern so I ll just watch this one some more |
VZ | Thursday As Uncertain As They Get | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday uncertain
ES pivot 1959 42 Holding above is bullish
Friday bias lower technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Well we re coming down to the wire here On Wednesday the markets put in another nontrivial gain as everybody looks forward to Thursday s big big big announcement from the Fed It seems that Mr Market is pricing in a zero interest rate rise Whether that s true or not remains to be seen so we go ahead with the chart rundown as usual for whatever it may be worth
The Technicals
The Dow Dow gained another significant 140 points to confirm Tuesday s ascending triangle breakout That sent all of the indicators to overbought but the stochastic has yet to begin a bearish crossover Of course none of this means a whole lot since everybody is now waiting for the Fed decision on Thursday
The VIX Last night I said it looked like the VIX was likely going lower again on Wednesday but we might get some sort of a reversal hammer Well nice try but instead the VIX just kept right on going lower with a 5 28 loss on a tall red marubozu That took the indicators back to oversold and sent them all running lower with no sign of a bullish stochastic crossover as we remain in a two week long descending RTC So there are no real bullish signs on this chart tonight at all
Market Index Futures Tonight all three futures are lower at 12 12 AM EDT with ES down 0 15 ES made it two in a row on Wednesday with another decent advance that broke through resistance at 1980 The indicators continue to rise and are now just overbought There s nothing really bearish about the technicals here tonight aside from the fact that the overnight seems to be sagging a bit I don t know if this reflects profit taking or uncertainty about Thursday s Fed decision but it does call into question whether ES has enough gas in the tank to move higher on Thursday
ES Daily Pivot Tonight the ES daily pivot rises again from 1959 42 to 2085 92 That still leaves ES above its new pivot so this indicator continues bullish
Dollar Index The dollar definitely fooled me on Wednesday I thought after Tuesday s big advance it still had enough gas left to break through its 200 day MA on Wednesday but it was not to be After a brief attempt to break through it fell back and never challenged again ending with a 0 25 loss The resulting candle is a bearish harami though the indicators remain all oversold The stochastic is threaded out and so overall this chart looks negative Thursday
Euro Last night I thought the euro looked like it was going lower on Wednesday and indeed it opened lower but then spent the rest of the day recovering to close at 1 1294 The result was a tall hammer that successfully tested the 200 day MA That still leaves the indicators overbought however the stochastic has a completed bearish crossover On the other hand the new overnight is moving higher again gapping up significantly And to complicate matters Wednesday s trade was outside the rising RTC for a bearish set up The net result is that this chart has no direction at all and so I m not calling it for Thursday
Transportation Last night I noted that the trans had no bearish signs in sight and it proved to be true as on Thursday they gained another 0 24 But with indicators now pretty overbought and the stochastic threaded out at a high level and a short stubby spinning top sitting at the top of Tuesday s giant green candle it s not clear that the trans have any more gas left in the tank for a further advance on Thursday But with the Fed announcement coming out that s all moot anyway
I normally call Fed days as uncertain as a matter of course But Thursday s announcement is as uncertain as they get The talking heads are all over the place on this one Will the Fed raise or pass Will it be 0 25 or 12 basis points Will it be now or December Or next year Who knows Personally I m just sitting tight and waiting We ll see In the meantime I can t think of a better occasion to call Thursday uncertain
Single Stock Trader
It was good to be cautious about Verizon NYSE VZ last night because on Wednesday it came in dead last being the only loser in the entire Dow The resulting dark cloud cover coupled with overbought indicators and a stochastic about to form a bearish crossover all makes this look more like a short for Thursday then any sort of a buy |
VZ | Triple Witching Friday Brings Uncertainty | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Friday uncertain
ES pivot 1987 00 Holding below is bearish
Next week bias lower technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Well that was certainly interesting The market went essentially nowhere as expected until 2 PM and then as soon as the Fed announcement came out all hell broke loose as Mr Market went right off his meds again First the market was up then it was down then was way up and then finally it spent the rest of the afternoon sinking until the Dow finished with a modest 65 point loss I ll have to seriously consider taking up day trading if this kind of thing continues In the meantime we got an interesting candle so let s take a look at the implications
The Technicals
The Dow In the end after all the months of endless speculation and hoopla surrounding the question of whether the Fed would raise rates in September or not the end result was pretty anticlimactic I will point out that the Night Owl was one of the people who predicted there would be no rate increase in September What we did get on Thursday was a small 0 39 loss in the Dow with a tall inverted hammer that caused the indicators to peak just above overbought and begin moving lower The stochastic is also now well positioned for a bearish crossover While we remain in a rising RTC the stage seems to be set for a move lower
The VIX With all the crazy action on Thursday you would think the VIX would have spiked higher Instead it actually fell 1 But it did it on a tall spindly spinning top that seems to have caused the indicators to bottom at oversold With the stochastic threaded out at a low level it is useless for prediction though However we now at least have a reversal warning so it s not out of the question that the VIX might move higher
Market index futures Tonight all three futures are higher at 12 39 AM EDT with ES up 0 16 Like the Dow on Thursday ES put in a an inverted hammer with a giant upper shadow The real body of this candle is a bearish harami and the indicators are back to overbought We also have a new bearish stochastic crossover and the overnight is gapping lower making it look like there is more downside in store
ES daily pivot The ES daily pivot rise from 1979 92 to 1987 00 That s enough to put ES back below its pivot so this indicator now turns bearish
Dollar index After a failed attempt at reclaiming its 200 day MA on Wednesday on Thursday the dollar simply gave up the ghost and gapped down with a huge 0 91 loss that really got going as soon as the Fed announcement came out There is nothing bullish about this chart and with the lower BB now not too far away it looks like there s more downside in store
Euro And of course similarly on Thursday the euro put in a tall green candle to break resistance convincingly at 1 1359 before closing at 1 1413 its best close since August 25th With a confirmation of Wednesday s spinning top and support from the 200 day MA there s nothing really bearish about this chart other than the fact that the euro might have run a little too far too fast The overnight was running slightly higher but at the moment is forming a spinning top of its own and so it s not clear whether the euro has enough gas in the tank to continue higher
Transportation When the smoke cleared Thursday the trans put in a tall inverted hammer just like the Dow However unlike the Dow they actually managed to gain 0 39 as opposed to fall 0 39 That keeps them in a rising RTC and even though the indicators remain quite overbought this is only a tentative reversal sign and one which requires confirmation
There s a small rally attempt going on in ES but the overall look of the charts is bearish It looks like our ascending triangle breakout is fizzling Unfortunately our reversal signs like the VIX require confirmation And to top it all off Friday is a triple witching So I regretfully have to call Friday uncertain Perhaps with this crazy week finally behind us we can get back to calling the close next week That s all she wrote
Single Stock Trader
When all the shouting was over Verizon NYSE VZ was not one of the winners on the Dow suffering a gap down 2 loss on Thursday that sent the indicators continuing lower off overbought and also formed a bearish stochastic crossover The candle is a wide ranging spinning top but with the indicators still nowhere near oversold it still isn t a swing trade buy |
VZ | Bearish Charts Indicate Monday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 1958 25 Holding below is bearish
Rest of week bias lower technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
The selling resumed on Friday with typical triple witching madness on huge volume even for an options expiration day that sent just about everything lower leaving the charts with awash in a sea of red with some candles that changed things in interesting ways So let s move on to the last full week of September and see if we can start making some calls again now that we have the Fed and OpEx out of the way
The Technicals
The Dow On Friday the Dow confirmed Thursday s tall inverted hammer by dumping 290 points on a tall red candle That was enough to drop it right out of its most recent rising RTC for a bearish setup The indicators all continued falling from overbought and the stochastic has now completed a clear bearish crossover So there s nothing at all bullish looking about this chart for Monday
The VIX Somewhat surprisingly perhaps on Friday given all the market chaos the VIX did rise but only 5 39 And it did that on a small gap up red spinning top The indicators remain oversold but not dramatically so and we do now seem to have a completed bullish stochastic crossover However that s in conflict with the reversal warning from the candles so overall I can t call this chart tonight
Market index futures Tonight all three futures are lower at 12 16 AM EDT with ES down 0 41 On Friday ES confirmed Thursday s tall inverted hammer with its worst loss in nearly two weeks That sent the indicators while moving lower off overbought But they re still a long way from oversold It was also enough of a move to send us out of a rising RTC for a bearish setup And the new overnight seems to be continuing that trend with some further losses so there s nothing really bullish about this chart tonight
ES daily pivot Tonight the ES daily pivot falls again from 1987 00 to 1958 25 ES remains below its new pivot so this indicator remains bearish
Dollar index After a nasty fall on Thursday the dollar gapped down early Friday but then spent rest of the day climbing back up to retrace half of Thursday s losses on a classic bullish piercing pattern The stochastic remains threaded out at oversold levels but the indicators now look to have bottomed at oversold and are rising again So this chart looks higher on Monday
Euro And similarly on Friday the euro put in a dark cloud cover on a wide ranging lopsided spinning top that finished by retracing half of Thursday s gains for a close at 1 1368 The new Sunday overnight seems to be confirming the bearish candle with a big gap down as indicators continue to fall off of overbought So it looks fairly certain that the euro will close lower on Monday
Transportation Friday s chart of the trans looks just about exactly like the Dow so everything I wrote about the Dow applies here too There s nothing bullish about this chart tonight
Historically September is just a terrible month and this coming week is the worst week in September with the Dow being down 19 of the last 24 years according to The Stock Trader s Almanac And right now it doesn t look like this year is going to be any different Tonight all the charts look bearish so it looks like I m just going to have to call Monday lower
Single Stock Trader
Once again last Friday Verizon NYSE VZ joined the rest of the lemmings diving off the cliff It dropped 1 46 on a tall red candle that broke support around 44 68 But even with that the indicators are still not yet oversold and the stochastic is a long way from even beginning a bullish crossover Even after three straight days of losses this dog is still not a swing trade buy |
VZ | Tuesday Depends On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher only if ES remains above its pivot else lower
ES pivot 1956 83 Holding above is bullish
Rest of week bias lower technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Well Mr Market really fooled me on Monday I sure wasn t expecting a 126 point gain in the Dow Of course I can t complain since I m always net long anyway but things don t always work out exactly the way we planned so we just forget about it and move on to Tuesday Let me add that there s a chance I may not be able to publish Tuesday night since I have an all day event that may not leave me enough time to put together the usual post
The Technicals
The Dow On Monday the Dow started off strong and then kept right on rising until about 11 AM when Honest Hillary who couldn t keep her fingers off her keyboard started twitting about how she was shocked to find that that drug prices are high That set off a decline but the Dow nevertheless managed to finish up 0 77 on the day And that left the indicators all moving higher even though they never hit oversold Except for the stochastic which continues to fall and is still showing no sign of a bullish crossover Monday s action also traded outside the rising RTC which now makes it an official bearish trigger So it remains to be seen if Monday s rally can be sustained into Tuesday
The VIX And on Monday the VIX put in a tall red candle confirming Friday s gap up spinning top With indicators still oversold but not going anywhere this just looks continued lower
Market index futures Tonight all three futures are lower at 12 24 AM EDT with ES down 0 23 On Monday ES put in a small bullish piercing pattern but one which still traded outside its rising RTC and that is a bearish trigger The new overnight is forming another dark cloud cover all of which leaves this chart too tough to call though it looks more bearish than not
ES daily pivot Tonight the ES daily pivot falls again from 1958 25 to 1956 83 And that s enough to put ES back above its new pivot so this indicator flips back to bullish
Dollar Index On Monday the dollar took a huge 1 09 gap up pop to blast right back up through its 200 day MA That completes a bullish stochastic crossover as the indicators all move higher just off oversold So this chart is now technically bullish
Euro And on Monday the euro confirmed Friday s dark cloud cover with a tall gap down red candle to close back to 1 1206 and busting down through its own 200 day MA Indicators continue falling off overbought so there s nothing bullish here other than a weak rally attempt as I write this
Transportation After a big dump Friday on Monday the trans retraced a quarter of that but with an unconvincing inverted hammer With indicators still falling just off oversold it doesn t look particularly bullish to me
With ES so close to its pivot and with a few conflicting directions among the charts I m going to do a conditional call tonight if ES manages to remain above its new pivot by mid morning Tuesday we ll close higher But if it breaks below and stays there we close lower
Single Stock Trader
Verizon Communications Inc NYSE VZ was one of the weaker members of the Dow on Monday but nonetheless managed to put in a small gain that was important because it respected support at 44 56 It was also enough to cause the indicators to begin moving higher before ever reaching oversold although the stochastic has still yet to begin turning around for a bullish crossover So while this move was encouraging it s still not my preferred swing trade buy entry |
VZ | US STOCKS Financials lift Wall St in late rally | Home builders banks up after home sales data
New home sales post biggest monthly gain in eight years
Dow up 0 2 pct S P up 0 3 pct Nasdaq up 0 1 pct
Updates to close
By Rodrigo Campos
NEW YORK July 27 Reuters U S stocks rose slightly on
Monday in a late rally as investors rotated into financial
shares which had lagged in the recent two week rally
Upbeat data on new home sales underpinned financial
stocks the session s strongest sector and prompted investors
to snap up the shares of several regional banks which had
been among the worst hit by credit losses tied to a weak
housing market
Regions Financial Corp jumped 8 9 percent to 4 02 on the
New York Stock Exchange and Zions Bancorporation soared 13
percent to 12 65 on Nasdaq while the S P financial index
rose 1 5 percent
Financials had lagged in the previous weeks but Friday
saw the beginning of a rotation into the sector and out of
technology which continued Monday according to Michael
James senior trader at Wedbush Morgan in Los Angeles
The Dow Jones U S home construction index shot up 4 3
percent after data showed U S new home sales posted their
biggest monthly gain in eight years in June suggesting the
housing market may be starting to recover from its worst slump
since the Great Depression of the 1930s
Stronger than expected earnings coupled with upbeat
economic data have lifted indexes recently giving stocks
their best two week run since just after the S P 500 hit a
12 year closing low in the beginning of March The three major
indexes rose about 11 percent each over the past two weeks
The Dow Jones industrial average rose 15 27 points or
0 17 percent to 9 108 51 The Standard Poor s 500 Index
gained 2 92 points or 0 30 percent to 982 18 The Nasdaq
Composite Index added 1 93 points or 0 10 percent to
1 967 89
There was a little more willingness to bid stocks up two
weeks ago on positive earnings surprises said Wedbush
Morgan s Michael James You re seeing people less willing to
do that now given the move the market has had in the last two
weeks
Shares of Dow component Verizon Communications fell 1 6
percent to 31 after the company reported second quarter
earnings that fell from a year ago
Aetna shares shed 2 7 percent to 25 72 after the company
one of the biggest U S providers of employer based health
insurance cut its full year outlook citing
higher than projected medical costs
Editing by Jan Paschal |
XOM | BP s Dudley seen reigning for years to restore major s might | By Dmitry Zhdannikov and Ron Bousso LONDON Reuters When BP L BP boss Bob Dudley clinched a final deal to settle litigation over the deadly Deepwater Horizon disaster many oil industry executives and investors thought his mission was accomplished But now two years later the 61 year old is showing no sign of easing into retirement In fact he plans to oversee an ambitious expansion plan and stay at the helm of the British oil major until at least the end of the decade according to sources familiar with the matter The American CEO has told his leadership team that it is in his family s tradition to not retire until 65 which would take him to 2020 and that he could perhaps work even longer than that the sources said In another signal that there is unlikely to be a change at the top anytime soon there has been no imminent succession planning at the firm according to the sources one of who said succession was not a live project When Dudley finally decides to go there will no shortage of candidates to take his place however BP s chief financial officer British national Brian Gilvary 55 and the head of upstream Irishman Bernard Looney 46 have been cited as possible successors There has been persistent industry speculation about when Dudley will call time on his BP career since he struck the 2015 settlement deal under which the company agreed to pay out a total of about 60 billion over the disaster that left 11 dead and led to the largest oil spill in U S history He had been made CEO in 2010 the first American to lead BP in its 108 year old history to steer the company through the swathe of U S litigation and the deal represented a milestone But rather than stepping back from the fray he has since embarked on the biggest expansion plan in a generation for BP even in the face of a collapse in oil prices SAFE HANDS The company has become the fastest growing oil major in the world It will launch seven oil and gas fields this year more than any other year in its history and will launch nine more before the end of the decade adding 800 000 barrels per day bpd of oil and gas to its production By 2020 the company including its stake in Russian oil giant Rosneft MM ROSN will be producing as much as 4 million bpd the same as before the Deepwater Horizon spill and up from the 3 million bpd it was producing after offloading assets to cover the litigation costs We are firing on all cylinders Dudley told a shareholders meeting in May as he aims to catch up with production volumes of its biggest rivals Exxon Mobil N XOM and Royal Dutch Shell l RDSa Whether this strategy will prove effective in the long term is by no means certain BP s large liabilities linked to Deepwater Horizon mean it requires a significantly higher oil price than the present price and compared with rivals to pay for its operations and dividends A sluggish recovery in oil prices could also lead to its already high debt rising further Rating agency Moody s upgraded BP s credit rating last week for the first time in 19 years while in another sign of confidence 97 percent of BP shareholders voted to approve Dudley s new pay package last month Bob hasn t done anything that we wouldn t agree with so far When times are hard and bad I would want someone who is pretty sensible and conservative said Rohan Murphy from Allianz DE ALVG which holds BP shares Dudley is a safe pair of hands He won t do anything too maverick Murphy added The recent rating upgrade shows the story hangs together OLIGARCH BATTLE The calm and softly spoken Dudley was stress tested more than once before getting the top job His career included three punishing years fighting a corporate war with Russian oligarchs at the firm s giant Russian venture TNK BP that forced him to flee the country and go into hiding He became BP chief executive when his predecessor Tony Hayward s tenure ended abruptly following the explosion of the Deepwater Horizon platform in the Gulf of Mexico in 2010 Dudley was given a task of steadying the ship as BP struggled with a firestorm from the U S government victims of the spill environmental groups and shareholders Over the next five years the company shed more than 55 billion worth of oil fields refineries and infrastructure to pay for the spill clean up BP was abandoning low margin projects and mature markets like Venezuela or Vietnam often getting top dollar for its sales as oil prices hovered above 100 per barrel In retrospect BP had unknowingly stolen a march on most of its rivals who had to embark on similar asset sales much later when crude prices began to collapse in 2014 DEBT PILE Just as BP was slowly emerging from the spill fallout the collapse in oil prices drove it to its biggest loss ever in 2016 Like its peers BP responded by slashing thousands of jobs and tightening budgets The efforts bore fruit In the first quarter of 2017 its profits tripled and its production rose to a five year high thanks to higher production Dudley s team argues that this will only improve over time as the company s strategic change of tack means it is producing more profitable oil and gas from a smaller number of fields Another metric investors are also closely watching is BP s debt standing at 38 6 billion or 28 percent of its total equity including debt the highest figure among oil majors That ratio is set to improve as Deepwater Horizon cash payments decline over the coming years They amounted to about 7 billion in 2016 and 4 5 billion in 2017 but will fall to 1 2 billion from 2018 BP can currently balance its books only at 60 per barrel compared to 50 for most of its rivals but that figure should also fall as Deepwater Horizon payments decline Bob Dudley is building something that could be very interesting in the future he just gets on with business and that s what investors want said James Laing equities fund manager at Aberdeen Asset Management which holds BP shares
The dividend is still sustainable debt levels are high but will come down the cash breakeven has been lowered the resource base is still increasing he added It doesn t feel like there is a lot of criticism to be made |
XOM | Exxon reaches confidential settlement in 2013 Arkansas spill | Exxon Mobil NYSE XOM settles a lawsuit with Arkansas homeowners affected by the 2013 rupture of its Pegasus Pipeline the terms are kept confidential The rupture caused 150K gallons of Canadian tar sands oil to flow through a residential area requiring the evacuation of dozens of homes government attorneys have said the rupture caused more than 57M in property damage XOM already has paid more than 5M to settle lawsuits brought by federal and state regulators Now read |
XOM | U S Senate votes near unanimously for Russia Iran sanctions | By Patricia Zengerle WASHINGTON Reuters The U S Senate voted nearly unanimously on Thursday for legislation to impose new sanctions on Russia and force President Donald Trump to get Congress approval before easing any existing sanctions on Russia In a move that could complicate U S President Donald Trump s desire for warmer relations with Moscow the Senate backed the measure by 98 2 Republican Senator Rand Paul and Bernie Sanders an independent who caucuses with the Democrats were the only two no votes The measure is intended to punish Russia for meddling in the 2016 U S election its annexation of Ukraine s Crimea region and support for Syria s government in the six year long civil war If passed in the House of Representatives and signed into law by Trump it would put into law sanctions previously established via former President Barack Obama s executive orders including some on Russian energy projects The legislation also allows new sanctions on Russian mining metals shipping and railways and targets Russians guilty of conducting cyber attacks or supplying weapons to Syria s government The legislation sends a very very strong signal to Russia the nefarious activities they ve been involved in Senator Bob Corker the Republican chairman of the Senate Foreign Relations Committee said as lawmakers debated the measure If the measure became law it could complicate relations with some countries in Europe Germany and Austria said the new punitive measures could expose European companies involved in projects in Russia to fines The legislation sets up a review process that would require Trump to get Congress approval before taking any action to ease suspend or lift any sanctions on Russia Trump was especially effusive about Russian president Vladimir Putin during the 2016 U S election campaign though his openness to closer ties to Moscow has tempered somewhat with his administration on the defensive over investigations into Russian meddling in the election Putin dismissed the proposed sanctions saying they reflected an internal political struggle in the United States and that Washington s policy of imposing sanctions on Moscow had always been to try to contain Russia The bill also includes new sanctions on Iran over its ballistic missile program and other activities not related to the international nuclear agreement reached with the United States and other world powers UNCERTAIN PATH IN HOUSE To become law the legislation must pass the House of Representatives and be signed by Trump House aides said they expected the chamber would begin to debate the measure in coming weeks However they could not predict if it would come up for a final vote before lawmakers leave Washington at the end of July for their summer recess Senior aides told Reuters they expected some sanctions package would eventually pass but they expected the measure would be changed in the House The Trump administration has pushed back against the bill and his fellow Republicans hold a commanding 238 to 193 seat majority in the chamber Secretary of State Rex Tillerson questioned the legislation on Wednesday urging Congress to ensure that any sanctions package allows the president to have the flexibility to adjust sanctions to meet the needs of what is always an evolving diplomatic situation Previously U S energy sanctions had only targeted Russia s future high tech energy projects such as drilling for oil in the Arctic fracking and offshore drilling They blocked U S companies such as Exxon Mobil NYSE XOM where Tillerson was chairman from investing in such projects The new bill would slap sanctions on companies in other countries looking to invest in those projects in the absence of U S companies a practice known as backfilling Also included for the first time are discretionary measures the Trump administration could impose on investments by companies in Western countries on Russia energy export pipelines to Europe
The Senate also voted overwhelmingly on Thursday to add provisions to the bill allowing the U S space agency NASA to continue using Russian made rocket engines and the 100 senators voted unanimously for an amendment reaffirming the U S commitment to the NATO alliance |
XOM | Chinese state oil giants take petrol price battle to the pumps | By Chen Aizhu LULIANG China Reuters Chinese state oil giants Sinopec and PetroChina are waging war at the nation s gas pumps slashing prices at unprecedented rates in an effort to reclaim sales lost to private local and foreign rivals in the 440 billion retail fuel market The rare price war kicked off in late March as Sinopec HK 0386 reported first quarter retail sales had slid to a three year low Spurred by a glut of fuel Sinopec started offering hefty discounts in response to ad hoc but frequent promotions by independent petrol station operators PetroChina HK 0857 swiftly joined in triggering a ferocious battle against independents and international firms including Shell L RDSa and BP L BP said three state oil sources involved in retail fuel marketing The heavy discounting is now spreading from the most heavily oversupplied provinces in China s north squeezing fat retail profit margins in the world s No 2 fuel market The battle is proving a boon for China s drivers In the gritty northern coal town of Luliang taxi and delivery drivers were queued up at a Sinopec outlet after it slashed pump prices by 1 4 yuan 0 21 per liter or nearly a quarter one recent weekend We all know Sinopec has higher gas quality but it was so expensive so before I went to independent stations to fill my vehicle one driver surnamed Zhang told Reuters as he waited to gas up his dusty gray 7 seat van Now I switch to Sinopec and will keep visiting here as long as Sinopec offers discounts like this Nearby gas stations run by PetroChina and local private operator Taihua each offered the same discount promoting the bargain prices with eye catching red banners free car washes and credits in pre paid petrol cards Sinopec spokesman Lu Dapeng said price cutting was the most common approach in market competition He didn t elaborate RARE DISCOUNTS Such basement prices are rare for Sinopec officially known as China Petroleum Chemical Corp SS 600028 and PetroChina the listed subsidiary of China National Petroleum Corporation In late March both were selling high grade fuel at a discount of just 0 20 0 40 yuan per liter As the independents deepened discounts to unbearable levels Sinopec responded by launching targeted attacks to reclaim lost sales said a state oil marketing official Price battles were rare before 2013 as rigid government price controls capped margins As recently as 2010 gas stations rationed diesel fuel as shortage hit But the plunge in global oil prices since 2014 and the sudden rise of independent refineries known as teapots transformed the market by flooding the country s 90 000 petrol stations with cheaper fuels Short of retail infrastructure and barred from exports teapots sell oil mostly to the country s 40 000 plus private petrol stations many run by families or independent fuel dealers The huge surplus the teapot oil plants have created is eroding the 80 percent market share the two oil giants used to hold several years ago said Yan Kefeng veteran oil researcher with IHS Markit Sinopec and PetroChina now control around two thirds of retail sales and independents about a quarter according to Yu Chang a former retail director with Shell China and the founder of AutoGo a fuel retailing e platform The battle has also drawn in global players such as BP Shell Total PA TOTF and Exxon N XOM Foreign firms now own and operate nearly 4 000 stations accounting for about 8 percent of sales mostly in joint ventures with Sinopec or PetroChina There has been price volatility in the fuel retailing market with seasonal demand and supply changes Shell wrote in an email Shell has rapidly boosted its retail network in China and now has a total of 1 200 sites MARGIN HIT While margins have taken a hit Sinopec and PetroChina are far from losing money in their retail businesses thanks to their market dominance in key consuming regions in the south and east where there is little need for discounts and wealthier motorists are less sensitive to price cuts Compared to 5 24 yuan a liter in Luliang Beijing motorists pay around 6 66 yuan for 95 octane euro 5 quality gasoline Beijing prices are some 12 percent above the premium gasoline in California but about half that of Singapore prices Sources at rivals say Sinopec may also be leading the charge as it aims to stem falling retail fuel sales and bolster its retail business ahead of a planned multi billion dollar IPO
Even with the hit in sales Sinopec s network of 30 000 fuel stations and more than 23 000 convenience stores is considered a jewel in the crown The division is estimated by analysts to be worth as much as 58 billion |
XOM | ExxonMobil XOM May Beat On Q1 Earnings Stock To Gain | Oil giant ExxonMobil Corporation NYSE XOM is set to report first quarter 2017 results on Apr 28 before the opening bell Last quarter the company reported earnings of 90 cents per share that beat the Zacks Consensus Estimate of 72 cents The quarterly earnings also increased from year earlier quarter earnings of 67 cents per share Let s see how things are shaping up for this announcement Exxon Mobil Corporation Price and EPS Surprise
Earnings WhispersOur proven model shows that ExxonMobil is likely to beat on earnings this time because it has the right combination of two key ingredients Zacks ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 1 18 This is because the Most Accurate estimate stands at 86 cents while the Zacks Consensus Estimate is pegged at 85 cents This is very meaningful and a leading indicator of a likely positive earnings surprise You can uncover the best stocks to buy or sell before they re reported with our Zacks Rank ExxonMobil carries a Zacks Rank 3 Hold Note that stocks with Zacks Rank 1 Strong Buy 2 Buy or 3 have a significantly higher chance of beating on earnings The combination of ExxonMobil s favorable Zacks Rank and a positive Earnings ESP makes us confident about an earnings beat Conversely the Sell rated stocks Zacks Rank 4 or 5 should never be considered going into an earnings announcement Factors to Consider this QuarterExxon Mobil is the world s best run integrated oil company based on its track record of high return on capital employed This is supported by the company s large scale of operations and diversification benefits Also the company s existing oil and gas development project pipeline is among the best in the industry These factors should continue to support the company s bottom line growth in the to be reported quarter as well as in the future Following the shale revolution the area along the Gulf Coast which boasts plentiful supply of oil and gas regained focus ExxonMobil is expected to capitalize on the availability of cheap natural gas to manufacture chemicals as well as energy efficient plastics for export In other words the company will cater to the growing demand for chemicals and refined fuels by taking advantage of the shale revolution Hence the company is expected to generate significant cash flows from its downstream operations in the to be reported quarter as well as in the long run Share Price MovementShares of ExxonMobil have outperformed the Zacks categorized industry in the last three months During the aforesaid period ExxonMobil stock lost 4 5 while the broader industry registered a decrease of 5 3 It remains to be seen how the stock fares after the first quarter earnings release Other Stocks to ConsiderExxonMobil is not the only company looking up this earnings season Here are some other firms that have the right combination of elements to post an earnings beat this quarter Tallgrass Energy GP LP NYSE TEGP has an Earnings ESP of 5 56 and a Zacks Rank 1 The partnership is expected to release earnings on May 3 You can see Chesapeake Energy Corp NYSE CHK has an Earnings ESP of 5 00 and a Zacks Rank 3 The company is expected to release earnings on May 4 Cimarex Energy Co NYSE XEC has an Earnings ESP of 1 18 and a Zacks Rank 5 The partnership is expected to release earnings on May 8 Looking for Ideas with Even Greater Upside Today s investment ideas are short term directly based on our proven 1 to 3 month indicator In addition I invite you to consider our long term opportunities These rare trades look to start fast with strong Zacks Ranks but carry through with double and triple digit profit potential Starting now you can look inside our home run value and stocks under 10 portfolios plus more |
XOM | ExxonMobil XOM Beats On Q1 Earnings Estimates | Irving TX based ExxonMobil Corporation NYSE XOM is the world s largest publicly traded oil company engaged in oil and natural gas exploration and production petroleum products refining and marketing chemicals manufacture and other energy related businesses The company divides its operations into three segments Upstream Downstream and Chemicals Currently ExxonMobil has a Zacks Rank 3 Hold but that could change following its first quarter 2017 earnings report which has just released You can see Coming to earnings surprise history the company has a track record of delivering positive earnings surprises It has beaten estimates in three of the last four quarters with an average positive earnings surprise of 11 91 We have highlighted some of the key quarterly details from the just released announcement below Earnings ExxonMobil beats on earnings Earnings per share came in at 95 cents above the Zacks Consensus Estimate of 85 cents Revenue Revenues misses expectations Revenues of 63 287 million were lower than the Zacks Consensus Estimate of 64 354 million Key Stats Production averaged 4 151 million barrels of oil equivalent per day MMBOE d down 4 year over year Liquid production fell 8 year over year to 2 333 million barrels per day However natural gas production was 10 908 MMCF d millions of cubic feet per day up almost 2 from the year ago period ExxonMobil s refinery throughput averaged 4 3 million barrels per day MMB D up by 2 4 from the year earlier level Exxon Mobil Corporation Price and EPS Surprise Check back later for our full write up on this ExxonMobil s earnings report later The Best Worst of ZacksToday you are invited to download the full up to the minute list of 220 Zacks Rank 1 Strong Buys free of charge From 1988 through 2015 this list has averaged a stellar gain of 25 per year Plus you may download 220 Zacks Rank 5 Strong Sells Even though this list holds many stocks that seem to be solid it has historically performed 6X worse than the market |
XOM | Exxon Mobil XOM Beats On Q1 Earnings Misses Revenues | Energy giant Exxon Mobil Corporation NYSE XOM posted strong first quarter 2017 earnings Increased realizations for liquids and gas as well as higher margin from the downstream business led to the outperformance
The company reported earnings of 95 cents per share which beat the Zacks Consensus Estimate of 85 cents The bottom line also improved from the year ago quarter level of 43 cents per share
Total revenue in the quarter increased to 63 287 million from 48 707 million in the year ago quarter However the top line missed the Zacks Consensus Estimate of 64 354 million due to lower oil equivalent production
Operational Performance
Upstream Quarterly earnings from the segment were 2 3 billion which compared favorably with a loss of 76 million in the prior year quarter Increased realizations from liquids and gas led to the outperformance
Production averaged 4 151 million barrels of oil equivalent per day MMBOE d down 2 3 year over year
Liquid production fell 8 year over year to 2 333 million barrels per day owing to increased maintenance works in Canada and Nigeria
However natural gas production inched up 2 from the year ago period to 10 908 MMCF d millions of cubic feet per day Project ramp ups drove the upside
Downstream The segment recorded profits of 1 1 billion The reported figure is 210 million higher than the January March quarter of 2016 This was due to improved margin and favorable volume and mix effects
ExxonMobil s refinery throughput averaged 4 3 million barrels per day MMB D up 2 4 from the year earlier level
Chemical This unit contributed approximately 1 2 billion This is 184 million less than the first quarter of 2016 Lower margins from the business unit led to the decline
Financials
During the quarter ExxonMobil generated cash flow of 8 9 billion from operations and asset sales The company returned 3 1 billion to shareholders through dividends Capital and exploration spending decreased 19 year over year to 4 2 billion
Q1 Price Performance
During the first three months of this year Exxon Mobil shares underperformed the Zacks categorized industry During the aforesaid period the company s shares lost 9 2 compared with 5 3 decrease for the broader industry
Other News
On Apr 26 2017 Exxon Mobil declared dividend of 77 cents per share for second quarter up 2 7 from the previous payout of 75 cents The increased dividend will likely be paid on Jun 9 to the shareholders on record as of May 12 2017
Zacks Rank
ExxonMobil currently has a Zacks Rank 3 Hold Some better ranked players from the energy sector include Antero Resources Corp NYSE AR W T Offshore Inc NYSE WTI and Diamond Offshore Drilling Inc NYSE DO Antero Resources and Diamond Offshore sport a Zacks Rank 1 Strong Buy while W T Offshore carries a Zacks Rank 2 Buy You can see
Antero Resources beat the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 239 10
W T Offshore had an average positive earnings surprise of 50 53 for the last four quarters
Diamond Offshore surpassed the Zacks Consensus Estimate in all the prior four quarters with an average positive earnings surprise of 353 3
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While we share many recommendations and ideas with the public certain moves are hidden from everyone but selected members of our portfolio services Would you like to peek behind the curtain today and view them
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CSCO | Cisco To Layoff 6 000 In Search Of Different Kinds Of Skills | By Cisco Systems Inc NASDAQ CSCO which released its fourth quarter earnings on Wednesday also announced that it would cut 6 000 jobs or nearly 8 percent of its global workforce according to media reports
The announcement of the imminent layoffs reportedly made by company executives on Wednesday during a conference call with investors and analysts comes at a time when the California based communications and technology company is struggling to profit from weak business in emerging markets
The emerging markets lost momentum in Q4 John Chambers Cisco chairperson and CEO reportedly said
In an interview with The Wall Street Journal Chambers said that the job reductions were not a cost cutting move but were needed to make room for adding different kinds of skills
We will exit this year pretty much with the same number of people we started the year with he told the Journal
Cisco reported 12 36 billion in revenues for the quarter ended July 26 down from 12 42 billion in the same quarter last year Its yearly revenues for 2014 stood at 47 1 billion a drop of three percent from 48 6 billion in 2013
The tech giant s net income for the fourth quarter of 2014 came in at 2 2 billion or 43 cents a share a 1 percent decline against 2 3 billion for the fourth quarter of 2013 indicating that the company is still struggling with growth
We are executing well in a tough environment Chambers said in a statement released Wednesday We are focused on growth innovation and talent especially in the areas of security data center software cloud and internet of everything Our strategy is sound our financials are strong and our market leadership is secure
Following the release of the earnings Cisco s stock inched up 0 2 percent on Wednesday but fell more than 1 percent in after hours trade |
CSCO | Cisco to cut another 6 000 jobs as forecast falls flat | By Marina Lopes Reuters Cisco Systems Inc O CSCO forecast tepid current quarter results and said it plans to cut another 6 000 jobs as the network equipment maker works through a transition toward a new cycle of high end switches and routers The latest round of layoffs is at least the third workforce reduction in about as many years for a company once synonymous with the Internet boom but which has lately struggled to sustain growth The company announced in August 2013 that it would cut 4 000 jobs And in 2011 it said it planned to reduce its workforce by more than 11 000 Shares in the company slipped 0 95 percent to 24 96 in extended trading from a 25 20 close on the Nasdaq The market doesn t wait for anyone We are going to lead it period Chief Executive Officer John Chambers told analysts on a conference call The ability to do that requires some tough decisions We will manage our costs aggressively and drive efficiencies Chambers partly blamed the cuts on the uncertainty in global demand In emerging markets where the company faces sluggish sales and increased competition Cisco saw continued challenges China product orders fell 23 percent and Brazil had 13 percent declines Unfortunately as we look out we don t see emerging markets growth returning for several quarters and believe it could get worse said Chambers Total product orders rose 1 percent with 2 percent growth in both the Americas and Europe the Middle East and Africa offset by a 7 percent decline in Asia and Pacific The mixed quarter has become the norm for Cisco said Zeus Kerravalla at ZK research As the market transitions your staff has to transition I see a lot of what they are doing as a reallocation and I think it is the right thing for the company Cisco s high end routers and switches declined 7 percent and 4 percent year over year respectively as customers were slow to order a new series of products Its data center revenues rose 30 percent and security sector revenues rose 29 percent Security revenue was boosted by the acquisition of SourceFire a cyber security firm Cisco acquired in October 2013 Cisco also forecast earnings per share of between 51 cents and 53 cents for its current fiscal first quarter It predicted flat to 1 percent growth in revenue for the period Cisco posted a smaller than expected 0 5 percent dip in fiscal fourth quarter revenue to 12 4 billion Wall Street on average had expected 12 1 billion according to Thomson Reuters I B E S That beat the company s previous guidance for a decline in revenue of between 1 percent and 3 percent for the quarter
Cisco reported a net profit of 2 8 billion in the fiscal fourth quarter flat from the year ago quarter and adjusted earnings of 55 cents per share That exceeded the consensus forecast of 53 cents Reporting by Marina Lopes Editing by Jonathan Oatis |
VZ | Wednesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday lower
ES pivot 2096 00 Holding below is bearish
Rest of week bias higher technically
Monthly outlook bias lower
Single stock trader VZ still not a swing trade buy
Recap
Last night I was conflicted about whether to call the market higher because of all the positive looking charts or just uncertain because I note that the Dow has been putting in lower highs since May now and Monday s high lies right along that descending line Well the latter view turned out to be a better interpretation and that now raises some concerns So let s continue to Wednesday as op ex week rolls along
The technicals
The Dow What stands out from Tuesday s results is the continuation of a trend back to May of the Dow continuing to make lower highs While the Dow remains in a short rising RTC and the indicators remain just short of overbought Tuesday s red spinning top is definitely concerning And I m giving it better than even odds of going lower again on Wednesday
The VIX The VIX chart definitely surprised me by gaining 5 91 on a bullish harami on Tuesday after really looking like it was going lower The net result was a trade outside the descending RTC for a bullish setup and a stochastic that s curving around for a bullish crossover So the VIX now looks higher on Wednesday
Market index futures Tonight all three futures are lower at 12 25 AM EDT with ES down 0 12 On Tuesday ES found resistance at 2100 just too much for it as it fell back to 2094 on a red spinning top in a move that curved the stochastic around in preparation of a bearish crossover and peaked the indicators short of overbought That s all a good sign of lower to come and despite a rally attempt earlier this evening ES is now drifting back down
ES daily pivot Tonight the ES daily pivot rises again from 2091 50 to 2096 00 That now puts ES back below its new pivot so this indicator turns bearish
Dollar index At least I got this much right when last night I wrote this chart looks bullish again And the dollar indeed gained another 0 26 on Tuesday rejecting the spinning top in a big way Indicators are only just barely off oversold and the bullish stochastic crossover is nicely completed so this one just looks higher again on Wednesday
Euro And last night I also wrote I don t think the selling is done here yet Good thinking too because the euro just fell out of bed Tuesday right back down to 1 1023 That was enough to drop it right out of a two week rising RTC for a bearish setup And with indicators only just now off overbought and a bearish stochastic crossover in full effect I think there s still room to run lower
Transportation It s also concerning that despite an absence of bearish signs on Tuesday the Trans lost 0 21 on a dark cloud cover as a spinning top Indicators are not quite yet to overbought but this pattern definitely doesn t look bullish anymore
What a difference a day makes Tonight all the charts are suddenly looking bearish and with continued failure at recent resistance indicating trouble finding more buyers I m going to have to go with that and call Wednesday lower
Single Stock Trader
Last night I didn t want to bless Verizon NYSE VZ despite a bullish engulfing pattern and indeed it lost ground on Tuesday this time on a bearish dark cloud cover as a spinning top With indicators still overbought and a completed bearish stochastic crossover there s just no buying this one |
VZ | Verizon 4 6 Yield Decades Of Dividend Growth | Verizon Communications NYSE VZ is one of the largest telecommunications companies in the world The company currently has a market cap of 192 9 billion
Prior to July 3 2000 Verizon was known as Bell Atlantic Including Bell Atlantic s dividend history Verizon has paid steady or increasing dividends since 1984
Investors looking for stability should look no further than Verizon The image below shows Verizon s dividend history since 1984
Verizon Wireless currently has a dividend yield of 4 6 For comparison the S P 500 has a dividend yield of just 2 0 Verizon s dividend yield is 130 greater than the S P 500 s
This makes Verizon Wireless an ideal candidate for retired or soon to be retired investors seeking both stability and yield
Verizon s Yield History
Now is not the perfect time to buy Verizon stock but that doesn t mean it is a bad time either The image below shows Verizon s dividend yield fluctuations over the last decade
The best time to buy Verizon was in 2010 At that time the stock could be purchased at yields of 6 and even briefly above 7 Stock don t become undervalued because everything is going well
In 2010 Verizon s dividend payments were very much in question The company had a large debt load and GAAP earnings had been reduced due to the Great Recession which had reached its bottom only a year earlier The company had a payout ratio over 200
As we all know now Verizon did recover The company continues to pay increasing dividends to this day
Today potential investors in Verizon no longer face the uncertainty investors in 2010 did What makes Verizon appealing today is its high yield despite the current low rate environment
The image below shows the yield on the 10 year U S treasury bond going as far back as the 19th century
You can clearly see that we are a historically low yield environment The 10 year treasury interest rate has only fallen since 2010 The only time in United States history that rivals today s low rate environment is the early 1940 s when rates were artificially reduced to support World War II spending
Verizon still has such a high yield because management is committed to paying out the bulk of its profits as dividends From 2005 through 2014 Verizon had an average payout ratio of 73 using adjusted earnings
While interest rates and yields have fallen in general this is not the specific case with Verizon Wireless In the year 2000 Verizon had a dividend yield of around 3 and the interest rate on 10 year treasury bonds was 6 Today Verizon has a 4 6 dividend yield while the 10 year treasury bond s yield has fallen to 2 1
Recent Results Total Returns
Verizon s high yield is attractive in today s low rate world relative to other investments On top of this the company posted solid results in its most recent quarter
Earnings per share grew 14 3 using adjusted earnings versus the same quarter a year ago Verizon s CEO Lowell McAdam had this to say about the positive results
Verizon has delivered another quarter of strong financial and operational results based on consistent network reliability and superior value that continues to attract new customers In the second quarter we again balanced quality Verizon Wireless connections growth with low churn and profitability and we announced and completed our acquisition of AOL We re now poised to offer customers exciting new over the top OTT mobile video services and we look forward to a very positive second half of 2015
Earnings per share growth was a result of the following
Comparable revenue grew 2 8
Wireless segment EBITDA margin increased from 42 3 to 43 9
Wireline segment EBITDA margin increased from 23 4 to 23 5
Diluted shares outstanding fell 1 6 due to share repurchases
Verizon s margin gains in its wireless segment were the biggest driver of favorable growth in the company s most recent quarter The company realized its lowest wireless churn rate in 3 years of just 0 9 Churn measures the percentage of customers who cancel their service in a given month
Over the last decade Verizon has compounded its earnings per share at 3 0 a year Dividends have grown at 3 2 a year
Verizon s management is expecting revenue growth of around 3 0 a year going forward in line with historical growth With continued share repurchases the company should be able to compound earnings per share at a rate of 4 0 a year not accounting for additional margin improvements
Verizon s management has managed to realize faster earnings per share growth in recent years If the company can continue to boost margins through efficiency gains shareholders could see earnings per share growth of 7 to 8 a year
Investors in Verizon should expect total returns of between 8 6 and 12 6 a year from dividends 4 6 and earnings per share growth 4 to 8
Final Thoughts
The S P 500 has offered investors compound total returns of around 9 a year over the long run Verizon Wireless expected total returns of 8 6 to 12 6 10 6 on average make it likely that investors in Verizon Wireless will outperform the market
Despite offering higher expected total returns Verizon Wireless has a price to earnings ratio of just 12 9 using adjusted earnings Compared with the S P 500 s current price to earnings ratio of 20 7 Verizon Wireless appears undervalued
In addition the company is highly stable Verizon s 3 decade streak of stable or increasing dividends shows the company has reliably rewarded income investors Verizon Wireless ranks in the top 30 of long term dividend stocks using The 8 Rules of Dividend Investing thanks to its solid total return potential low valuation and stability |
VZ | Monday Big Time Lower | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 1989 25 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ still not a swing trade buy
Recap
Well I guess there s not much I can say about Friday s collapse that hasn t already been said I sat there watching the market go off the rails all afternoon like some rubber necker gawking at a bad car crash I had to scroll my Dow chart all the way back to 2008 to find the last similar incident of such a bad sell off and that was in October 08 when Lehman Brothers collapsed Is the current state of things which I gather is largely due to fears of Chinese book cooking really as bad as that was Lets take a look at the charts and see if we can sort some reality from the smoking wreckage and get a clue as to where Monday s going
The technicals
The Dow Well now here s something you don t see every day in fact this is something I ve never seen in more than 10 years of doing this Technically we had a bearish setup on a rising RTC exit last Wednesday as you can see from the chart Then on Thursday we got a confirming bearish trigger and finally on Friday we got the payoff in a 500 point plus dive
But what s most concerning about this chart is the lower red line slightly increasing to the right that represents the lower line of a rising RTC that goes all the way back to the bottom of the Great Recession back in March of 2009 Any breach of this line represents a bearish setup of that rising RTC In other words the Dow has been rising more or less continuously ever since then Any break of that line indicates the clear possibility that the long running bull market ever since is now over
But in the short term at least we re looking at a market that has gone not just inverse parabolic but inverse hyperbolic Of course this may be exaggerated because last Friday was an options expiration day but still this is about as overdone as I ve ever seen and that goes back to the Great Recession So I ve got to think there s a short term reversal coming Real Soon Now
The VIX And now here s something even more astonishing Check out this chart of the VIX It pretty much speaks for itself This one s headed straight to the moon Alice Normally I d say it s more than ready to come crashing back down but the past few days have been anything but ordinary
Market index futures Tonight all three futures are wildly lower at 12 19 AM EDT with ES down an astounding 2 28 I have never ever seen a move of this magnitude in the overnight What the heck did Martians just land in China or something
ES daily pivot Tonight the ES daily pivot crashes again from 2042 58 to 1989 25 I believe this is the biggest one day drop in the pivot I ve ever seen and I ve been doing this since 2003 That leaves this indicator beyond bearish it s just plain spooky
Dollar index On Friday the dollar took its own impressive move with a huge one percent gap down red candle that busted its 200 day MA That sent the indicators oversold but not overly so And jeez this thing traded entirely below its lower BB But without a bullish stochastic crossover and no nearby support I can t call it higher yet
Euro And in perfect mirror image fashion on Friday the euro broke up through its own 200 day MA for a four day winning streak to close at 1 1450 its highest since May 15th That sent the indicators overbought but they continue to rise and with a steep rising RTC in effect there s no calling this lower
Transportation The trans on Friday were pretty much a copy of the Dow so everything I wrote there applies here too
Earlier Sunday afternoon I was all set to be writing about how Friday s action looked like a classic panic driven washout and how the selling would be about exhausted But judging by the futures this evening that s clearly not the case Apparently a bunch of stops are getting triggered and they re all diving for the exits at once This is the sort of market that separates the Night Owls from the parakeets It pretty much defines what it means to take the heat and it s getting pretty hot As for me when the VIX went over 20 I stopped trading I think there s going to be a great buying opportunity soon but it ain t gonna be on Monday This call is easy Monday lower much lower
Single Stock Trader
VZ took a dive last Friday along with everything else in the market although it wasn t hurt as bad as most of the rest of the Dow We got an inverted hammer making that the second one in a row It was enough to drive the indicators extremely oversold and we re now looking at a waterfall inverse exponential pattern We also have strong multi year support not too far away at 45 80 and then the lower BB 45 74 just below that It s still not quite my ideal setup as the stochastic has not yet formed a bullish crossover but it s pretty darn close so if the market is looking at all decent on Monday morning at the open I wouldn t be adverse to buying this here Unfortunately that doesn t look like it s going to happen |
VZ | With Futures Rallying Hard Overnight Tuesday Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 1889 00 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ still not a swing trade buy
Recap
Words simply fail me I thought last Friday s action was crazy but Monday topped them all Just for laughs I drew a descending RTC matching the current collapse and it shows that if this trend continues the dad will hit zero on December 8th of this year Obviously Mr Market is totally off his meds and has gone completely psycho But we need to maintain some sort of stability and the charts are going to have to provide that as we take a look at Tuesday to see when this insanity may end
The technicals
The Dow This was absolutely amazing On Monday the Dow put in the mother of all hammers let s call it Thor s hammer with more than a 1000 point spread from top to bottom We also saw selling volume reach a climax that exceeded even last Friday s crazy option expiration levels and finally sent the stochastic starting to curve around for a bullish crossover Meanwhile RSI hit 7 5 which is well below the level from which reversals usually come This is capitulation if I ever saw it With a candle that traded entirely below the lower BB this is about as good a reversal indicator as I have ever seen Ever
The VIX I thought Friday s VIX candle was crazy but on Monday the VIX picked up right where it left off finally topping out at over 53 a level that we haven t seen since the collapse of Lehman Brothers in October 2008 That only served to enhance the hyperbolic nature of the current run up and we know how those things always end Always The indicators have now hit impossibly overbought levels with RSI almost 98 and the stochastic finally curving around for a bearish crossover It is completely amazing to me that the VIX should now be at levels we haven t seen since the Great Recession I don t care what s going on in China this doesn t make any sense whatsoever With a gigantic inverted hammer the VIX now looks more than ready to come crashing back down to earth and reality
Market index futures Tonight all three futures are finally higher at 1 09 AM EDT with ES up an astounding 2 34 That s an even bigger move up than the crash lower we saw last night I m really running out of superlative adjectives here looking at the daily chart for ES On Monday the selling simply accelerated as ES fell right over a cliff falling all the way down to 1831 before finally recovering a bit With 5 days of ever taller red candles this is a textbook perfect inverse exponential and it s one that looks about ready to end And the overnight seems to be supporting that theory ES has now already retraced about 20 of Monday s losses and that s causing the stochastic to just barely give us a brand new bullish crossover while the rest of the indicators are still quite oversold This to me looks ready to reverse on Tuesday Heck we ve already retraced half of Monday s losses and it s still only 1 AM
ES daily pivot Tonight the ES daily pivot crashes again from 1989 25 to 1889 00 That amazing 100 point drop plus the gain in ES is enough to put it finally back above its new pivot so this indicator now turns bullish
Dollar index Along with everything else on Monday there was outsized action in the dollar as it cratered an amazing 1 74 crashing right down through its 200 day MA And like the other charts it s gone inverse hyperbolic with a series of gap down candles with the gap getting larger and larger everyday You d think this is never going to end but this kind of pattern always ends with a big reversal And with a giant spinning top on the books it looks like this is as good a time as any for that reversal to happen
Euro The euro meanwhile made a perfect mirror image of the action in the dollar rocketing right back up through its 200 day MA and through resistance at 1 1461 to close at 1 1603 And like the other charts we have a classic exponential pattern here that s now got the indicators quite overbought and the stochastic in position for a bearish crossover So it looks like the euro is ready to come back in for a landing pretty soon and the overnight is in fact finally finally guiding lower in non trivial fashion lending support to that theory
Transportation On Monday the trans were pretty much a carbon copy of the Dow giant hammer candle indicators at extreme oversold levels trading entirely below the lower BB with a stochastic just about to curve around for a bullish crossover It looks like we re about out of sellers so I think this one is finally ready to reverse
We have some really rare and freaky chart patterns going on the past two days With everything at such extreme oversold overbought levels it s high time for a reversal I ll note also that the SPX Hi Lo indicator hit zero on Friday It doesn t get any lower than that And of course with the futures rallying hard in the overnight I m reasonably confident that I can call Tuesday higher
Single Stock Trader
On Monday Verizon put in the spinning top to end all spending tops After bottoming at an incredible 38 06 it shot right back up again to finish at 44 74 still lower than its lower BB on massively increased volume It also formed a bullish stochastic crossover and RSI has now hit one which is amazing in itself This is about as good a reversal indication as you re ever going to see and in this crazy world we ve got going right now I have to call it a buy |
VZ | With Overextended Charts Wednesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher
ES pivot 1893 75 holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ now a swing trade buy
Recap
Well it was another wild day on Wall Street Tuesday as the Dow opened up big as I had expected only to see all those gains evaporate after 3 o clock when apparently the Chicoms decided to lower their interest rates again That led to a 205 point loss for the Dow which makes four 200 point plus moves in a row and is apparently the only time in its entire history that that has happened
So just what the heck is going on here The market s crashing the market s not crashing The Fed is going to raise rates in September the Fed is going to raise rates next March We re in a correction we re not in a correction The economy is fundamentally fine the economy is fundamentally flawed Just who are you supposed to believe Personally the only thing I believe is the charts so let s get right over there and see if we can make any sense at all out of this craziness
The technicals
The Dow The Dow just continues to get jerked around by the Chicoms On Monday we got a tall hammer which is a good reversal sign and on Tuesday we ended up with a tall inverted hammer also a good bullish reversal sign And this one was accompanied by a bullish stochastic crossover and highly oversold indicators RSI is now 3 48 The losing streak is now 6 in a row and as we ve mentioned four in a row for 200 point plus moves lower so there has to come a point where the selling is exhausted Technically this chart looks like its going higher but with the VIX still nearly 40 there s just no telling
The VIX Last night I said the VIX looked ready to move lower and indeed that s just what happened on Tuesday with an 11 59 decline although it was on a green spinning top Still that candle is in a bearish harami position and the indicators have now peaked at overbought and are proceeding lower Also the stochastic just gave us the bearish crossover and it s at a very high level which means that it s more likely for the VIX to move lower than higher from here
Even more interesting and this is a chart I haven t seen anyone mention lately is the VVIX which basically measures the volatility of the VIX Just take a look at this The long term historical mean of the VVIX is 86 On Monday it hit an astonishing high of 212 Then on Tuesday it gapped down hard to end at a still breathtaking 192 on a small green spinning top Those three most recent candles put together constitute a good evening star and that s a bearish pattern We also have a bearish stochastic crossover and indicators that are still overbought but now starting to move lower That all portends a lower VIX And that means that the market is likely to move higher real soon now
Market index futures Tonight all three futures are higher at 1 04 AM EDT with ES up 1 32 On Tuesday ES put in what ended up being a super tall long legged doji star sitting at the bottom of Monday s candle With RSI now at an extraordinarily low 0 63 and the stochastic lying flat on the floor one would think that there s a lot more upside potential here than downside risk But the volatility just keeps on coming in the overnight
ES daily pivot Tonight the ES daily pivot ticks up from 1889 00 to 1893 75 An overnight rally in ES has now put it back above its new pivot so this indicator is once again bullish
Dollar index After a big gap down on Monday the dollar gapped right back up again retracing 50 of those losses on Tuesday Monday s 1 27 gain was enough to form a bullish stochastic crossover and send the indicators higher although they are still oversold We re also still in a descending RTC but nearing the right hand edge All in all this chart looks like it might have possibilities to move higher again on Wednesday
Euro Meanwhile volume continue to be extraordinarily high in the euro trade on Tuesday and after a tall green candle on Monday the euro fell right back down again on Tuesday with a red inside harami to close at 1 1429 The overnight is gapping up higher once again so with the current muddled state of affairs who knows where this one is going on Wednesday
Transportation Despite an exponential run down in the trans there seems to be no stopping this headlong rush to oblivion I extrapolated the descending RTC and if the trend continues falling at the current rate they will hit zero by November 8th of this year That s right absolute zero The losing streak is now six days and despite massively oversold indicators the stochastic has yet to form a bullish crossover In fact its lines are now falling off the bottom of my chart I can t even see them anymore So I still can t call a reversal here yet
I m probably taking my life in my hands by saying this but purely technically we now have two very good reversal candles a giant hammer followed by a giant inverted hammer And all the charts remain crazy overextended in all sorts of directions so the only logical call is for Wednesday higher But Lord knows the market has been anything but logical recently All it will take to derail this is one peep out of the Peeple s Bank of Communist China or some inopportune sound bite from a Fed head given that the VIX is still up there in outer space somewhere Either way should make for an interesting session
In closing there is an interesting chart I would like to show you
Now it s interesting to note that if you look at the Dow in 2011 both August and September were truly crummy months But once September was over October took off and we went on a 7 month winning streak If history is any guide this would imply that we have another month of downward pressure before seeing a significant rally into the end of the year Just sayin I grabbed this chart from Morningstar s great website This is their market fair value indicator that tells whether the market as a whole is overbought the red areas or oversold the blue areas Today this indicator hit 0 89 The last time we were at this level following an extended period of being overbought was back on August 4th 2011 Notice the similarities between the situation we have now and what was going on back in 2011 You have an extended period of being overbought after which we hit the break even level then we have a double bottom of oversold conditions followed by a big crash In 2011 we ended up hitting 0 79 on October 4th
Single Stock Trader
Last night Verizon Communications NYSE VZ looked like a good buy And on Tuesday it indeed opened way higher and then continued upwards only to give it all back in the end Leaving us right where we started However the indicators are still way oversold and the stochastic is just microns away from a bullish crossover so I still have to think that this chart has possibilities The fact that support at 40 47 held is encouraging |
VZ | Monthly Bias Lower Thursday Uncertain | The Hoot Actionable ideas for the busy trader delivered daily right up front
Thursday uncertain
ES pivot 1893 75 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ still a swing trade buy
Wednesday morning started out pretty much like a rerun of Tuesday with a big jump upwards followed by a slide back down again But in the middle of the day Dudley Doright came to the rescue with some welcome comments about the possibility of a delay in Fed interest rate rate hikes That sounded the all clear and the Dow began moving higher again Not even the 2 PM margin call stumble could keep it from finishing at session highs As we move on into the home stretch for this crazy month lets look at the charts to see if the bottom is in or what as we ponder Thursday
The technicals
The Dow The double hammer pattern that we ve seen over the past few days one normal and one inverted finally proved to be too much for the bears and on Wednesday the day ended up on a 619 point tear That retraced all of Tuesday s losses plus most of Monday s losses It also confirmed a new bullish stochastic crossover and caused all of the indicators to bottom at oversold They are all now rising nicely Ordinarily I d say we re due for a pause but these are not ordinary times The candle itself is a tall green marubozu and the indicators are all still oversold so I d say this chart now looks technically bullish
The VIX Earth to VIX you re now cleared for reentry On Wednesday the VIX dropped nearly 16 on a lopsided red spinning top its first red candle in 7 sessions Indicators have now all clearly topped and are descending though still overbought We also have a nicely completed bearish crossover so this chart now looks full on bearish
Market index futures Tonight all three futures are marginally higher at 12 21 AM EDT with ES up 0 06 ES had an amazing day on Wednesday rocketing all the way back up to 1938 And that big move still left the indicators oversold They re all rising now and we have a completed bullish crossover So with Tuesday s giant doji star confirmed technically this chart looks continued bullish
ES daily pivot Tonight the ES daily pivot rises again from 1893 75 to 1910 50 That still leaves ES comfortably above its new pivot so this indicator continues bullish
Dollar index On Wednesday the dollar rose nicely with a gap up green hanging man that stopped only at its 200 day MA The indicators are now just off oversold and the stochastic has completed a bullish crossover We ve also exited a descending RTC and that s a bullish setup Now if the dollar can just clear resistance at the MA we re good for more advances on Thursday
Euro The euro meanwhile made it two down in a row following Monday s high of 1 1718 On Wednesday it closed at 1 1352 stopping exactly on its 200 day MA But all of the indicators are now off overbought and descending nicely with a completed bearish stochastic crossover and Wednesday s candle exited a week long rising RTC so that s a bearish set up That means this chart now looks continued bearish
Transportation Finally the trans also had a great day on Wednesday solidly establishing support at 7467 and giving us a tall green marubozu That retraced all of Tuesday s losses and nearly half of Monday s The indicators remain oversold are now rising off the bottom and we have a completed bullish stochastic crossover That all means this chart now looks bullish
OK so here s the problem I m having tonight All the charts are looking technically bullish but with the VIX still over 30 and the futures basically flat in the overnight so far it feels like flipping a coin and having it land on its edge The slightest breeze could make it fall over either way And with the wind gusting from all points of the compass lately this weather owl isn t taking any chances Thursday uncertain Jack
Single Stock Trader
After a crazy exponential run down last week and into Monday VZ moved higher on Tuesday but finished with the disappointing red candle But then it redeemed itself on Wednesday with some nice gains All the indicators have finally bottomed and are moving higher steadily The stochastic in particular now has a nice looking bullish crossover in effect We ve also finally peeled away from the lower BB and it looks like there s still more room to run higher on Thursday |
VZ | With Futures Guiding Down Monday Lower | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 1971 33 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ no longer a swing trade buy
Recap
I called last Friday uncertain and with Dow closing down all of 12 points but the SPX ending up 16 points I think that was about as uncertain as it gets There were some interesting candles though so lets head straight to the charts and see if we can t figure out the last day of August as we bring this miserable month to a close
The technicals
The Dow On Friday the Dow was unable to make any headway at all after two big days of gains It finished with a classic doji star which is at least something of a reversal warning Indicators continue to rise off oversold and the stochastic is now about halfway on its trip from oversold to overbought More importantly perhaps is that on Friday the Dow just barely managed to recover the lower edge of its long running multi year rising RTC which currently stands at 16 630 That would cancel the bearish monthly RTC setup if we can close higher again on Monday So while we do have a reversal warning tonight it s one of those that requires confirmation and with indicators not yet overbought I can t call this one lower yet
The VIX Meanwhile on Friday the VIX continued its re entry into low Earth orbit following its short visit outside the solar system last week It formed a small red candle that looks like a bullish piercing pattern The indicators continue falling off overbought and the stochastic has begun curving around in preparation for a bullish crossover It s not the best reversal indicator but I do think there s a move higher coming in the next few days
Market index futures Tonight all three futures are lower at 1 08 AM EDT with ES down 1 19 On Friday ES put in a perfect doji star sitting right at the top of Thursday s large gains That was enough to send the indicators off of oversold and they are all now rising towards overbought We remain inside the latest rising RTC however the overnight is moving significantly lower and in fact is sitting right on the edge of that RTC This appears to be confirming the doji so I would be looking for a move lower on Monday here
ES daily pivot Tonight the ES daily pivot rises again from 1971 33 to 1983 25 That now puts ES back below its new pivot so this indicator turns bearish
Dollar index Last Friday the dollar defied a gap up gravestone doji from Thursday and continued to move higher gaining an impressive 0 51 as it left its 200 day MA in the dust It s now on a four day winning streak with indicators that still have not hit overbought So in the absence of any bearish reversal signs I can t call the dollar lower on Monday
Euro Last Thursday night I wrote that there s more downside coming here on Friday and that proved to be exactly right as it closed back down to 1 1185 That was also the payoff for the bearish trigger we got on Thursday from Wednesday s exit from the rising RTC Indicators are now all falling off overbought but not yet down to oversold We now have four down in a row and nothing really bullish about these charts However the overnight is showing us a non trivial gain up 0 22 in the new overnight so far so it s possible we have a bottom here since there is some good support at 1 1172
Transportation Finally on Friday the trans handily outperformed the Dow with a 0 53 gain compared to the Dow s 0 07 loss That now gives the trans a three day winning streak and a new rising RTC The indicators also continue rising and are now off of oversold With a bullish stochastic crossover in full effect there s nothing bearish on this chart tonight
Tonight the charts are telling me the market kind of ran out of gas after two big up days last Thursday and Friday With the futures guiding significantly lower I m just going to call Monday lower
Single Stock Trader
Last Thursday night I thought Verizon might have a little bit more upside left to go but that proved to be too optimistic Instead Thursday s hanging man was confirmed with a second reversal warning this one a small doji star The indicators have also stopped rising just short of overbought and the stochastic is flattening in preparation for a bearish crossover That means Verizon is no longer a swing trade buy and in fact may be getting ready to move lower in the next few days |
VZ | Despite New Month Tuesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday lower
ES pivot 1972 08 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
They knocked em lower into the close to end August on a down note It made for some interesting candles so we ll get to them in a moment as we begin a brand new month But first I want to mention something interesting I saw in the Stock Trader s Almanac the DF DM warning not to be confused with KMFDM which is a really awesome industrial band There s something interesting in there which I will discuss at the bottom of this post I encourage you to check it out
The technicals
The Dow Last night we had a reversal warning in the form of a doji star on Friday but I wasn t ready to call it lower just yet because it required confirmation On Monday we got that confirmation in the form of the 115 point decline in the Dow This was also just enough to drop it outside of its latest admittedly short but steep rising RTC and that is a bearish setup The indicators are still short of overbought but with a confirmation of the bearish star this chart looks lower again
The VIX Last night I noted the possibility that the VIX might be ready to move higher in a few days It didn t even take that long as it rose over 9 on Monday confirming Friday s inverted hammer Momentum has now started moving higher again and the stochastic is almost down to oversold levels and preparing for a bullish crossover Monday s action also traded entirely outside the latest descending RTC for a bullish setup So over all this chart looks like it has more upside left for Tuesday
Market index futures Tonight all three futures are lower at 12 26 AM EDT with ES down 1 42 On Monday ES handily confirmed Friday s doji star with a red candle that retraced half of Friday s gains The indicators have now stalled halfway between oversold and overbought and the stochastic is curving around nicely for a bearish crossover I will note too that OBV began falling two days ago With the overnight guiding strongly lower this chart definitely looks lower on Tuesday
ES daily pivot Tonight the ES daily pivot falls again from 1983 25 to 1972 08 ES remains well below that level and so tonight this indicator turns back to bearish
Dollar index On Monday the dollar retraced half of Friday s gains dropping 0 3 on an inverted hammer Indicators are now almost up to overbought and the stochastic is starting to curve around for a bearish crossover This was also just enough to exit the latest rising RTC for a bearish setup So overall this chart looks bearish for Tuesday
Euro Similarly on Monday the euro retraced most of Friday s losses to close right back up to 1 12 for 7 That was also just enough to place it on the edge of its descending RTC for a bullish set up The stochastic is also beginning to curve around for a bullish crossover and the overnight seems to be guiding higher again all of which makes it look like euro will move still higher on Tuesday
Transportation So much for Friday s outperformance On Monday the trans dropped 0 8 It definitely looks now like the trans have run out of gas and their latest rising RTC is over That s a bearish setup Momentum and money flow have already started moving lower though RSI continues to climb slightly The stochastic looks like it s curving around to begin a bearish crossover although it s still not really quite all that over bought But the overall gestalt of this chart is that it looks bearish
Tonight we got a bunch of reversal warnings in the form of RTC exits and those are usually pretty good Add in futures that are guiding non trivially lower and although the first of most months is historically bullish I m afraid I m going to have to call Tuesday lower I ll be happy to be proven wrong
DF DM
In The Stock Trader s Almanac they talk about the DF DM warning that is down Friday down Monday It refers to instances where the Dow closes lower on a given Friday and then again on the following Monday Apparently the average total number of DF DM days in a year going back to 1995 is 10 And it seems that in years that have larger than average DF DM counts the market subsequently moves lower Notable examples include 2001 2002 where this warning hit 13 and 18 respectively and in 2008 when it hit 15 So where does this leave DF DM this year Drum roll please The answer is 9 so far And the year is only two thirds over So it looks like DF DM in 2015 will probably end up above average And that bodes ill for next year Add in the monthly rising RTC exits we ve gotten for the Dow and it ain t looking good folks Just sayin
Single Stock Trader
Last night I said that Verizon Communications Inc NYSE VZ may in fact may be getting ready to move lower in the next few days and that s just what it did on Monday We now have three reversal candles in a row the lopsided spinning top on Monday following a doji star on Friday and a fat spinning top Thursday Monday s candle also fell out of a short but steep rising RTC and the stochastic is flattening out for a bearish crossover So even though the indicators are not yet overbought this one looks like it has more downside risk than upside potential at this point |
VZ | GLOBAL MARKETS U S stocks fall in late sell off dollar gains | Global equities slide on fear of worldwide recession
Dollar retreats after rising to a two year high vs euro
Oil prices fall to 63 a barrel but off 17 month low
Recasts adds U S markets byline changes dateline
previous LONDON
By Herbert Lash
NEW YORK Oct 27 Reuters Risk aversion swept financial
markets on Monday as fears of a global recession bolstered the
dollar and yen while driving equities around the world lower
sending both U S and European stocks to five and a half year
lows
Pessimism about the deteriorating global economic outlook
pushed the price of crude oil to a 17 month low below 62 a
barrel at one point and sent the yen to an almost 13 year peak
against the dollar on risk aversion
Major U S stock indexes closed down more than 2 percent
after a see saw session in which investors cheered the solid
wireless sales at Verizon Communications Inc but then
sold off heavily in another wild session where stock prices
swung violently at the end
Trading was volatile and volume was light in New York with
stocks falling sharply in the last half hour of trading With
just four days left in October the S P 500 is on track for its
worst month ever in the post World War Two period
Hedge funds and mutual funds have been dumping stocks to
raise cash to meet redemptions from their clients traders
noted exacerbating the late day selling
Earlier in Europe shares fell to a five and a half year
closing low following a plunge in Japan that pushed stocks to
26 year closing lows Most other Asian markets also fell
heavily in chaotic trade as investors feared a flurry of
central bank moves would not be enough to stave off a global
recession
It is so negative out there you felt like a skater
without any skates it couldn t stay up said Angel Mata
managing director of listed equity trading Stifel Nicolaus
Capital in Baltimore
People right now are expecting the worst a total collapse
of the hedge fund industry with half of them hedge funds not
existing any more Mom and pops with 401ks are saying I have
had enough and don t want to be in there any more Mata said
The Dow Jones industrial average closed down 203 18
points or 2 42 percent at 8 175 77 The Standard Poor s 500
Index shed 27 85 points or 3 18 percent at 848 92 The
Nasdaq Composite Index slipped 46 13 points or 2 97
percent at 1 505 90
Energy companies led the decline on bets a deep global
slowdown will sap demand for energy ConocoPhillips
shed 5 8 percent to 45 62 as U S crude oil futures
slid
Technology shares also weighed on the broader market with
Microsoft a top drag on Nasdaq after The Wall Street Journal
reported that defaults on tech financings loans that let
companies buy computers software and other products have
spiked this year
Verizon closed up 10 percent at 27 61
The dollar climbed to its strongest level against the euro
in about two and a half years while the yen hovered near
13 year peaks against the dollar The yen also rose to its
highest level since May 2002 versus the single euro zone
currency despite concern by Group of Seven finance officials
about its excessive volatility
Both the dollar and yen have been the biggest beneficiaries
of global capital flows as investors unwind carry trades which
use the low yielding Japanese currency to buy everything from
higher yielding currencies to stocks and commodities
This is a continuation of deleveraging and unwinding of
risk that has been happening the past week and this has
benefited the yen and the dollar said Omer Esiner senior
market analyst at Ruesch International in Washington
The FTSEurofirst 300 index of top European shares
closed down 1 7 percent at 816 04 points the lowest close
since May 2003
The chemicals sector weighed heavily on the benchmark
index with BASF down 10 9 percent Clariant
8 4 percent lower and Wacker Chemie falling 9 7
percent
Fear of a global recession remained high in other markets
too helping push the yield on two year bunds to its
lowest in three years
The price of U S government debt which moves in the
opposite direction of yield was capped by a slight improvement
of sentiment in short term funding markets helped by a Federal
Reserve program to buy commercial paper
But most Treasury debt turned lower
The benchmark 10 year U S Treasury note fell
10 32 in price to yield 3 71 percent The 2 year U S Treasury
note slipped 5 32 in price to yield 1 57 percent
The dollar rose against a basket of major currencies with
the U S Dollar Index up 0 54 percent at 87 023
The euro fell 0 93 percent at 1 2505 while against
the yen the dollar lost 0 99 percent at 93 34
U S light crude for December delivery settled at
63 22 a barrel down 93 cents its lowest settlement price
since May 29 2007 London Brent crude settled down 64
cents to 61 41 a barrel
Oil prices have dropped by nearly 60 percent from a record
high 147 27 a barrel in July as global economic turmoil dents
fuel consumption around the world
Gloom about the world economy has had a greater impact than
a decision by the Organization of Petroleum Exporting Countries
on Friday to chop output by 1 5 million barrels per day
What OPEC did is constructive but right now that is
beside the point said Mike Wittner of Societe Generale
New York gold futures rose as an intraday rebound in the
battered U S stock market provided support to commodities
despite the stronger dollar
The December gold contract settled up 12 60 at
742 90 an ounce in New York
Japan s Nikkei index swung wildly overnight in
Asia before ending down 6 4 percent at its lowest close since
1982 The MSCI index of Asian stocks outside Japan
fell for a fourth consecutive session losing
3 2 percent
Additional reporting by Ellis Mnyandu Gertrude
Chavez Dreyfuss John Parry in New York and Jane Merriman and
Jan Harvey in London and Sarah Marsh and Tyler Sitte in
Frankfurt Editing by Leslie Adler |
VZ | GLOBAL MARKETS World stocks oil tumble as flu fears spread | MSCI world equity index down 0 7 percent at 220 78
Swine flu fears hit risk assets
Oil and euro tumble govt bonds firm
By Natsuko Waki
LONDON April 27 Reuters World stocks tumbled after
seven weeks of gains and oil and the euro fell on Monday as
concerns intensified the spread of swine flu which has killed
more than 100 people in Mexico would hit the global economy
Travel and leisure related stocks sank while the Mexican
peso fell 3 percent against the dollar as the World Health
Organization warned the flu which has spread to the United
States and possibly as far as New Zealand has the potential to
cause a worldwide pandemic
The swine flu seems to be one of those Black Swan events
that has caught the market by surprise This is a concern as to
whether it might impact any potential recovery chances said
Martin Slaney head of derivatives at GFT Global Markets
The MSCI world equity index fell 0 7 percent
The decline comes after the index rose last week posting
seventh weeks of consecutive gains as better than expected
earnings results from some banks and other firms brightened
sentiment
U S stock futures fell 1 7 percent pointing to a weaker
open on Wall Street later Firms reporting first quarter results
included Verizon Communications the No 2 U S phone company
The FTSEurofirst 300 index dropped 1 1 percent while
emerging stocks lost 1 6 percent
In Europe travel and leisure sector stocks fell 3 5 percent
while airlines such as British Airways Air France KLM and
Deutsche Lufthansa dropped up to 13 percent
Drugmakers advanced on hopes for vaccine against the virus
GlaxoSmithKline rose 3 5 percent Its Relenza or zanamivir
product along with Roche s Tamiflu is the recommended drug for
seasonal flu and has been shown to work against viral samples of
the new disease
U S crude oil fell 5 4 percent to 48 78 a barrel
The euro fell 0 9 percent to 1 3132 hit by a rise in risk
aversion while the dollar rose 0 7 percent against a basket of
major currencies The yen rose 0 3 percent to 96 57 per dollar
If the disease proves to be more fatal the dollar would
rally and cross yen would come under pressure BNP Paribas said
in a note to clients
Given the recent green shoots the market would take any
worsening of the outbreak as an obstruction to the global
recovery process
The Mexican peso fell as low as 13 69 per dollar its lowest
in almost three weeks
The June Bund future rose 49 ticks garnering safety seeking
flows
Two year euro zone government bond yields hit their lowest
in almost one month at 1 303 percent after European Central Bank
Governing Council member Nout Wellink was quoted as saying the
central bank should discuss lowering interest rates below 1
percent
Additional reporting by Dominic Lau Editing by Toby Chopra |
VZ | UPDATE 3 Verizon profit falls eyes 8 000 job cuts | Q2 revenue 26 86 bln vs Reuters Estimates 26 85 bln
Q2 EPS ex items 0 63 in line with expectations
To cut 8 000 jobs in second half of 09
To focus on wireline cost cuts next 12 18 months
Verizon shares fall 1 pct
Adds job cut details share move
By Sinead Carew
NEW YORK July 27 Reuters Verizon Communications Inc
posted a lower quarterly profit and said it would cut
8 000 jobs in its wireline business as weakness in wholesale
and corporate segments overshadowed wireless growth
Verizon whose shares fell 1 5 percent on Monday morning
said it would accelerate cost cuts in its landline business
with new layoffs amounting to 3 4 percent of its workforce
totaling 235 000 employees They come on top of 8 000 job cuts
in the last year
Clearly the broader economic issues are affecting the
business Chief Financial Officer John Killian told analysts
on a conference call
The company said that some of the job cuts will affect
contract workers as well as internal employees It did not
break out the split
In addition to short term cost cuts Verizon would also
need to more significantly reduce the wireline cost structure
over the next 12 to 18 months Killian said
Verizon s second quarter results were largely in line with
Wall Street expectations While revenue rose 0 2 percent in its
mass market landline segment including home phones and small
businesses that was offset by declines in the wholesale and
enterprise business
Operating revenue rose 11 percent to 26 86 billion in the
second quarter and compared with the average analyst estimate
of 26 85 billion according to Reuters Estimates
Subscriber growth at Verizon Wireless and its biggest rival
AT T Inc probably means that customers switched from
smaller rivals such as Sprint Nextel Corp and T Mobile
USA owned by Deutsche Telekom said Hudson Square
Research analyst Todd Rethemeier
It s reassuring that both Verizon and AT T had good
postpaid subscriber growth but it s somewhat worrisome for
Sprint and possibly T Mobile USA who have yet to report he
said
Verizon s second quarter profit fell to 3 16 billion or
52 cents per share from 3 4 billion or 66 cents a share in
the same quarter a year earlier
Excluding items such as merger integration and pension
charges profit was 63 cents per share in line with analysts
average estimates according to Reuters Estimates
On Friday Verizon Wireless the biggest U S mobile
service said it added 1 1 million wireless subscribers in the
quarter
AT T Inc said last week that it added 1 4 million net
new customers
Verizon which owns Verizon Wireless with Vodafone Group
Plc said that before merger costs and other items
wireless margins on earnings before interest tax depreciation
and amortization rose 0 7 percent to 46 3 percent
In comparison AT T margins were hurt by hefty costs from
subsidies for Apple Inc s iPhone
Verizon shares fell 50 cents 30 96 on the New York Stock
Exchange
Reporting by Sinead Carew Editing by Derek Caney and Ted
Kerr |
VZ | US STOCKS SNAPSHOT Futures lose ground after Verizon results | NEW YORK July 27 Reuters S P 500 stock index futures
turned negative on Monday following quarterly results from
telecommunications company Verizon Communications Inc a Dow
component
Verizon shares initially jumped 7 percent following the
results but the bounce quickly faded and the stock was near
unchanged
S P 500 futures rose 0 10 points and were above fair
value a formula that evaluates pricing by taking into account
interest rates dividends and time to expiration on the
contract Dow Jones industrial average futures rose 7 points
and Nasdaq 100 futures were up 2 points |
XOM | Exxon says New York AG distorts company s climate data | Exxon Mobil XOM 1 9 says New York Attorney General Schneiderman has wildly distorted how it calculates the long term financial impact of climate change on its assets The AG asserted in court last week that XOM had misled investors revealing significant evidence that the company may have been using two sets of numbers one secret and another for public consumption to calculate the impact of climate change on its oil and gas reserves XOM says Schneiderman s filing was filled with inflammatory reckless and false allegations and that his findings were predetermined the company asks the judge to reject a fresh subpoena in the case Now read |
XOM | Exxon calls NY prosecutor s climate change probe harassment in filing | By Ernest Scheyder and Emily Flitter Reuters Exxon Mobil Corp asked a New York court on Friday to reject another subpoena request from Attorney General Eric Schneiderman arguing the prosecutor s recent claim to have found evidence Exxon misled investors was false and that he was abusing his investigative powers The company said Schneiderman s allegation it had neglected to estimate the impact of future environmental regulation on new deals was frivolous and that no legitimate law enforcement need would be served by giving his office more documents For a prosecutor proceeding in good faith the absence of any evidence of wrongdoing is grounds for closing an investigation not expanding it Exxon wrote in its filing with the court Schneiderman s office denied the allegations As detailed in our filing last week the Attorney General s office has a substantial basis to suspect that Exxon s proxy cost analysis may have been a sham said Amy Spitalnick a spokeswoman for the New York attorney general This office takes potential misrepresentations to investors very seriously and will vigorously seek to enforce this subpoena We look forward to next week s hearing Schneiderman sought more materials from the oil producer as part of an ongoing probe that has already reviewed nearly 3 million documents He is examining whether Exxon misled the public about its understanding of the effects of greenhouse gas emissions on the earth s climate The probe has already revealed Secretary of State Rex Tillerson who until December was chief executive of Exxon used a separate email address and an alias Wayne Tracker to discuss climate change related issues while at the company Testimony Schneiderman made public on June 2 offered more details about how the company handled the Wayne Tracker account which was first created in 2007 Exxon employee Connie Feinstein an information technology manager for the oil company told prosecutors changes in the email program Exxon used along with an automatic process that deleted internal emails after 13 months may have erased years worth of Wayne Tracker emails We realized that the automated file sweeper had not been disabled for a period of time as it should have been Feinstein said in the April 26 interview Exxon has been fighting Schneiderman s requests for information about its climate change policies in both state and federal court claiming it should not have to turn over records because the New York prosecutor s probe is politically motivated
The case is People of the State of New York v PricewaterhouseCoopers and Exxon Mobil Corporation NYSE XOM New York State Supreme Court New York County No 451962 2016 |
XOM | Exxon settles spat with Chad avoids government s 74B fine | Exxon Mobil NYSE XOM reaches a settlement with Chad over tax payments avoiding a 74B the country had imposed The deal also means XOM will be able to keep its exploration permit in the country through 2050 Chad s oil minister says without providing further details XOM began talks with the government in November after Chad s highest court backed a claim from the Finance Ministry that the company had not met its tax obligations Now read |
XOM | Exxon Baytown refinery completes gasoline unit overhaul company | HOUSTON Reuters ExxonMobil Corp N XOM completed a planned overhaul of the second largest gasoline producing unit at the 560 500 barrel per day bpd Baytown Texas refinery a company spokesman said on Monday
Exxon began work on the 90 000 bpd Fluidic Catalytic Cracking Unit 2 in late March sources told Reuters The work was extended to June from the original mid May completion date |
XOM | Qatar closes helium plants 30 owned by Exxon | Qatar the world s second largest helium producer has closed its two helium production plants because of the economic boycott imposed by other Arab states Reuters reports The helium plants operated by a Qatar Petroleum subsidiary were shut after Saudi Arabia closed its border with Qatar blocking overland exports of the gas the subsidiary is 70 owned by QP and Exxon Mobil XOM has 30 Analysts say a diplomatic dispute that lasts a month or more would cause a global shortage and prices doubled the last time that happened Separately QP and Royal Dutch Shell LON RDSa RDS A RDS B signed a framework agreement to develop global liquefied natural gas bunkering facilities Now read |
XOM | Reuters Rosneft partners to invest 8B plus in Russian offshore energy | Rosneft OTC RNFTF and its partners plan to invest 480B rubles 8 4B in developing Russia s offshore energy industry over the next five years part of a bid to boost output from new areas Reuters reports It is not known which partners would be involved in the investments Rosneft has licenses for 55 offshore blocks in Russia s Arctic Far East and southern regions which are believed to contain oil and gas resources Rosneft reportedly plans to return to operations in the Arctic Karat Sea in 2019 but has not specified whether it would work alone or with a partner a deal to work in the Karat Sea with Exxon Mobil XOM 1 5 was suspended in 2014 after sanctions were imposed Rosneft XOM and others are partners in the Sakhalin 1 project off Russia s far east coast and the Russian firm also has deals for offshore work with Norway s Statoil OL STL STO 2 2 Italy s Eni E 0 9 and others Now read |
CSCO | Ubiquiti Plunges 25 On SEC Probe Into Business Practices | Ubiquiti Networks Inc NASDAQ UBNT stunned its shareholders yesterday with the news that the company and some of the company s executives have been subpoenaed by the U S Securities and Exchange Commission SEC The wireless equipment player s shares slipped more than 25 as investors abandoned the stock in droves following the probe into its business and accounting practices Of late Ubiquiti s shares have been volatile and lost 16 over the past six months This is in stark contrast to its which has rallied 16 7 on an average during the same time frame The SEC ProbeAccording to a regulatory filing dated Feb 13 the agency has issued subpoenas to Ubiquiti and a few of its officers requesting documents and information relating to a range of topics including metrics relating to the Ubiquiti Community accounting practices financial information auditors international trade practices and relationships with distributors and various other third parties Several securities litigation firms which include Kaplan Fox Kilsheimer LLP Glancy Prongay Murray LLP Holzer Holzer LLC and Block Leviton LLP have launched investigations on behalf of Ubiquiti s shareholders related to the company and its officers possible violations of federal securities laws Per a spokesperson Ubiquiti is in the process of responding to SEC s requests and intends to cooperate fully with the agency What It Means for UbiquitiThe subpoenas mark the second setback for Ubiquiti s shares this month coming on the heels of a tough quarterly report earlier in February In all fairness the subpoenas don t automatically mean that Ubiquiti is in the wrong It is not clear what led the SEC to take this action However what s disturbing is that less than six months ago Citron Research had charged the company of fraud and questioned the integrity of distributors high margins corporate culture and cash balances The company s CEO Robert Pera vehemently denied these allegations Investors will just have to wait and see what the reason behind the SEC probe actually is The Other SetbackOn Feb 8 shares of Ubiquiti tumbled 14 in response to mixed fiscal second quarter results The company s earnings missed estimates by 6 2 putting an end to its three quarter earnings beat streak Ubiquiti s quarterly results suffered from gross margin headwinds as strong demand for core networking portfolio was eclipsed by 18 6 million booked as provisions for obsolete inventory vendor deposits and losses on purchase commitments The losses on purchase commitments resulted from weak sales of the new FrontRow wearable cameras Also investors were disappointed with the outlook which seemed weak considering that demand for several of the company s new product offerings continues to grow Ubiquiti clearly faces an uphill battle in persuading investors that things are going to be fine for the company in the near future Ubiquiti has a Zacks Rank 3 Hold and competes with players like Cisco Systems Inc NASDAQ CSCO the Aruba arm of Hewlett Packard Enterprise Company NYSE HPE Brocade Communications Systems Inc and Huawei You can see Today s Stocks from Zacks Hottest StrategiesIt s hard to believe even for us at Zacks But while the market gained 18 8 from 2016 Q1 2017 our top stock picking screens have returned 157 0 128 0 97 8 94 7 and 90 2 respectively And this outperformance has not just been a recent phenomenon Over the years it has been remarkably consistent From 2000 Q1 2017 the composite yearly average gain for these strategies has beaten the market more than 11X over Maybe even more remarkable is the fact that we re willing to share their latest stocks with you without cost or obligation |
XOM | Day Nine Oil DRIP And ERY | On April 11 we got our rock solid never fail signal to short the oil market Since then every single trading day nine consecutive as of this writing have been black candlesticks in spite of an insane mega rally going on with other assets
I think it was redvettes who brought my attention to the fact that besides the triple bearish fund ERY a favorite of mine which I ve written about often there was also a fund called DRIP which had broader coverage less focused on mega caps like Exxon NYSE XOM I was wondering if I was making a mistake sticking with ERY but as the overlay below shows they re pretty much the same creature and ERY s volume is about twice as good so I think I m just going to stick to that instrument |
VZ | Monday Lower Monthly Outlook Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 2101 00 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader NYSE VZ not a swing trade buy
Recap
Last Friday held true to historical form as the Dow dropped 56 points after two nice days of gains That comes at an interesting juncture as we begin a new month so lets head straight to the charts to see what they have to say about Monday
The technicals
The Dow For the third day in a row the Dow was stymied by the 200 day MA last Friday After two failed attempts to break through it just gave up and moved lower That confirmed Thursday s dragonfly doji and curved the stochastic around to prepare for a bearish crossover With a candle that closed right on the edge of a short rising RTC this chart now looks more bearish than not for Monday
The VIX After a confirmed bearish evening star last week that sent the VIX scurrying back below its 200 day MA on Friday we got a small doji star that after four days of declines signals a reversal warning That s supported by a descending RTC exit for a bullish setup And the stochastic is curving around for a bullish crossover so I d say the VIX is going higher any day now
Market index futures Tonight all three futures are lower at 12 18 AM EDT with ES Dow 0 11 Last Friday ES gave us a second reversal warning in a row with a lopsided spinning top following a hanging man With indicators nearly overbought and the futures not doing much of anything in the overnight I d be cautious about going long at this point
ES daily pivot Tonight the ES daily pivot rises again from 2098 58 to 2101 00 That now places ES back below its new pivot for the first time in several days so this indicator turns back to bearish
Dollar index On Friday the dollar put in perhaps the tallest gravestone doji I ve ever seen battling its way back from early losses to finish essentially unchanged But with the indicators caught halfway between oversold and overbought and what looks like a bearish evening star complete once again this chart is too tough to call
Euro And similarly I couldn t get a good read on the euro last Thursday night but looking at the crazy gravestone doji we got who can blame me A big attempted move higher was soundly rejected and the indicators continue falling towards oversold so if anything I d guess the next move is lower on Monday
Transportation The trans also lost ground last Friday confirming Thursday s hanging man with a 0 33 fall that curved the stochastic around to prepare for a bearish crossover After bouncing off their upper BB on Wednesday the trans were unable to make any further headway That all looks like lower on Monday to me
Accuracy
Month right wrong no call conditional batting Dow average pointsJanuary 8 6 4 1 0 563 627February 6 4 5 3 0 692 183 March 7 6 5 4 0 647 976 April 3 8 7 0 0 273 1 May 6 5 5 2 0 615 581 June 8 6 3 4 0 706 552 July 10 1 5 4 0 938 1212
And the winner is
The first day of most months is historically bullish but August is not one of those And we now have the Dow failing to make any headway for three days in a row suggesting a decided absence of buyers at the 200 day MA as we enter the dog days of summer And tonight we ve got a number of reversal signs on the charts Add it all up and I figure I m going to call Monday lower I ll be happy to be proven wrong since I m always net long
Single Stock Trader
VZ was one of the Dow stocks moving higher on Friday but it did it on a tall inverted hammer the second reversal warning in a row With indicators now near overbought this is definitely not a buy point |
VZ | Tuesday Lower Oil Tanks ES Down 0 07 | The Hoot Actionable ideas for the busy trader delivered daily right up front
Tuesday lower
ES pivot 2091 17 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader NYSE VZ not a swing trade buy
Recap
As expected Monday moved lower to start off August in pretty typical fashion Not much to see here so we turn our attention right towards Tuesday
The technicals
The Dow Three strikes and yer out After failing to retake the 200 day MA three days running the Dow finally gave up the ghost on Monday and fell out of its rising RTC for a bearish setup on a red hammerish thing and a stochastic ever so close to a bearish crossover Net net I don t think the selling s over
The VIX Last night I wrote that I d say the VIX is going higher Any Day Now And we didn t have long to wait as the VIX rose 3 63 on Monday to complete a bullish morning star It also bent the stochastic around nicely to just short of a bullish crossover Oh and despite a red spinning top it was also an exit of the descending RTC for a bullish crossover So all in all I d again have to say there s more upside left here
Market index futures Tonight all three futures are lower at 1 13 AM EDT with ES down 0 07 Last night I wrote that I d be cautious about going long at this point Good thing too because ES fell right back to 2091 on Monday on a tall lopsided red spinning top The overnight is continuing lower thus forming a bearish stochastic crossover meaning that there s still nothing bullish about this chart
ES daily pivot Tonight the ES daily pivot falls again from 2101 00 to 2091 17 Tonight ES remains below its new pivot though not by much But that still leaves this indicator bearish for the time being
Dollar index I refused to call the dollar last night but Monday s gap up spinning top provided some clarity with a completed morning star Indicators are not yet overbought so all other things being equal it looks like there s more upside left here
Euro Last night I wrote that I d guess the next move is lower on Monday Good guess too with the euro right back down to 1 0954 It was a classic dark cloud cover and the overnight is continuing lower The stochastic has begun curving around for a bullish crossover but we re not there yet Looks like there s at least one more day lower in store before the reversal
Transportation The trans are now range bound unable to make any headway past 8428 but not dropping much lower either Indicators have now hit overbought and we have a spinning top but that requires confirmation So until I get it I still can t call this chart
Accuracy
Month right wrong no call conditional batting Dow average pointsJanuary 8 6 4 1 0 563 627February 6 4 5 3 0 692 183 March 7 6 5 4 0 647 976 April 3 8 7 0 0 273 1 May 6 5 5 2 0 615 581 June 8 6 3 4 0 706 552 July 10 1 5 4 0 938 1212 August 1 0 0 0 1 000 92
And the winner is
Tonight looks a lot like last night with a bunch of bearish technical signs on the charts I also note that oil is back in positive correlation with the market and oil is tanking And Dr Copper has been feeling ill for some time now Therefore it appears that the logical course of action is to call Tuesday lower again
Single Stock Trader
Despite two reversal candles in a row VZ did not move lower on Monday instead posting a small gain on yes another reversal candle this one a large red hammer Either way nothing here suggests a good entry point so we let it pass once again |
VZ | Wednesday Depends On ES Pivot | The Hoot Actionable ideas for the busy trader delivered daily right up front
Wednesday higher only if ES breaks above its pivot else lower
ES pivot 2086 92 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader NYSE VZ not a swing trade buy
Recap
Ja ja the market was looking saggy last night and sure enough down it went some more on Tuesday With Greece and China apparently now out of the way the technicals seem to be working again so lets capitalize on that and see whither Wednesday
The technicals
The Dow On Tuesday the Dow gave up another 48 points on a lopsided spinning top to give us three black crows This was the payoff on Monday s bearish RTC trigger It also confirmed a bearish stochastic crossover and with the indicators still a long ways from oversold we re now in full blown bearish mode here
The VIX Ah El Vixmo Last night I wrote that there s more upside left here And sure enough on Tuesday the VIX rose another 3 5 This gave us a bullish trigger on a descending RTC exit as well as a bullish stochastic crossover So there s nothing but bullish signs on this chart right now
Market index futures Tonight all three futures are higher at 12 25 AM EDT with ES up 0 16 On Tuesday ES just kept on falling to yield three black crows a completed bearish stochastic crossover and a steep new descending RTC No bullish reversal signs on this chart for sure
ES daily pivot Tonight the ES daily pivot falls again from 2091 17 to 2086 92 That still leaves ES under the new pivot but only by a fraction of a point close enough in fact that it s a wash at this point
Dollar index Whoa The dollar was doing exactly nothing until 1 25 PM EDT when it suddenly took off the end with a 0 42 gain and its highest close since July 20th This tall green marubozu was the mother of all bullish engulfing patterns However it was also enough to send the stochastic around in preparation for a bearish crossover And since we re now just short of month long resistance I d say further upside is limited from here Wednesday might be a doji day
Euro Last night I wrote that it l ooks like there s at least one more day lower in store before the reversal And in fact the euro did fall again back to 1 0897 easily giving up support at 1 0915 in the process That now leaves it oversold and with a stochastic curving around for a bullish crossover The overnight is continuing lower though so the best I can say is that a move higher is coming before the end of the week but it may not be Wednesday
Transportation In what would ordinarily seem to be a bit of bullish divergence the trans rose 0 12 on a day the rest of the market was lower However Tuesday s candle was stopped by resistance at 5 8427 just like the last four days And with indicators now highly overbought along with a new bearish stochastic crossover it looks to me like the trans are headed lower on Wednesday
Accuracy
Month right wrong no call conditional batting Dow average pointsJanuary 8 6 4 1 0 563 627February 6 4 5 3 0 692 183 March 7 6 5 4 0 647 976 April 3 8 7 0 0 273 1 May 6 5 5 2 0 615 581 June 8 6 3 4 0 706 552 July 10 1 5 4 0 938 1212 August 2 0 0 0 1 000 140
And the winner is
Tonight the charts overall are still looking pretty bearish Ordinarily I d just go ahead and call Wednesday lower but I always hate to go against the futures On the other hand the futures alone aren t enough to make a bullish call But the proximity of ES to its pivot makes this a good opportunity for a conditional call if ES can break above its new pivot and stay there by mid morning Wednesday we ll close higher But if it remains below or falls further we close lower
Single Stock Trader
I guess third time s the charm After three reversal candles in a row VZ finally gave up the ghost on Tuesday down 0 64 And that stopped right on the edge of its latest rising RTC We ll call it a bearish setup And the stochastic is perched on the cusp of a bearish crossover the two lines are only 0 01 apart So it looks like the selling still has some more to go |
VZ | Tuesday Depends On ES Pivot | The Hoot Actionable ideas for the busy trader delivered daily right up front
Tuesday higher only if ES stays above its pivot else lower
ES pivot 2090 92 Breaking above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ not a swing trade buy
Recap
Yup I figured Monday was looking higher last night and the technicals did not disappoint with a nice 242 point pop for the Dow I m the first to admit when I m wrong so I might as well take credit when I m right But that was then and this is now And tomorrow is Tuesday So lets see what the charts predict after this interesting day
The technicals
The Dow On Monday the Dow had its best day since May with a jolly green 1 39 marubozu that blew it right out of its descending RTC for a bullish setup sent the indicators starting higher off oversold and formed a sharp bullish stochastic crossover Technically this looks nothing but bullish
The VIX Last night I noted that the VIX was getting ready to reverse and it sure did down 8 66 on Monday on a big gap down red marubozu that sent the indicators lower before ever hitting overbought and formed a good bearish stochastic crossover Now there s still strong year long support around 11 95 but that still leaves some room to run lower before hitting that on Tuesday
Market index futures Tonight all three futures are lower at 1 05 AM EDT with ES down 0 40 ES had its best day in a month on Monday handily confirming Friday s hammer sending the indicators higher off oversold completing a nice bullish stochastic crossover and exiting the descending RTC for a big bullish setup That all looks strong except that we re real close to resistance at 2104 So we need to see how ES deals with that level
ES daily pivot Tonight the ES daily pivot rises from 2072 75 to 2090 92 That leaves ES sitting right on top of the new pivot so this indicator is indecisive
Dollar index After days of wishy washy indecision last night I wrote that I can finally make a call here for a move lower on Monday And that call paid off with a 0 43 decline in the dollar to trade entirely outside its recent rising RTC for a bearish trigger With indicators now falling off overbought and a solidly completed bearish stochastic crossover there seems to be lots of room to run lower still here
Euro Last night I wrote that this one looks bullish for Monday and indeed the euro rose again to close at 1 1024 in a move that sent the indicators overbought The stochastic is still rising though but the new overnight seems to be losing steam so we could be in for a pause here on Tuesday
Transportation On Monday the trans did a bit better than the Dow with a bullish one white soldier good for a nearly 1 5 advance That drove the indicators right off oversold and sent the stochastic curving around to prepare for a bullish crossover So it looks like there s plenty of gas in this tank for further gains
Accuracy
Month right wrong no call conditional batting Dow average pointsJanuary 8 6 4 1 0 563 627February 6 4 5 3 0 692 183 March 7 6 5 4 0 647 976 April 3 8 7 0 0 273 1 May 6 5 5 2 0 615 581 June 8 6 3 4 0 706 552 July 10 1 5 4 0 938 1212August 4 1 0 1 0 800 503
And the winner is
Tonight the charts are generally bullish technically following last Friday s bottoming action Whether the reversal can be sustained is another issue particularly given the non trivial losses in the futures apparently triggered by news of a currency devaluation by the Chicoms What pin action this will have on Tuesday is unclear But with ES currently sitting exactly on top of its pivot that s a perfect opportunity for another conditional call if ES breaks above its pivot and stays there by mid morning Tuesday we close higher But if it breaks lower and stays there by mid morning we close lower Simple as that
Single Stock Trader
VZ got swept up in the general euphoria on Monday with its best day since March It wasn t looking that way on its own merits though so I couldn t call it higher that way last night But everything I wrote about the Dow tonight holds true for VZ too Except that we re now nearly overbought and I m afraid this might be a case of running too far too fast So Tuesday could be a pause here and therefore I m not calling it a buy This is a pop we just missed |
VZ | Wednesday Lower As ES Falls Again | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday lower
ES pivot 2084 08 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ not a swing trade buy
Recap
You d think OMG Chicom devaluation Auto sell sell sell But it s not that simple ES actually spent most of the wee hours Tuesday morning just noodling about its pivot Until about 7 15 it looked like there was a chance the damage had already been done with the decline right after the announcement Monday night But no ES gave up the ghost at that point and the market closed lower That s what my conditional call TM is all about When it works it works well
So lets wander on to Wednesday and see what Mr Market will make of all this
The technicals
The Dow On Tuesday the Dow gave up almost all of Monday s gains on a tall inside harami admittedly not the best reversal candle But it was enough to short circuit all the developing positive technicals from Monday and put the Dow right back into its descending RTC So this chart in one day turns right back to bearish
The VIX You can basically forget all the technical forecasts I made last night as they were all torpedoed by the Chicoms Case in point the VIX which did not go down at all vaulting up over 12 instead on a gap up lopsided spinning top Interestingly it did not surpass the peak hit all of two days ago when we had our last crisis du jour But it was enough to send the indicators almost overbought and amazingly even cause a bearish stochastic crossover So with this yawning gap now below us I d say the next move looks lower
Market index futures Tonight all three futures are significantly lower at 12 45 AM EDT with ES down 0 67 apparently on more currency finagling by the Chicoms On Tuesday ES also gave up most of Monday s gains on a wide dark cloud cover But with two essentially new driven candles back to back I d take the current setup with a grain of salt I m more interested in the overnight gains being posted here
ES daily pivot Tonight the ES daily pivot falls again from 2090 92 to 2084 08 But the sharp move lower in the overnight now leaves ES well below the new pivot so this indicator now looks quite bearish
Dollar index And with the Chicom devaluation of course the dollar rose up 0 14 on a bullish piercing pattern But indicators are not yet oversold and the stochastic continues falling so this one requires confirmation before calling it higher on Wednesday
Euro And as another consequence it was one of those rare days when both the euro and dollar rose the euro in this case touching its upper BB before retreating to close higher at 1 1035 on a long legged spinning top But the new overnight isn t confirming it moving higher still So despite now being overbought I can t call the euro lower yet
Transportation Interestingly the trans relatively outperformed the Dow down only half as much on Tuesday in a move that actually bent the stochastic around in anticipation of a bullish crossover It s a stubby spinning top though so at this point we need to wait a day and see where this chart sorts out
There s really not much bullish about the charts tonight but the kicker is that it looks like deja vu all over again as the Chicoms once again tinker with their currency And the drop in the futures is even bigger tonight than last And since we all know how that one turned out I m just going to go ahead and call Wednesday lower
Single Stock Trader
On a mostly down day VZ was one of few winners on the Dow putting in a gap up bearish gravestone doji that hit its upper BB Now that s definitely not the buy setup I m looking for so we just continue waiting here |
VZ | Thursday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2072 00 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Well that was odd Apparently after the obligatory mass dump right out the gate due to the latest Chinese cataclysm just like on Tuesday on Wednesday Mr Market instead figured out he d been had and then spent the rest of the day marching back to break even The net result after all the strum und drang was a loss for the Dow of all of 0 33 points Okey dokey So moving right along let s turn our attention to Thursday
The technicals
The Dow Holy moly on Wednesday the Dow put in the biggest dragonfly doji I ve ever seen one that broke well below the lower BB and also out the left side of the descending RTC Indicators remain just off oversold so candlestick wise this has to be bullish
The VIX And on Wednesday the VIX gapped up at the open right above its 200 day MA It then motored higher only to give it all up in the end to finish with a 0 73 loss on a tall dark cloud cover and a bearish stochastic crossover That looks continued bearish to me
Market index futures Tonight all three futures are higher at 12 54 AM EDT with ES up 0 20 Like the other charts ES put in a dramatic dragonfly doji on Wednesday puncturing both its lower BB and then its 200 day MA before bouncing back That left the indicators not surprisingly somewhat confused But with a nice bump in the new overnight we re starting to see something of a morning star pattern so this chart is now looking bullish to me
ES daily pivot Tonight the ES daily pivot falls again from 2084 08 to 2072 00 That now leaves ES well above its new pivot so this indicator turns back to bullish
Dollar index Wow on Wednesday the dollar took its biggest gap down since uh well I don t know I scrolled back a year and couldn t find anything near this big The resulting doji star sitting below the lower BB for a 1 07 loss is a good 2 3 of a bullish morning star And with indicators now oversold I d say the dollar goes higher on Thursday
Euro Last night I hesitated calling the euro lower in the face of a star and good thing too because the euro kept right on rallying Wednesday with a big gain to close at 1 1174 well above its upper BB That left the indicators highly overbought and the stochastic starting to curve around for a bearish crossover So far the overnight is confirming that with modest losses So with the BB hit I have to think the euro may be headed lower on Thursday
Transportation And finally on Wednesday the Trans put in a monster hammer It didn t quite hit the lower BB but it did form a clear bullish stochastic crossover With nothing else of note here this chart now looks bullish
We got a number of extreme reversal candles in the charts on Wednesday and the futures are guiding higher so I m just going to call Thursday higher
Single Stock Trader
Crazy stuff here After what looked like a slam dunk bearish evening star on Tuesday instead on Wednesday Verizon NYSE VZ went higher some more on the mother of all bullish engulfing patterns I don t care The indicators are now overbought and this still isn t the entry pattern I m looking for |
VZ | Monday Uncertain Besides Futures Charts Bullish | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday uncertain
ES pivot 2084 58 Holding above is bullish
Rest of week bias higher technically
Monthly outlook bias lower
Single stock trader NYSE VZ not a swing trade buy
Recap
So last Friday the day I took off not much happened The Dow rose 69 points on sub average volume and an even smaller range than Thursday Will we see some action this week With another op ex Friday coming up lets see where the charts are guiding us
The technicals
The Dow On Friday the Dow gave us a doji star sitting on top of Thursday s gains This was non confirmed by Friday s further advances and that s a positive sign as it marks a bullish trigger on a descending RTC exit So at this point I see nothing bearish on this chart
The VIX Last I wrote about the VIX I said it looked continued bearish And that continued not only on Thursday but Friday too as it lost another 4 89 for a bearish trigger on a rising RTC exit With a completed bearish stochastic crossover and descending indicators I see nothing bullish on this chart
Market index futures Tonight all three futures are mixed at 1 37 AM EDT with ES down 0 05 but NQ up just a tick Relatively speaking ES had the best day of any of the charts last Friday with a big bullish engulfing pattern that continued the indicators moving higher towards overbought There s no nearby resistance but the Sunday overnight is stalling out so that s raising the caution flag for Monday
ES daily pivot Tonight the ES daily pivot falls again from 2082 25 to 2084 58 That still leaves us above the new pivot so this indicator continues bullish
Dollar index Like the other charts on Friday the dollar exited a descending RTC for a bullish setup It also curved the stochastic around to close in on bullish crossover Add in a hit on the lower BB and oversold indicators and after many days of wishy washy indecision tonight this chart looks all around bullish
Euro Meanwhile the euro really looks like it has topped in the short term after two red days with a close at 1 1124 on Friday That makes two red spinning top reversal warnings in a row a bearish stochastic crossover and overbought indicators The overnight is continuing non trivially lower so it s looking like the euro closes lower again on Monday
Transportation Finally on Friday we got another reversal this one with a bullish setup on a descending RTC exit for the trans rising indicators plus a bullish stochastic crossover and a confirmation of Thursday s spinning top So that all looks bullish for Monday
Tonight all the charts are looking pretty bullish The one exception is the news from the futures I d expect some better pin action considering just how positive the charts look The problem may lie with oil which lately has been quite positively correlated with the market and tonight oil is continuing lower So with that kind of conflict at hand I m afraid I m just going to have to call Monday uncertain as we kick off op ex week
Single Stock Trader
All I had to say about VZ last Thursday night was Looking toppy Definitely not a swing buy here And that was correct as VZ just continued lower on Friday And tonight it s still not looking like a buy |
VZ | Tuesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2091 50 Holding above is bullish
Rest of week bias higher technically
Monthly outlook bias lower
Single stock trader VZ still not a swing trade buy
Recap
All the signs were looking positive last night but I guess I just got spooked by some falling oil and lack of enthusiasm from ES all of which made me call Monday uncertain Turns out the Dow rose yet again making it now four in a row and even doing a bit better than Friday Ah but where does that leave Tuesday Off to the charts we go in search of clues
The technicals
The Dow Well the Dow did exhibit some indecision on Monday as it plunged right out the gate but after the first five minutes it was all uphill into the close That keeps us in a nice rising RTC with all indicators rising but not yet overbought On the other hand we now have a tall hanging man so that s at least a reversal warning
The VIX Whoa this was really odd On Monday the VIX rose 1 48 It s unusual enough for it to move in correlation with the market but it did it on a tall red marubozu dark cloud cover And that was enough to keep it inside its descending RTC and keep the indicators falling towards oversold So this chart still looks bearish That was definitely a strange one
Market index futures Tonight all three futures are again mixed at 12 45 AM EDT with ES up just 0 02 and YM dead even After a rocky open ES ended up doing quite well on Monday powering right back to resistance at 2100 That leaves a new rising RTC in effect and indicators also continue to rise but are not yet overbought If ES can clear resistance here it looks like smooth sailing all the way to the upper BB at 2112 The currently developing overnight candle isn t looking so hot though as an inverted hammer
ES daily pivot Tonight the ES daily pivot rises again from 2084 58 to 2091 50 ES remains above its new pivot so this indicator continues bullish
Dollar index Last night I wrote that this chart looks all around bullish Well the dollar wasn t a raging bull perhaps but it did gain another 0 29 Monday to exit its descending RTC for a bullish setup That also caused the indicators to clearly bottom at oversold and gave us a new bullish stochastic crossover so this chart looks bullish again
Euro And last night I also wrote that it s looking like the euro closes lower again on Monday And that was looking good with the euro falling back to 1 1085 to make it three down in a row and a new descending RTC Even at that indicators remain overbought and we have a new completed stochastic crossover so I don t think the selling is done here yet The overnight is continuing lower supporting that idea
Transportation And in quite a bullish sign on Monday the Trans outperformed the Dow with a 0 73 gain that exited the descending RTC for a bullish trigger and sent the indicators continuing higher on their way towards overbought So there s also nothing bearish on this chart for Tuesday
Well things are looking generally positive tonight so I m going to go ahead and call Tuesday higher though more because of an absence of bearish signs than any strong conviction in the current mini rally I note that the Dow has been putting in lower highs since May now and Monday s high lies right along that descending line I guess we ll see
Single Stock Trader
Verizon NYSE VZ was one of the weaker members of the Dow on Monday but nonetheless managed to pull off a green bullish piercing pattern However the indicators remain overbought we have a new bearish stochastic crossover and a bearish trigger on a rising RTC exit so I m afraid all that trumps the candle Still no buy here |
XOM | Exxon says Qatar LNG production exports not affected by Arab tensions | Exxon Mobil XOM 1 3 says its production and exports of liquefied natural gas from Qatar have not been affected by rising diplomatic tensions in the Middle East that have seen several countries cut ties with the country Commodities traders have grown concerned that Qatar s LNG could be barred from Saudi Arabia or from traversing Egypt s Suez Canal Maersk OTCPK AMKAF OTCPK AMKBY the world s biggest container shipping line says it is no longer able to transport goods in or out of Qatar Qatar and XOM have maintained development agreements for more than a decade and the company has said that a large portion of its Qatari LNG production is under long term supply contracts meaning it must supply gas from Qatar or some other source Now read |
XOM | Moody s ups Exxon outlook to stable affirms Aaa rating | Exxon Mobil s NYSE XOM Aaa rating is affirmed by Moody s with a stable outlook reflects the agency s expectation that XOM s credit metrics will significantly improve through 2019 from 2016 s cyclically low levels Substantial operating cost reductions and more efficient capital spending have restored XOM s ability to fund the capital reinvestment necessary to maintain its industry leading business profile and generate free cash flow even in this much lower oil price environment Moody s says Moody s also expects XOM s debt levels to decline modestly over the next few years as free cash flow combined with asset sales more than offset acquisitions Now read |
XOM | Buy rated Exxon seen reaching 90 at Hilliard Lyons | Exxon Mobil NYSE XOM is initiated with a Long term Buy rating and 90 price target at Hilliard Lyons which believes a reduced cost structure two recent acquisitions and a more aggressive pace of capital spending position the company for a positive shift in reserves and production growth and a multiyear recovery in earnings XOM s dividend yield is 50 above the 10 year average but growth averaging 3 2 over the past two years is 60 below the norm for that span and Lyons thinks that with improving coverage ratios dividend growth could be poised for a rebound in the intermediate term Shares have been flirting with annual lows lately but the firm notes it is early in the commodity recovery cycle and anticipates valuation multiples will continue to improve into 2018 Now read |
CSCO | Opening Bell Dollar Rises Treasurys Fall Yen Soars CPI On Tap | All major US index in longest winning streak since January
VIX still high havens rise signaling investors still jittery
All eyes on CPI
Complex analysis suggests high volatility whatever the CPI report
Euro disdains best GDP performance in a decade
WTI falls under 59
Key Events
Yesterday a synchronized decline in yields and the US dollar for a third straight day supported a mirror image from equities a third consecutive advance by US stocks as investors count the minutes till this morning s release of the US CPI inflation report
All four major US indices the S P 500 Dow NASDAQ Composite and Russell 2000 advanced posting their longest winning streak since January
The S P 500 climbed 0 26 percent led by a 0 73 percent bump higher in Real Estate Energy and Materials were the only two sectors in the red losing 0 39 percent and 0 25 percent respectively
Energy stocks were pulled down by seven days of declines in the price of oil within eight days while the drop in Materials shares may have been led by traders cashing in after the sector s outperformance during Tuesday s session
Falling Treasury yields slowed the migration of funds out of an erratic equity market into more secure higher yielding assets while the weakening dollar simply makes dollar based assets proportionately cheaper
However the known fundamental driver of the equity selloff was the sudden realization by investors that rates may go higher and at a faster pace than anticipated upsetting complex intermarket and highly leveraged derivative positions and forcing hedge funds to liquidate dumping more supply all at once than can be handled by demand
The sudden shift in outlook follows the recent employment report that average hourly earnings rose 2 9 percent YoY not only more quickly than anticipated but also at the fastest rate since 2009 Higher wages increase the likelihood that corporates will raise the prices of their goods and services to cover these costs which in turn spurs inflation Whereupon the Fed would increase rates to avert the risk that inflation gets out of hand which ultimately pushes up the cost of borrowing whose unprecedented affordability has pushed equity prices to record highs
It thus comes as no surprise that today s CPI reading is likely to be the most watched in a long time Investors will look for further inflationary signals that could warrant a faster pace of interest rates hikes or for clues that the previous CPI reading represented an anomaly
Economists forecast that core CPI excluding volatile food and energy prices climbed 1 7 percent YoY in January compared with 1 8 percent in December However from another point of view inflation may have grown a 0 2 percent MoM rise in the same indicator as economists forecast would result in a three month annualized rate of 2 3 percent according to analysts at Wells Fargo Securities That would mark the fastest pace since February 2017
However the calculation is more complex In order to extrapolate inflation projections from CPI data investors must analyze different aspects of the report including the unexpected increase in some particular components of the previous monthly report such as medical goods and cars Then they must adjust figures to the assumption that companies tend to hike prices in the beginning of the year as they test consumer demand Finally they need to gauge variations in how data is tracked and whether they have an impact on the projection and how
After they get through the other side of this labyrinth they need to formulate an intelligent trading plan according to the potentially changed economic environment As we have already experienced the market narrative on economic figures can change from the time data is released morphing in the following days and even weeks Therefore regardless of what the report actually reveals there s a good chance that knee jerk reactions buyer and seller remorse and investors navigating through the maze of figures will result in considerable volatility
Meanwhile institutions have raised their stakes in Treasury futures to a record signaling an expectation that the current bond selloff is not quite over yet with some 10 year yields will rise to 3 5 percent in the next six months and pricing in a yet steeper pace of Fed tightening
Global Financial Affairs
This morning global stocks extended their rebound from the worst two week selloff in two years with Asian markets taking the lead The MSCI Asia Pacific Index benefited from surges in Chinese shares listed both on the mainland s Shanghai Composite and on Hong Kong s Hang Seng Index as well as gains in South Korea s KOSPI and Australia s S P ASX 200 Index
Japan was the only key market to post a retreat with shares losing ground both on the TOPIX and the Nikkei 225
However declines in the influential Japanese benchmarks were not linked to the recent global selloff but rather to a local situation the yen soared to a 15 month high hurting exports and rendering yen denominated shares more expensive via the exchange rate thus pushing both indices to near 4 month lows
Stocks in Europe climbed after Germany s GDP rose 0 6 percent in the fourth quarter as its economy expanded 2 9 percent annually The report backed the European Commission s claim that the region s expansion is the most balanced since the financial crisis and the IMF s improved global outlook for the year The region registered its best performance in ten years in 2017 signaling the ECB could soon proceed to reduce its balance sheet
Curiously the eurozone s strongly upbeat growth figures did not boost the single currency which kept falling
Possibly that s because US Treasury yields started climbing again
The dollar on the other hand is on the rise paring a daily loss as it crossed above a downtrend line since Monday
Ironically despite a third day of advances for stocks safe haven assets continued to gain traction As mentioned above the yen is set for its strongest close since November 2016 when the dollar fell prior to President Donald Trump becoming the market s savior
The Swiss franc and gold are up Does this signal that investors don t trust equities yet or are these safe haven categories simply rising on a falling dollar Treasury yields normally an indicator for risk aversion do not currently apply as buying Treasuries generally a bearish indicator for stocks are now a bullish indicator as they unwind the very cause of the selloff
South Africa rand climbed as the nation awaited President Jacob Zuma s response to his party s request that he resign As mentioned yesterday the USD ZAR pair appears to have completed a bearish Rising Flag and is falling on the good news
On Friday JP Morgan Chase sent a note to clients calling the creation of a Bitcoin ETF a that could become a gamechanger It would provide easier access to the cryptocurrency a liquid market and added integrity since it would be traded through brokerage accounts that carry insurance via SIPC
WTI crude oil fell below 59 even on a weaker dollar extending the worst weekly performance for the commodity in two years on the prospect of rising US supplies
Up Ahead
Eurostat will update its estimate for fourth quarter growth in the euro area at 11am in Luxembourg It reported a 0 6 percent increase in GDP on January 30
Lunar new year celebrations for the Year of the Dog begin affecting business hours in China Hong Kong Taiwan Singapore Malaysia and Indonesia Chinese mainland markets are closed February 15 21
The US core consumer price index is expected to have increased at an annual 1 7 percent pace in January according to economists project Retail sales also out Wednesday probably increased for a fifth straight month
Earnings
Cisco Systems NASDAQ CSCO expected to report corporate results after market close for the fiscal quarter ending January is forecasted to post a 0 53 EPS versus 0 53 YoY
TripAdvisor NASDAQ TRIP scheduled to release earnings after market close for the fiscal quarter ending December expected to have a 0 04 EPS vs 0 05 for the same quarter last year
SunPower Corporation NASDAQ SPWR will report earnings after market close for the fiscal quarter ending December The forecast is a 0 09 EPS versus 0 73 year over year
Market Moves
Stocks
The STOXX Europe 600 Index increased 0 9 percent as of 9 05 a m London time
UK s FTSE 100 climbed 0 7 percent
Germany s DAX Index gained 0 9 percent
S P 500 Futures rose 0 5 percent
The MSCI Asia Pacific Index rose 0 3 percent
TOPIX index fell 0 8 percent Hong Kong s Hang Seng Index gained 2 5 percent the KOSPI rose 1 1 percent and Australia s S P ASX 200 Index fell 0 3 percent
Currencies
The Dollar Index is down 0 15 percent paring an earlier 0 4 dip A close at this level would form a hammer and a potential for a H S bottom
The euro climbed 0 1 percent to 1 2361
The British pound fell less than 0 05 percent to 1 3888
The Japanese yen gained 0 3 percent to 107 47 per dollar the strongest in 15 months
South Africa s rand jumped 1 percent to 11 8503 per dollar the strongest in almost three years
Bonds
The yield on US 10 year Treasuries fell less than one basis point to 2 83 percent
Germany s 10 year yield declined two basis points to 0 74 percent
UK 10 year yield dipped one basis point to 1 618 percent
Japan s 10 Year yield decreased one basis point to 0 07 percent the lowest in more than five weeks
Commodities
West Texas Intermediate crude dipped 0 6 percent to 58 81 a barrel the lowest in almost eight weeks
Gold rose 0 1 percent to 1 331 14 an ounce |
CSCO | ETFs To Buy As Cisco Returns To Revenue Growth In 2 Years | After the closing bell on Wednesday one of the tech primes Cisco Systems NASDAQ CSCO continued its strong momentum in the tech space with better than expected fiscal second quarter results The networking giant topped estimates on both revenues and earnings and posted its first revenue growth in two years see Additionally it provided an upbeat outlook and boosted its dividend and share buyback program suggesting the company s turnaround story Results in DetailEarnings of 63 cents per share outpaced the Zacks Consensus Estimate by four cents and improved 11 from the year ago earnings Revenues rose 3 year over year to 11 9 billion and edged past the estimated 11 82 billion With revenue growth Cisco broke its eight consecutive quarters of decline read The networking leader s transition from its traditional business of high end switches and routers to high growth areas such as security the Internet of Things and cloud computing is now paying off As a result Cisco now expects revenues growth of 3 5 in the fiscal third quarter and earnings per share in the range of 64 66 cents the lower end is well above the Zacks Consensus Estimate of 62 cents Further Cisco plans to bring back 67 billion or 57 billion after taxes overseas cash to United States in the fiscal third quarter as a result of a new tax legislation and expects to spend much of this newly repatriated cash on share buybacks and dividends The company raised its quarterly dividend by 14 to 33 cents per share and buyback authorization program by 25 billion to 31 billion Given solid results and a bullish outlook Cisco shares surged as much as 6 to 44 61 in after hours trading on heavy volumes Per the FactSet data it represents the closing for the stock since Dec 15 2000 Currently Cisco has a Zacks Rank 3 Hold and a VGM Style Score of D However it belongs to a bottom ranked industry ETFs to WatchETFs having the largest allocation to this network giant will be in focus over the coming days Investors should closely monitor the movement in these funds and grab the opportunity when it arises read iShares North American Tech Multimedia Networking ETF SNX IGN This ETF provides a concentrated exposure to domestic multimedia networking securities by tracking the S P North American Technology Multimedia Networking Index Holding 25 securities in its basket Cisco takes the top spot with an 8 9 allocation The product has accumulated 50 2 million in its asset base while sees a lower volume of around 9 000 shares a day Expense ratio comes in at 0 48 The fund carries a Zacks ETF Rank 3 with a High risk outlook First Trust NASDAQ Technology Dividend Index Fund This fund provides exposure to the dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index The product has amassed about 825 5 million in its asset base and trades in moderate volume of about 68 000 shares per day The ETF charges 50 bps in annual fees and holds about 94 securities in its basket Of these firms CSCO occupies the top position making up roughly 8 8 of the assets In terms of industrial exposure the fund allocates more than one fourth portion in semiconductor and semiconductor equipment followed by software 15 1 technology hardware storage peripherals 12 8 diversified telecom services 11 5 and communications equipment 10 3 read First Trust Nasdaq Cybersecurity ETF This ETF follows the Nasdaq CTA Cybersecurity Index which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors It has accumulated 412 million in its asset base The fund charges 60 bps in annual fees and trades in an average daily volume of about 1 million shares In total the product holds 33 stocks in its basket with Cisco taking the top spot at 6 9 It is skewed toward the software industry at 53 4 while communications equipment rounds off the next spot at 20 6 of assets PowerShares Dynamic Networking Portfolio This fund follows the Dynamic Networking Intellidex Index holding 30 securities in its basket Out of these Cisco is the second firm accounting for 5 5 share From a sector look communications equipment accounts for 40 of the portfolio followed by 36 in software and programming The fund is relatively unpopular and illiquid in the broad tech space with AUM of 50 4 million and average daily volume of about 7 000 shares It charges 63 bps in annual fees and has a Zacks ETF Rank 2 Buy with a High risk outlook Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
CSCO | Cisco Pops On Earnings As New Rising Phase Starts | Cisco Systems Inc NASDAQ CSCO rose as high as 45 43 in pre market trading an increase of 7 9 The company reported earnings per share of 0 63 and total revenue of 11 89 billion beating expectations of 0 59 and 11 81 billion respectively
The company s performance was driven to an extent by sales in the infrastructure platforms category which includes data centers as well as guidance that exceeded analyst estimates CSCO is on a tear posting a gain 48 off it s low of 30 67 from six months ago One has to return to the dot com era to see it trading at its current levels
Looking at the chart below CSCO is clearly in a powerful cycle pattern taking only a couple weeks off during the declining phase of its previous market cycle Our near term projection is 48 The market cycles on the chart below are designated by the black semicircles at the bottom of the chart
Visit our for more on market cycles watch the every Friday afternoon or subscribe to our channel |
XOM | Statoil s Trestakk PDO Approved By Norwegian Authorities | Statoil OL STL ASA NYSE STO recently declared that the Trestakk discovery has received approval from the Norwegian authorities for the Plan for Development and Operation PDO Located on the Halten Bank in the Norwegian Sea the Trestakk discovery was found in 1986 The discovery is estimated to involve investments of NOK 5 5 billion nearly 50 of the initial estimate The original estimates for developing Trestakk were about NOK 10 billion At the time of concept choice in Jan 2016 the costs had been lowered to NOK 7 billion Based on further improvements and concept adjustments leading to investment decision the costs were lowered to NOK 5 5 billion On Nov 1 2016 Statoil submitted the PDO to the minister of petroleum and energy on behalf of the license owners Trestakk is expected to hold recoverable volumes of 76 million barrels of oil equivalent mainly oil Tied into the sgard A production vessel the discovery is anticipated to come online in 2019 Statoil and its partners now expect to recover much more oil than originally estimated The field development includes a subsea template and a tied in satellite well Three production wells and two gas injection wells will be drilled Cost reductions have been attained by an innovative approach to concept choice simplification and optimized scope along with benefitting from on going efficiency measures Statoil operates the Trestakk discovery with 59 1 interest Other partners are ExxonMobil Corp NYSE XOM and Eni SpA TO E holding 33 and 7 9 respectively Investor confidence on the Statoil stock is reflected in its price chart Shares of the company gained 2 1 in the last six months while the Zacks categorized industry registered an increase of 1 7 in the same time span Currently Statoil carries a Zacks Rank 2 Buy Investors interested in the space can also consider Bellatrix Exploration Ltd TO BXE which sports a Zacks Rank 1 Strong Buy You can see Bellatrix Exploration posted a positive earnings surprise of 240 00 in the preceding quarter It beat estimates in three of the four trailing quarters with an average positive earnings surprise of 58 54 Zacks Hidden TradesWhile we share many recommendations and ideas with the public certain moves are hidden from everyone but selected members of our portfolio services Would you like to peek behind the curtain today and view them Starting now for the next month I invite you to follow all Zacks private buys and sells in real time from value to momentum from stocks under 10 to ETF to option movers from insider trades to companies that are about to report positive earnings surprises we ve called them with 80 accuracy You can even look inside portfolios so exclusive that they are normally closed to new investors |
XOM | Shell RDS A To Divest Hong Kong LPG Business For 150M | Anglo Dutch oil giant Royal Dutch Shell LON RDSa PLC recently signed a deal to divest its liquefied petroleum gas business in Hong Kong and Macau to oil and LPG supplier DCC Energy Ltd which is a subsidiary of DCC plc For Shell the deal is part of portfolio optimization strategy and the 30 billion divestment program for 2016 2018
Deal Highlights
Per the deal Shell will offload its interest in the LPG business in Hong Kong and Macau which it had been operating for 60 years The business supplies infrastructure to fulfill the energy needs of more than 100 000 households
As part of the divestment deal Shell will enter into a long term brand license agreement with DCC to ensure that the Shell brand remains visible across the LPG business in Hong Kong and Macau
The deal is valued at 150 million and is expected to close in the first quarter of 2018 subject to certain regulatory consents and operating license approvals
Post the execution of the deal the local LPG employees of Shell would become part of DCC Energy
How will the Deal Benefit Shell
The deal takes the 30 billion divestment plans of Shell past the two thirds mark The company sold 5 billion worth assets last year This year the company divested more than 15 billion worth of assets The deal provides the company some uplift in its drive to lower debt following the acquisition of BG Group for 47 billion The acquisition is expected to reduce the company s cost enhance cash flow and return to capital
The move is also in sync with the company s strategy to upgrade and streamline its portfolio as Shell seeks to boost its upstream footprint The company wants to concentrate on the downstream activities only on the areas which can reap huge profits for the company
How Will the Deal Benefit DCC Energy
The acquisition is in line with DCC Energy s intention to create a strong and substantial presence in the global LPG market This is the company s first acquisition outside Europe and gives it a platform for development in the LPG market in Asia It will help in enhancing the company s relationship with Shell and provide with a strong foothold in Macau and Hong Kong
It is expected that the acquisition of Shell s LPG business which supplied about 74 000 tonnes of LPG to its customers last year will help to drive revenues of DCC This will create sustainable growth opportunities and value for stakeholders The company expects the ownership of Shell s LPG Business to deliver an annual operating profit of 15 million pounds approximately
The purchase of the Shell business is the latest in a series of acquisitions by DCC Earlier this year the company acquired a chain of Norwegian petrol stations from Exxon Mobil Corporation NYSE XOM
Zacks Rank Key Pick
Headquartered in Netherlands Shell is one of the largest integrated energy companies and is engaged in production refining distribution and marketing of oil and natural gas
The company underperformed the Zacks categorized industry over the prior one year During the aforesaid period shares of Shell rallied almost 6 5 while the broader industry gained around 9
Shell also has a dismal earnings surprise history The company posted negative earnings surprise in three of the four trailing quarters with the average negative earnings surprise being 18 9
The company currently carries a Zacks Rank 4 Sell
A better ranked player in the same industry is Eni SpA TO E which carries a Zacks Rank 2 Buy You can see
Eni is expected to generate a year over year growth of 762 in its earnings in 2017
Zacks Hidden Trades
While we share many recommendations and ideas with the public certain moves are hidden from everyone but selected members of our portfolio services Would you like to peek behind the curtain today and view them
Starting now for the next month I invite you to follow all Zacks private buys and sells in real time from value to momentum from stocks under 10 to ETF to option movers from insider trades to companies that are about to report positive earnings surprises we ve called them with 80 accuracy You can even look inside portfolios so exclusive that they are normally closed to new investors |
VZ | Tuesday Depends On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher only if ES remains above its pivot else lower
ES pivot 2121 58 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ not a swing trade buy
Recap
Though the charts were looking generally bearish last night I opted not to make that call going with a conditional call instead Good thing too as ES made one brief failed attempt to break below its pivot at 10 05 AM and that was it Despite a late afternoon sell off the Dow still managed a 14 point gain So let s see where that all leaves us for Tuesday now
The technicals
The Dow On Monday the Dow actually tried to break above Friday s highs but in the end failed So while we did get a green candle it was a spinning top clinging to the lower end of Friday s candle This failure to break resistance along with a reversal warning and highly overbought indicators continues to make me think this chart looks lower
The VIX I figured we were due for a move higher but wasn t sure it would be Monday Well it was but with a 2 51 advance as a small doji star it wasn t very convincing Still indicators remain highly oversold and the stochastic is lying flat on the floor And with Monday giving us a bullish setup on a descending RTC exit I still have to think there s more upside to come Oh and it was one of those unusual days when both the VIX and the market closed higher indicative of some ongoing internal uncertainty
Market index futures Tonight the futures are mixed at 12 58 AM EDT with S P 500 up 0 02 but YM down 0 03 On Monday ES pushed past resistance at 2118 only to stop again at resistance at 2122 But its rising RTC is so steep this move led it right out of the channel for a bearish setup Indicators remain at extreme overbought and the overnight is guiding lower It s definitely looking toppy to me here
ES daily pivot Tonight the ES daily pivot rises again from 2117 17 to 2121 58 That still leaves ES above its new pivot but tonight it s just barely So this indicator remains ever so slightly bullish for now
Dollar index I wasn t ready to call the dollar lower last night and good thing too because ti rose another 0 18 on Monday That only made it more overbought and left it just shy of its upper BB Bottom line we re in the same spot as last night looks toppy but I can t call it lower just yet
Euro The euro gapped down with a small doji star on Monday to close at 1 0837 as it continues to dribble down it slower BB and remain in a steep descending RTC Support at 1 0871 is now long gone but Monday s close is another support line so with indicators now very oversold this would be as good a time as any for the euro to stage a rally
Transportation Last night I wrote that this inverted hammer looks bearish to me And sure enough the Trans dropped 0 36 on Monday with a second inverted hammer Indicators remain overbought and the bearish stochastic crossover is holding so I don t think the selling is over yet
Looks like deja vu all over again here All the factors that were in play last night are still there only more so The market still looks overbought and toppy but I still can t yet definitively call it lower And once again ES is sitting just above its pivot so I guess I ll just make another conditional call if ES an stay above its pivot by mid morning Tuesday we ll close higher If it breaks under then we close lower
Single Stock Trader
Wow Verizon NYSE VZ sure fooled me on Monday with a nice 1 gain But this one took it to its upper BB and left the indicators even more overbought I know it sounds like tape fighting but I still can t get on board this bus |
VZ | Wednesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday lower
ES pivot 2115 42 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ not a swing trade buy
Recap
This has been an ah choo market for a while now It looks like it wants to sneeze but it just keeps going ah ah ah but never choo Well we finally got the choo on Tuesday with the Dow dumping 181 points It was definitely looking toppy last night but it had been looking toppy for a while now and it just refused to break Now that we ve finally got it let s see how that changes the picture for Wednesday
The technicals
The Dow After warning of impending doom for four straight days now we finally go the break on Tuesday with a 1 dump in the Dow Monday was the bearish RTC trigger and Tuesday was the payoff But even after all that the indicators are still oversold and with a nicely completed bearish stochastic crossover I say there s still more selling in store on Wednesday
The VIX Meanwhile the VIX continues to confound On Monday it was higher on a day the market was higher on Tuesday it went lower on a day the market was lower Most bizarre Just looking at the candles though we now have a tall inverted hammer following an even taller doji star but with indicators that remain highly oversold Go figure RTC wise it s a bullish trigger but everything s all bollixed up so no call here
Market index futures Tonight all three futures are significantly lower at 1 14 AM EDT with ES down 0 39 Last night I wrote that ES definitely looking toppy to me here as it fell out of a rising RTC for a bearish setup And the fall from the top came Tuesday with a big red hanging man and a bearish RTC trigger And with the new overnight gapping down even further this one is looking just plain ugly for Wednesday
ES daily pivot Tonight the ES daily finally falls for the first time in a while from 2121 56 to 2115 42 That leaves ES well below its new pivot so this indicator turns decidedly bearish
Dollar index After watching the dollar throw off topping warnings for days now I was reluctant to call it lower for Tuesday Too bad too because it fell 0 75 for its biggest daily loss in a month That s a clear exit of the rising RTC for a bearish setup and a fresh bearish stochastic crossover So this one now looks lower again on Wednesday
Euro Last night in the face of a long running downtrend I wrote that this would be as good a time as any for the euro to stage a rally And hey presto it did right back up to 1 0950 on Tuesday erasing two days of losses in one swell foop with a giant green marubozu and its biggest gain in a month That leaves us with a fresh bullish stochastic crossover and indicators that are still oversold so this one just looks higher again on Wednesday
Transportation And finally more confusion as the Trans gained 0 74 on a day the Dow was down for some nice bullish divergence There s no real trend here aside from up down up and mostly higher highs and higher lows Going by that and with overbought indicators you d guess the next move would be lower
On Tuesday we got the confirmat5ion of all the topping signals the market s been showing for several days now So with the charts all looking pretty bad I m going to go ahead and call Wednesday lower
Single Stock Trader
I ve been down on Verizon NYSE VZ for days now and on Tuesday I was finally vindicated as it dove a dramatic 2 35 on some negative news with a perfect gap down doji star But that still leaves the indicators overbought though they ve now started lower So this is a reversal warning but I need confirmation before jumping in |
VZ | Market Index Futures Moving Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2107 42 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader NYSE VZ not a swing trade buy
Recap
The markets moved lower Wednesday as I expected Now we re left to figure out when the selling will end for the next move higher And only the charts can tell us that so let s take a gander
The technicals
The Dow On Wednesday the Dow lost 0 38 on a stubby red hammer That left the indicators just barely off overbought and the stochastic moving lower This really isn t a reversal sign so I can t call the Dow higher from here
The VIX This is the third time in a week the VIX has moved in positive correlation with the market I don t think I ve ever seen that Wednesday gave us a 0 82 loss on a bearish engulfing pattern But the indicators remain quite oversold and the stochastic has completed a bullish crossover So with the candles and charts in opposition there s no call here tonight
Market index futures Tonight all three futures are higher at 12 15 AM EDT with ES up 0 19 On Wednesday ES put n a classic gap down doji star And despite indicators falling off overbought the overnight is gapping back up again in a bullish morning star pattern That makes this chart now look bullish for Thursday
ES daily pivot Tonight the ES daily pivot falls again from 2115 42 to 2107 42 But this time that was enough to bring ES backi above its new pivot so this indicator now changes back to bullish
Dollar Index Sigh once again he dollar fooled me on Wednesday by rising 0 31 instead of falling as I thought The resulting candle is indeterminate and the indicators continue moving lower off overbought It s also a bearish trigger on the recent rising RTC exit so I have to think there s more downside coming despite Wednesday s gains
Euro And the euro on Wednesday was pretty much the mirror image of the dollar down to 1 0912 on a stubby red spinning top but with rising indicators just off oversold The new overnight though is gapping higher non trivially so it s possible the euro could move higher on Thursday
Transportation The trans continued its up down pattern on Wednesday with a 0 30 loss on a red hanging man at the top of Tuesday s candle Indicators are now moving lower so if anything this suggests continued movement lower on Thursday
It s not completely clear and the charts are a bit ambivalent tonight but the one chart that does look unequivocally bullish is the futures now forming a morning star and I always hate going against the futures without a good reason So I guess that just leaves a call of Thursday higher
Single Stock Trader
It s good I didn t commit to the tempting gap down doji star in Tuesday s chart because VZ just sank another 1 11 on Wednesday this time with a hammer that just tickled the lower BB That s also a reversal indicator but with indicators still only recently off overbought it s still not the ideal buy setup so once again I wait for confirmation before getting in |
VZ | Monday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday uncertain
ES pivot 2083 75 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Huh I ll admit I was nervous last week when I called Friday lower because I ve seen it fairly often lately that the market will take a completely unexpected reversal from where you d think it will be going But that wasn t the case this time and the Dow dropped another 163 points on Friday That was an interesting move as we shall examine entering the final week of July
The technicals
The Dow Breaking the 200 day MA as the Dow did last Thursday is never a good sign and Friday was the proof with another triple digit loss That makes it four significant ones down in a row on a real steep descending RTC We are in fact now within striking distance of the lower BB at 17 429 and while RSI is now quite oversold the stochastic has yet to curve around for a bullish crossover so I m not calling the Dow higher yet
The VIX Last Thursday I wrote that this one looks higher again Friday And that looked about right with another 8 7 gain for the VIX though on an inverted hammer But indicators are only half way to overbought so it s still too early to call this chart lower
Market index futures Tonight all three futures are slightly higher at 1 53 AM EDT with ES up just 0 04 Last week s losses just accelerated on Friday with ES right back down to 2077 50 But that was finally enough to send the indicators quite oversold though money flow and OBV are now in a consistent week long downtrend and the stochastic has yet to being curving around for a bullish crossover Now it is true that ES is forming a small star in the overnight so far but it s still early so I still can t call ES higher on Monday
ES daily pivot Tonight the ES daily pivot falls again from 2101 25 to 2083 75 That still leaves ES substantially below its new pivot so this indicator continues bearish
Dollar index The dollar looked too confusing for me last Thursday And after Friday s candle I m still confused A scant 0 12 gain on a tall red almost marubozu candle And despite a gain the indicators continued lower So now I m going to guess there s more downside in store on Monday
Euro The euro looked similarly opaque last Thursday and it s just as well since it put in a perfect doji star on Friday ending right where it began The new Sunday overnight is guiding lower though and nearing the right edge of the rising RTC And with indicators near overbought I d say the next move is more likely lower than higher
Transportation Last Thursday I wrote there s nothing bullish about this chart And I d say a 0 67 loss on Friday was definitely not bullish Indicators continue falling and no reversal sign in sight so I can t call the Trans higher yet
And the winner is
We wrung a lot of froth out of the market last week and that drove the SPX Hi Lo indicator very low near levels from which reversals come The same is true of the charts we re close to but not quite at reversal points In fact it s looking to me like Monday might be a doji day with a hammer or perhaps a star At this point I m hesitant to call it lower again just because it looks like the selling could be about exhausted so I will content myself with calling Monday uncertain
Single Stock Trader
It s good I stayed away from Verizon NYSE VZ last Friday because it got caught up in the general market malaise right back down to its lower BB on a red marubozu We re now nearing a turning point but not quite there so no buy just yet |
VZ | With Decent Reversal Signs On Charts Calling Tuesday Higher | The Hoot Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2067 25 Holding above is bullish
Rest of week bias higher technically
Monthly outlook bias lower
Single stock trader NYSE VZ very near a swing trade buy
Recap
Last night I wouldn t commit to continue lower because I thought the selling was about over I was wrong It was looking good for some sort of doji early on but then the selling just kicked back in as the Dow posted yet another triple digit loss It seems that China is now the new Greece Serves em right for sending us all that deadly drywall toxic toothpaste and poison pet food
Is this sell off ever going to end Lets check the charts to see
The technicals
The Dow On Monday the Dow just picked up right back where it left off on Friday with more selling this time very nearly down to its lower BB It was enough to drive RSI down to 1 97 The last time we were lower than this was November 15th 2012 And that very day set off a year and a half long rally This is simply ridiculously oversold Also the stochastic hit its lowest level of the year on Monday and is curving around nicely for a bullish crossover
The VIX On Monday the VIX took a monster gap up 13 54 pop to vault right over its 200 day MA but did it with a perfect doji thus giving us a classic evening star in the making Indicators are also now extremely overbought RSI 92 87 so I m laying better than even odds that the VIX goes lower Tuesday
Market index futures Tonight all three futures are higher at 12 48 AM EDT with ES up 0 44 ES just kept falling on Monday and that drove the indicators extremely oversold RSI 8 The overnight rally so far is bending the stochastic around very close to a bullish crossover Right now this chart is looking bullish and ready to reverse
ES daily pivot Tonight the ES daily pivot falls again from 2083 75 to 2067 25 And that plus an overnight rally was finally enough to put ES back above its pivot so this indicator now turns bullish for the first time in a while
Dollar index The dollar continued its week long slide on Monday with a gap down 0 76 loss on a lop sided spinning top Indicators are now oversold but the stochastic hasn t begun its curve around for a bullish crossover So there s a reversal warning here but one that requires confirmation
Euro And similarly the euro on Monday continued its week long rally closing this time at 1 1083 Indicators are now overbought and the euro is giving up some of Monday s gains in the overnight That s causing the stochastic to bend around for a bearish crossover so I d say chances are good the euro goes lower on Tuesday
Transportation The trans also went lower on Monday but formed a nice doji star below Friday s action thus setting up a bullish morning star Indicators are now oversold and the stochastic is primed for a bullish crossover so a reversal looks like a good possibility here
Accuracy
Month right wrong no call conditional batting Dow average pointsJanuary 8 6 4 1 0 563 627February 6 4 5 3 0 692 183 March 7 6 5 4 0 647 976 April 3 8 7 0 0 273 1 May 6 5 5 2 0 615 581 June 8 6 3 4 0 706 552 July 8 1 4 2 0 909 966
And the winner is
We re now seeing a number of decent reversal signs on the charts finally And we ve got some extremely oversold conditions with the Dow in particular at multi year RSI lows Also the SPX Hi Lo indicator hit 8 47 on Monday its lowest level of the year and below levels from which rallies usually start Finally the futures are up non trivially in the overnight All in all I think there are enough factors in alignment to warrant calling Tuesday higher
Single Stock Trader
VZ hit YTD support on Monday with a red spinning top as it remains in a steep descending RTC Indicators are now rather oversold and the stochastic is curving around nicely for a bullish crossover This one looks real close to a buy now All we need now is some confirmation on Tuesday Right now I m fairly confident this one is going higher on Tuesday |
VZ | Wednesday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday uncertain
ES pivot 2079 25 Holding above is bullish
Rest of week bias higher technically
Monthly outlook bias lower
Single stock trader VZ very near a swing trade buy
Recap
Ah Turnaround Tuesday to the rescue as the Dow finally snapped an ugly six session losing streak in style with a nice 190 point pop Thanks to the Fed the Chinese whoever doesn t matter The bottom line is that the technicals worked Now we move on to Wednesday but we ll cut to the chase right here this Wednesday is a Fed day and it is my policy to always call Fed days uncertain
The technicals
The Dow The Dow s 190 point pop on Tuesday was enough to bounce it right out of its descending RTC for a bullish setup and finally give us a long awaited bullish stochastic crossover And with indicators still oversold this chart looks bullish
The VIX On Tuesday the VIX nicely completed its bearish evening star with a big 13 85 plunge completely giving up the 200 day MA on a tall red candle Indicators remain overbought and the stochastic is within inches of a bearish crossover so this chart looks lower to me Wednesday
Market index futures Tonight all three futures are lower at 12 10 AM EDT with ES down 0 12 On Tuesday ES did very well retracing all of Monday s losses plus half of last Friday s That was also enough to solidly complete a bullish stochastic crossover So I have to think this chart remains bullish though the sag in the overnight suggests we could be in for a pause on Wednesday
ES daily pivot Tonight the ES daily pivot rises again from 2067 25 to 2079 25 Despite overnight weakness so far ES remains above its new pivot so this indicator continues bullish
Dollar index On Tuesday the dollar continued its stair step decline by actually rising 0 27 but remaining in a two week downtrend That may be about to end though because the indicators are now oversold and the stochastic has finally begun to curve around for a bullish crossover all while indicators are still oversold
Euro Last night I wrote that chances are good the euro goes lower on Tuesday And so they were with the euro falling back to 1 1049 on an almost dark cloud cover red marubozu That was enough to curve around the stochastic which is now real close to a bearish crossover The overnight is trying to rally but the daily trend seems more to suggest continued lower
Transportation The Trans had a huge day Tuesday erasing thee days of losses in one swell foop sending the indicators off oversold and forming a new bullish stochastic crossover We re actually near resistance now but there s still some room to run and in any case there s no bearish signs on this chart right now
Accuracy
And the winner is
As a matter of policy I am calling Wednesday uncertain Although someone on CNBC made the interesting point that on Fed days lacking a press conference as this one is the market is down 90 of the time And so far anyway the futures action seem to be supporting that but it s really all just going to come down to whatever Auntie Janet has to say
Single Stock Trader
Last night I was thinking Verizon NYSE VZ was near a swing buy and on Tuesday it did post a small six cent gain but on an odd red hammer Still we remain quite oversold and right on the edge of the descending RTC and two hammers are better than one so basically nothing s changed We re near a buy but I can t quite bless it just yet |
VZ | Thursday Depends On ES Pivot | The Hoot
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
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 |
XOM | New York AG alleges Exxon misled investors on climate | Exxon Mobil NYSE XOM may have misled investors about how it accounts for the impact of climate change on its operations by using internal estimates that differed from its public statements New York s attorney general asserts in court papers reported by WSJ Disclosing for the first time some of the specific evidence collected in its probe of the company AG Eric Schneiderman says he found documents showing that XOM s process for estimating the potential future costs of greenhouse gas regulations on its business may be a sham The AG office made the claims in a filing in New York state court seeking to compel XOM to release additional documents and produce witnesses for the investigation which began in 2015 Now read |
XOM | New York prosecutor says Exxon misled investors on climate change | By Emily Flitter NEW YORK Reuters New York s top prosecutor on Friday accused Exxon Mobil NYSE XOM of misleading investors about how it accounts for climate change risks court filings show offering a rare look inside an ongoing fraud investigation as it pressed the company to turn over more documents Attorney General Eric Schneiderman said in a court filing he had evidence of potential materially false and misleading statements by Exxon that could have led investors to think the U S oil giant company properly assessed the risks when it actually ignored a formula to estimate the impact of future environmental regulation on new deals Schneiderman s filing came a day after President Donald Trump announced plans to withdraw the United States from the Paris climate accord in which nearly 200 countries pledged to lower their greenhouse gas emissions to try to slow global warming World leaders and many U S executives condemned the decision ExxonMobil s external statements have accurately described its use of a proxy cost of carbon and the documents produced to the Attorney General make this fact unmistakably clear said Exxon spokesman Scott Silvestri We will respond fully to the Attorney General s inaccurate and irresponsible allegations about proxy cost in our court filings MAY BE A SHAM Schneiderman s filing focused on the method Exxon used to give its investors estimates of the regulatory cost of greenhouse gas emissions on new projects The company frequently showed investors a number it called a proxy cost for greenhouse gasses as a way to assure them it was accounting for potential changes to government policy that would make producing and burning fossil fuels more expensive The exercise described to investors may be a sham Schneiderman wrote because Exxon may not have actually applied it when estimating profits and losses on its investments Exxon s own documents suggest that if Exxon had applied the proxy cost it promised to shareholders at least one substantial oil sands project may have projected a financial loss rather than a profit over the course of the project s original timeline Schneiderman wrote The New York prosecutor is not the only authority examining Exxon s climate related statements to investors Exxon said on Sept 20 the U S Securities and Exchange Commission was investigating how it valued its oil and gas reserves in the wake of low prices and potential curbs on carbon emissions UNUSUAL TRANSPARENCY Exxon has been fighting Schneiderman s requests for information about its climate change policies in both state and federal court claiming it should not have to turn over records because the New York prosecutor s probe is politically motivated and abusive to the company Its resistance has created a highly unusual condition State and federal prosecutors normally only reveal their findings once they ve completed the process and are ready to file charges But Exxon s attempts to fight Schneiderman s subpoenas it even sued Schneiderman and Massachusetts Attorney General Maura Healey who is also probing the company in federal court have led Schneiderman to use evidence he s uncovered so far to argue his case for why Exxon should be forced to hand over more documents Exxon has already turned over 2 million documents as part of the investigation leading to the discovery that Secretary of State Rex Tillerson who until December was chief executive of Exxon used a separate email address and an alias Wayne Tracker to discuss climate change related issues while at the company Schneiderman is seeking records he says Exxon has been withholding as well the ability to interview Exxon employees who might know about Exxon s internal climate change discussions On May 23 a New York State appeals court ruled Exxon should turn over records Schneiderman was requesting
Exxon shares were down 1 5 percent Friday at 79 49 Crude prices fell on worries Trump s decision to withdraw from the global climate accord could ultimately result in an overabundance of oil production |
XOM | Exxon acquires exploration Aareage in Equatorial Guinea | Exxon Mobil XOM 0 9 signs a production sharing contract with the government of Equatorial Guinea for an deepwater block the energy and mining minster calls the jewel among the group of prospective blocks it plans to sign this year XOM will be the operator of the EG 11 block with an 80 stake and says the contract includes a commitment to acquire new and reprocess existing 3 D seismic data XOM already operates the Zafiro Field the largest oil producing field in Equatorial Guinea Now read |
CSCO | Why Cisco Systems CSCO Might Surprise This Earnings Season | Investors are always looking for stocks that are poised to beat at earnings season and Cisco Systems Inc NASDAQ CSCO may be one such company The firm has earnings coming up pretty soon and events are shaping up quite nicely for their report That is because Cisco Systems is seeing favorable earnings estimate revision activity as of late which is generally a precursor to an earnings beat After all analysts raising estimates right before earnings with the most up to date information possible is a pretty good indicator of some favorable trends underneath the surface for CSCO in this report In fact the Most Accurate Estimate for the current quarter is currently at 60 cents per share for CSCO compared to a broader Zacks Consensus Estimate of 59 cents per share This suggests that analysts have very recently bumped up their estimates for CSCO giving the stock a Zacks Earnings ESP of 0 59 heading into earnings season Cisco Systems Inc Price and EPS Surprise Why is this Important A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises and outperforming the market Our recent 10 year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank 3 Hold or better show a positive surprise nearly 70 of the time and have returned over 28 on average in annual returns see more Given that CSCO has a Zacks Rank 3 and an ESP in positive territory investors might want to consider this stock ahead of earnings You can see Clearly recent earnings estimate revisions suggest that good things are ahead for Cisco Systems and that a beat might be in the cards for the upcoming report The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
XOM | Energy Stocks Preparing For A Bounce | 2016 was a good year for Energy Stocks as oil and gas price rose significantly helping to recover from the drop that started since 2014 However since the recent peak early this year Oil price stabilised in a tight range and failed to move higher before the recent 9 drop last week in both Brent Crude and West Texas Intermediate
Related stocks that established a bullish reversal last year extended their correction lower but is pointing to an important areas where a bounce higher can be seen in the near term The coming move will be also supported by an that will help these stocks to find a floor for the recent decline
Energy Stocks Elliott Wave ViewCVR Energy Inc NYSE CVI is currently correcting the bullish 5 waves cycle from November 2016 low as a triple three structure reaching equal legs area 20 48 19 56 The move can extend lower toward the 50 61 8 Fibonacci area 18 98 17 34 as a double three but will remain supported as the stock is still looking for a move higher toward at least 31 to finish 3 waves correcting 2014 cycle If the stock fails to make new highs after bouncing from the current inflection area then the pullback can extend lower against 12 03 low which should hold to allow CVI to the resume higher later on
EQT Corporation NSYE NYSE EQT failed to make new highs and it s now doing a double three correction from June 2016 peak which already reached the extreme area at 85 17 with enough number of swings to end that cycle However in the short term the stock can still extend toward the equal legs area 50 67 from December 2016 peak before buyers show up to resume the rally or bounce in 3 waves at least while holding above 47 10 low
Exxon Mobil NYSE NYSE XOM is still correcting an older cycle from August 2015 doing a Flat structure from July 2016 peak and currently at the last leg of wave C that could ideally reach the equal legs area 79 88 76 72 before the stock start bouncing in 3 waves at least is tricky because it can always extend but XOM needs to hold above 66 55 to continue its multi year bullish trend
Recap Energy Stocks approaching a technical area where Elliott Wave analysis is pointing to a potential recovery in the coming weeks that will be supported by a rise in Oil prices The Energy sector still needs a clear break above the recent peaks to confirm a bigger move to the upside that will help these stocks for further gains |
XOM | Shale Oil Production Suffers Massive Decline Rates | The Mainstream media continues to delude the public into believing cheap shale oil production will make the United States energy independent We now see articles suggesting that Americans will no longer need to rely upon the Middle East or OPEC for our future oil supply when all we need to do is ramp up our domestic shale oil production Unfortunately its not that simple or easy
Matter a fact the United States will never become energy independent because domestic shale oil production suffers from seriously high annual decline rates What does that mean That means every year the top shale oil fields lose a massive amount of oil production which can only grow by adding an even higher amount of new oil production via a tremendous amount of drilling
For the United States to become energy independent it would have to produce an additional 4 5 million barrels of oil per day mbd Even though we import more than 7 mbd of crude oil our net imports are 4 5 mbd We export the remainder as various petroleum products
Currently the top four shale oil fields in the United States Permian Eagle Ford Bakken Energy and Niobrara produced 4 8 mbd of oil So for the United States to become oil independent we would have to double current shale oil production in these top four fields
You see that is a huge undertaking because these top shale oil fields are suffering from extremely high annual decline rates The EIA U S Energy Information Agency labels this decline as a Legacy Decline I will label it as an Annual decline rate in this article So how bad are these annual decline rates Let s start by looking at what is taking place in the Bakken Field in North Dakota
Bakken shale oil production peaked at 1 26 mbd in December 2014 and has fallen 25 to 963 000 barrels per day bd currently The red area at the bottom of the chart is displaying its month legacy production decline This is how much oil production the Bakken is losing each month I took these figures and calculated how much oil production the Bakken was losing each year
In 2011 the Bakken only lost 307 000 bd but this decline rate surged more than double to 633 000 bd in 2016 Which means the Bakken lost 633 000 barrels per day of oil last year Even though the Bakken added 326 000 bd of new production in 2016 its overall production continued to decline
The same huge declines also took place in the Eagle Ford shale oil field in Texas
The Eagle Ford oil production peaked in March 2015 at 1 71 mbd and is currently down 33 to 1 14 mbd You will also notice the the Eagle Ford suffered an annual oil production decline of 1 174 000 bd in 2016 Which is also why the Eagle Ford oil production continued to decline in 2016 The drillers didn t add enough new oil production to offset the huge declines
If we look at both the Bakken and Eagle Ford together this is the result
Total Bakken and Eagle Ford oil production has declined by 826 000 bd from their peak This is a 28 decline in just two years Furthermore these two fields suffered an annual decline rate of 1 8 mbd of oil in 2016 That is one heck of a lot of oil production lost forever due to a tremendously high annual decline rate
Even though overall U S oil production has increased from a bottom placed in the middle of 2016 due to higher oil prices this increase did not come from the Bakken or Eagle Ford fields As we can see in the chart above combined oil production has remained flat over the past nine months This means the drillers in the Bakken and Eagle Ford haven t been too motivated by the rising oil price to add enough drilling rigs to increase overall production
So where has the overall rise in U S oil production come from if not from the Bakken and Eagle Ford One place is from the new kid on the block called the Permian region in West Texas Permian oil production is up a whopping 486 000 bd since the beginning of 2015 accounting for a large percentage of the overall rise in U S oil production
Unfortunately the Permian s annual oil decline rate is also increasing steadily In 2016 it increased to 1 248 000 bd of oil So the oil companies drilling in the Permian had to add at least 1 248 000 bd of new production to increase overall production in 2016 Actually with all the massive drilling the Permian s oil production only increased a net 142 000 bd last year
However a big increase in Permian oil production has taken place over the past three months this year as the region is the NEW OIL FAD for the U S and global oil industry Major oil companies are jumping in with both feet on the Permian band wagon to continue producing oil This has caused the Permian s oil production to increase by a hefty 143 000 barrels from Jan Mar 2017 That is shown by the big surge up on the right hand side of the chart above
As overall oil production continues to increase in the Permian so will its annual decline rate The Permian will suffer the same fate as the Bakken and Eagle Ford I highly doubt the Bakken or Eagle Ford will ever again surpass their peak production set back in 2015
Top 4 U S Shale Oil Fields Suffer Massive Annual Decline Rate
If we add up the annual oil production decline rates from the top four shale oil producers in the United States they lost a stunning 3 4 mbd of oil in 2016
If we add up the annual legacy oil production declines from the Permian Eagle Ford Bakken and Niobrara oil fields it accounted for 38 of total U S oil production in 2016 Which means these four fields lost 38 of total U S oil production last year
Thus the companies drilling in these four fields had to add at least 3 4 mbd of new oil production just to keep production from declining last year Furthermore to keep production from declining in these four oil fields the companies will have to add another 3 mbd or more EACH AND EVERY YEAR While the decline rate in some of these fields may continue to decline we can plainly see this is a HUGE TASK
In keeping with the U S Energy Hype Theme the Mainstream media has published articles stating the cost to produce oil in the Permian is now down to 40 a barrel and could fall to 20 This is pure nonsense Yes it is true that some production costs have fallen due to a 50 decline in the price of oil but that doesn t change the fact the oil industry continues to be saddled with record amount of debt
The top 18 U S oil companies have seen their long term debt surge from 107 billion in 2008 to 194 billion in 2016 In addition the low oil price destroyed the financial statements of these oil and gas producers In 2008 these 18 domestic energy companies enjoyed a stunning 163 billion in positive operation income Unfortunately last year was a disaster as they suffered a combined 19 billion operating income loss Hell they didn t have the positive operating income to pay the 6 7 interest on the debt payment
The only U S oil company that posted a positive operating income profit in the group was ExxonMobil NYSE XOM However after ExxonMobil paid their capital expenditures and shareholder dividends they were 6 7 billion in the hole last year Which is part of the reason ExxonMobil s long term debt has doubled to 34 trillion in the past two years
Even though domestic shale oil production will continue to increase as investors throw away hard earned funds to either break even or lose money the U S will never become energy independent Yes overall production will rise for a while but when the party is finished the hangover will be extreme Who is going to pay to close in these tens of thousands of shale oil and gas wells
The Falling EROI Energy Returned On Investment is now seriously gutting the entire U S and global oil industry It is also causing a tremendous amount of havoc in the global economy Using massive amounts of debt and derivatives to offset the Falling EROI will not last for long
Sure the madness could continue for several more years but we humans live long lives While the charade could continue for years it will definitely not last for decades Thus watch for disintegration of the U S and global oil industries for clues to when the markets will finally crack |
VZ | Wednesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday lower
ES pivot 2062 25 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ now a swing trade hold
Recap
When I woke up this morning at the crack of 11 AM and looked at the market I wondered how I could have been so badly wrong calling the Dow higher on Tuesday when it was down nearly 200 points But by the time the bell rang I had been vindicated as the Dow puled off the greatest comeback since Lazarus to finish up 93 It was an interesting deveopment so let s look at the implciations for Wednesday
Stupid Blogspot s spell checker seems to be on strike once again so I apologize for any typos in this post
The technicals
The Dow Last night I wrote that this chart now looks bullish and in the end it was as the Dow crossed its 200 day MA yet again to finish with a giant hammer or is it hanging man With this herky jerky Greek fueled back and forth lately it s kind of hard to tell It does though look like the payoff on Monday s bullish RTC trigger and it left the indicators still just barely off oversold So with the 200 MA now as support I m kinda leaning to this as still looking bullish
The VIX And I caught this one too when I wrote this chart looks lower Tuesday as the VIX dropped over 5 on a tall inverted hammer after touching its upper BB the traditional third rail of the VIX That still leaves the indicators just barely overbought and a bearish stochastic crossover in place So I d hazard that the VIX sitll has more downside left here
Market index futures Tonight all three futures are significantly lower at 12 23 AM EDT with S P 500 down 0 75 After bouncing off its 200 day MA on Monday ES conducted a successful retest Tuesday to finsih with a tall tall hanging man The new overnight is looking pretty grim and confirming that candle
ES daily pivot Tonight the ES daily pivot rises from 2056 42 to 2062 25 And that was enough to put ES back below its new pivot so this indicator turns bearish
Dollar index On Tuesday the dollar took big 0 62 gap up pop to trade entirely above its upper BB With indicators now overbought a stochastic that has just formed a bearish crossover and a big yawning gap below begging filling this one looks lower Wednesday But the new overnight is up sharply so who knows where this is going
Euro And on Tuesday the euro continued its current two week plus downtrend with a bearish engulfing candle to close at 1 0986 as it dribbles down its lower BB
Transportation On Tuesday the Trans outperformed the Dow with a big 1 24 gain to close outside their descending RTC for a bullish trigger with indicators still just oversold and a completed bullish stochastic crossover So this chart technically looks quite good
Hmm well technically the charts are looking pretty bullish tonight Just one slight problem China s stock market is cratering in the overnight and judging by the futures that is sure to spill over into our markets on Wednesday So even though I m a technician I m just going to go with the news and call Wednesday lower There s no point fighting this tape that s for sure
Single Stock Trader
Last night I blessed Verizon NYSE VZ as a swing buy and it delivered on Tuesday though with a spindly long legged doji That makes a very rare bullish tri star pattern in fact this is the first one I ve ever seen so I ll just have to say hang in there |
VZ | Thursday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2049 58 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Whoo ee What a month and we re barely past the first week First it was the Greeks Then the Puerto Ricans Then the Chinese market imploded and on Wednesday the NYSE suddenly went on vacation for half the day If it s not one thing it s another Guess it was a good idea to call Wednesday lower Let s see what sense the charts can make of all this turmoil for Thursday
And Blogspot s spell checker must be hosted by the NYSE because this is the second night in a row that I click on it and nothing happens So sorry in advance for any typos
The technicals
The Dow Technically Wednesday s tall red marubozu confirmed Tuesday s tall hanging man as the Dow fell right back through its 200 day MA its seventh cross in seven days We re now right back to the lower BB and indicators are back to oversold But we also just got a bearish stochastic crossover from a low level and those are usually good for a day or two of lower prices
The VIX The VIX which was looking lower last night instead took off for a 22 pop propelled largely by the NYSE debacle and closing above its upper BB just shy of 20 for its higher close since January 30th Normally once the VIX hits its upper BB it goes lower But when it revisits it repeatedly it starts to want to stick around like the spikes we had last October and December And with a fresh bullish stochastic crossover from a high level I am very hesitant to call the VIX lower just yet
Market index futures Tonight all three futures are higher at 12 37 AM EDT with ES up a significant 0 59 On Wednesday ES plunged right back to its 200 day MA making the third day in a row that s served as support It also formed bearish stochastic crossover from a lwo level which is a bad sign But the overnight se3ems to be trying to stage a rally So the worst I can say of this chart is that further downside seems to be limited
ES daily pivot Tonight the ES daily pivot falls again from 2062 25 to 2049 58 But this time that was enough to put ES back above its new pivot so this indicator now turns back to bullish
Dollar index The dollar took a beating on Wednesday gapping down as sharply as it gapped up on Tuesday With a bearish stochastic crossover and indicators still overbought This looks like a recipe for lower again Thursday
Euro On Wednesday the EUR USD made its sixth direction reversal in a row by retracing all of Tuesday s losses and then some to close at 1 1071 That sent the indicators off oversold and further gains in the overnight seem to be pointing to a higher close on Thursday
Transportation The Trans underperformed the Dow on Wednesday turning what looked like an incipient rally into a rout with a bearish stochastic crossover from a low level and a tall red marubozu that took them right back to their lower BB So this chart suddenly looks bearish
Wednesday s decline may have been overdone and the futures are certainly guiding higher in the overnight thanks possibly to some Chinese central bank meddling in their stock market who knows I can t keep track of all this anymore In any case when the futures are up nearly 0 6 in the wee hours of the morning it s good to pay attention So I m going to call Thursday higher despite some bearish technicals
Single Stock Trader
The bullish tri star in Verizon NYSE VZ did not pan out on Wednesday as VZ was dragged down with the rest of the market on the Chinese market news and the unscheduled NYSE holiday It left us with a gap down doji star sitting on its lower BB but with a bearish stochastic crossover so I m going to just wait and see what it does Thursday morning |
VZ | How To Reap Oligopoly Profits With ATT | AT T Inc NYSE T 5 5 dividend yield stands out for dividend investors Dividends have long been a central part of AT T s shareholder return AT T NYSE T is a thanks to its 31 consecutive years of dividend increases
In the investing world size and stability often but not always go together AT T is the second largest telecommunications company in the United States AT T has a market cap of 179 billion versus 189 billion for rival Verizon Communications Inc NYSE VZ
AT T operates in two segments wireless and wireline The wireless segment now accounts for 56 of the company s revenue The wireline segment generated 44 of AT T s revenue in its
The wireless segment is made up of the company s smart phone cell phone and tablet data contracts
The wireline segment sells internet television and voice over IP services to individuals In addition the segment provides VPN cloud hosting IP conferencing and Ethernet services to business customers
The United States Telecommunications Oligopoly
The United States wireless telecommunications market is dominated by 4 companies AT T Verizon Sprint and T Mobile have greater than 90 market share AT T and Verizon each have over 30 market share
Competition is reduced when an industry is dominated by only a few large businesses Lower competition is not good for consumers but great for the few dominant businesses AT T and Verizon in particular are large enough to reap the lion s share of profits in the telecommunications industry
Why is the wireless industry in the United States dominated by only a few large players
Due to the high barriers to entry into the market There are massive up front costs to building the infrastructure necessary to be in the United States telecommunications industry
In addition wireless spectrum usage is controlled and auctioned by the United States government AT T spent 18 2 billion in the In total the auction raised a cool 44 9 billion for the FCC
Spectrum auctions prevent smaller players from gaining access to the wireless industry The government plays a large part in this industry It should not surprise anyone that AT T has spent over 184 million on lobbying since 1998 It would be shocking if the company were spending this money and not getting any return on investment
Returning Profits to Shareholders
While the unique economics of the wireless telecommunications industry may be bad for consumers they are good for investors
AT T currently has a payout ratio of 72 of expected 2015 earnings The company returns the bulk of its profits to shareholders Investing in AT T or Verizon entitles you to the bulk of the profits generated in an oligopolistic industry
In addition to AT T s sizeable dividend payments the company also returns money to shareholders through share repurchases AT T reduced its share count by 2 2 a year from 2007 through 2014
AT T s Acquisition Fueled Growth
AT T s future growth will come from its pending acquisition of DirecTV DTV and its planned acquisition of Nextel Mexico
The DIRECTV NASDAQ DTV acquisition will result in meaningful synergies between the two companies The company is expecting annual savings of 2 5 billion a year within 3 years of the acquisition The deal is expected to close this year
The strategic rationale for the DirecTV acquisition is as follows DirecTV will give AT T a quality video partner Streaming is expected to become increasingly important on mobile devices in the future DirecTV will play a large part in streaming in the future
In addition DirecTV has a strong presence in Latin America AT T is focused on expanding internationally into Latin America The DirecTV acquisition is a way for the company to quickly gain access to this market
AT T s Latin American expansion begins with Mexico The company is acquiring Nextel Mexico AT T recently announced it would invest 3 billion to extend its high speed mobile internet to 100 million Mexican consumers by 2018 Customers on AT T Mexico plans will be able to make calls on their Mexican plan while in the United States to others on AT T plans This 2 countries 1 plan approach should have wide appeal in Mexico and help AT T gain market share in the country
Safety and Recession Performance
AT T s telecommunications business generates stable cash flows The company locks its customers into multi year contracts that typically have steep cancellation fees
AT T has customer churn of around just 1 a month This means customers do not often switch from AT T to rival competitors Both cancellation fees and the similarity of competitor offers to AT T help to discourage cancellations
AT T s stable cash flows and long history of consecutive dividend increases make it very likely the company will continue to pay increasing dividends
The company performs well during recessions AT T saw earnings per share dip slightly during the Great Recession of 2007 to 2009 but the effects were not severe the company remained highly profitable AT T s earnings per share through each year of the Great Recession are shown below
2007 earnings per share of 2 76
2008 earnings per share of 2 16
2009 earnings per share of 2 12
AT T s Valuation and Final Thoughts
What price to earnings ratio would you expect to pay for a shareholder friendly company that is recession resistant and has international growth potential Probably more than a forward price to earnings ratio of 13 2 yet that s what AT T shares trade for at this time
AT T currently ranks in the top 25 of stocks with 25 years of dividend payments without a reduction using The 8 Rules of Dividend Investing AT T offers investors a combination of stable cash flows and an exceptionally high dividend yield at a compelling valuation |
VZ | Monday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday uncertain
ES pivot 2062 83 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Well the market rose as expected last Friday because Mr Market believed the Greeks the same way Linus believed Lucy wasn t going to pull the football away when he was about to place kick it Ho hum So after seeing a Good Greek that means we must be in line for a day of the Bad Greeks right Let s see if the charts can sort it out in time for Monday
The technicals
The Dow On Friday the Dow scored another triple digit gain the net result of which was that we ended up exactly where we were seven trading days ago It also makes nine consecutive days of 200 day MA crosses in a row The net take away is that there s strong resistance at 17 755 Unless we get a breakout on Monday it seems more likely we go down again
The VIX After spending six of the last eight above its upper BB on Friday the VIX finally threw in the towel and dove nearly 16 back under 17 That sent the indicators off overbought and set up the stochastic for a bearish crossover So technically this chart looks lower ah but then there s them Greeks
Market index futures Tonight the futures are essentially flat for the first time in quite a while at 12 26 AM EDT with ES down all of 0 01 but YM up 0 01 On Friday ES confirmed Thursday s gravestone doji off the 200 day MA with a nice gain and is now almost back to recent strong resistance around 2072 That in itself would seem to limit potential upside
ES daily pivot Tonight the ES daily pivot jumps from 2049 17 to 2062 83 But ES still remains above the new pivot so this indicator continues bullish
Dollar index After a crazy week of up and down gaps the dollar on Friday ended exactly where it began after a 0 64 loss But we remain overbought and a completed stochastic crossover is in effect so the possibility of more downside on Monday remains
Euro On Friday the euro climbed to 1 1150 its eighth day in a row of alternating down up action The overnight is continuing higher but Monday s close will surely be dictated by the news from Greece
Transportation On Friday the Trans outperformed the Dow to break resistance at 8176 on a tall green marubozu The indicators are now marching steadily toward overbought so there s nothing bearish about this chart tonight
Once again the market is hanging on the latest installment of As the Drachma Turns as the European scriptwriters burn the midnight oil trying to answer the question posed by those noted geopolitical analysts The Clash about Greece Should I stay or should I go I personally have no clue but the outcome will determine Monday s close not the technicals Therefore I call Monday uncertain
Single Stock Trader
Verizon NYSE VZ went up on Friday along with the entire rest of the Dow It s all being run by Greece at the moment so there s no point discussing it any further until that whole bro ha is settled |
VZ | Tuesday Uncertain VIX Looks Bearish | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday uncertain
ES pivot 2080 42 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Well Mr Market seemed happy with the outcome of the all night Greek negotiations in which the Greeks promised to do stuff they never have and aren t likely to ever do But no matter optics is everything in the stock market and on Tuesday Mr Market had his rose colored glasses on Go figure Now can we please get on with it and see where Tuesday is headed
The technicals
The Dow As has been so often the case lately all the action on Monday was over in the first two minutes of trading The other six hours and 28 minutes were just noise How anyone can make money this way is beyond me I certainly can t In any case that now gives us three up days in a row and two white soldiers that have finally marched away from the 200 day MA With rising indicators this chart once again looks bullish
The VIX Perhaps the most dramatic chart of the day was the VIX which plunged over 17 to gap down right through its 200 day MA on a tall red marubozu With a now complete bearish stochastic crossover and falling indicators this one looks nothing but bearish
Market index futures Tonight all three futures are lower at 1 50 AM EDT with ES down 0 06 On Monday ES had its best day of the year so far zooming back to 2094 50 on a giant marubozu And that didn t even drive the indicators overbought yet So there are really no bearish signs to speak of here
ES daily pivot Tonight the ES daily pivot leaps from 2062 83 to 2080 42 But even that giant move wasn t enough to put ES back below its new pivot so this indicator continues bullish
Dollar index The dollar on Monday had its sixth gap move in six days with a big 0 86 jump that was good enough to form a bullish stochastic crossover Still not overbought and with resistance some distance away I d say there could be room to run higher again from here
Euro After what appeared to be a breakout from its descending RTC on Friday the euro proceeded to give it all back on Monday and then some down to 1 1007 Of course now we re near support and the new overnight is actually higher so any further downside from here may be limited
Transportation The trans had a great day Monday up a percent for three white soldiers and a new rising RTC that stopped right at resistance at 8303 Indicators are now near overbought so it s not clear we can push any higher from here
I don t really see any bearish technical indications in the charts tonight However I am concerned that we ve come pretty far in the past two days and three day streaks have been exceedingly rare this year so far This seems like a market that s ready for a pause possibly a doji day So rather than simply call the close higher in the absence of any bearish signs I m going to have to content myself with calling Tuesday uncertain
Single Stock Trader
NYSE VZ gained 20 cents Monday but was the third from the worst in the Dow on a red hanging man With RSI peaked just short of overbought and stymied by resistance at 47 39 I can t recommend this as a swing buy right now |
VZ | Wednesday Uncertain Dow Has Biggest 3 Day Run Since February | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday uncertain
ES pivot 2099 33 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
We declared Monday uncertain because of Greece and Tuesday uncertain because of a question that the market had run too far too fast and was in need of a pause Well as is his wont Mr Market pulled a surprise and the Dow managed to add on another 76 points for its biggest three day run since February
The Technicals
The Dow It didn t quite match the previous two big gains but the Dow rose 76 Tuesday nonetheless A new rising RTC is thus in place we re still not overbought and with no resistance til 18 134 there still seems to be some room to run here
The VIX The VIX fell again Tuesday as expected with a small red hammer But being not yet oversold and still nowhere near support or its lower BB there s no reversal sign here
Market index futures Tonight all three futures are higher at 1 08 AM EDT with ES up 0 08 ES had a good day Tuesday but seems to be running out of steam as the indicators near overbought The new overnight is a doji so far but it s still too early to call a reversal here
ES daily pivot Tonight the ES daily pivot rises again from 2080 42 to 2099 33 And once again ES remains above its new pivot so this indicator continues bullish
Dollar index On Tuesday the dollar continued bouncing around with a small spinning top reflecting continuing uncertainty in Greece and China This chart is too tough for me
Euro Similarly on Tuesday the euro also gave us a doji but support around 1 0992 held and with indicators still near oversold I d say there s more upside potential than downside risk here
Transportation In a bit of bearish divergence the trans lost 0 07 on a small doji star on Tuesday snapping a big three day winning streak With indicators nearly overbought this could mean a reversal on Wednesday
Sigh it looks like I m just going to have to call Wednesday uncertain given the plethora of upcoming news including Auntie Janet a report on the Chinese economy and those Greeks again Any one of those could easily trump the technicals which still aren t showing a bearish reversal yet
Single Stock Trader
NYSE VZ gained a bit again on Tuesday but this still isn t my preferred swing entry pattern It s just acting a bit too jittery for my tastes so we leave it be again |
VZ | Thursday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2102 33 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap
Last night I called Wednesday uncertain and with a net Dow change of just 3 4 points that seems to have been the right call
Political rant
I amused myself this afternoon by watching the Empty Suit imagining himself the statesman on TV as he channeled his inner Neville Chamberlain waving about his Iranian agreement and thinking he d accomplished something
Remember what the Fuhrer said back in 1938 after Chamberlain departed That piece of paper means nothing Obviously they don t teach European history at Harvard Law School Meanwhile the Ayatollahs are popping the champagne corks in Tehran all the while their sycophants burn American flags in the streets and shout Death to America
Way to go Obama Take a good look these are the people you think are going to sing kumbaya around the camp fire with you Well they ve got the fire going anyway What were you thinking The world sir is laughing at you So sad
The technicals
The Dow On Wednesday the Dow was up then down then up some more and down some more as various pieces of news came out In the end it all signified nothing as we got a perfect little doji star After four big up days and with indicators now overbought that s a decent reversal sign IMHO
The VIX And the VIX was pretty much in the same boat with a doji of its own on Wednesday With its stochastic curving around for a bullish crossover indicators nearing oversold and a massive four day run down this one looks ready to move higher any day now
Market index futures Tonight all three futures are higher at 12 15 AM EDT with ES up 0 30 ES managed another gain on Wednesday but did it on a small spinning top The gains in fact have been shrinking for three days now as ES looks to be running out of steam More worrisome the stochastic is curving around and is that close to a bearish crossover On the other hand the overnight is putting in a non trivial advance possibly on some more Greek news so once again we can t call a reversal yet
ES daily pivot Tonight the ES daily pivot rises again from 2099 33 to 2102 33 But ES still remains above its new pivot so this indicator just continues bullish
Dollar index On Wednesday the fidgety dollar popped 0 51 as it continues to pinball its way through July We re now near month long resistance but with the way things have been going lately who knows I m still not calling this one
Euro And a good example last night I figured the euro was showing signs of bottoming But noooo instead it fell again this time to 1 0957 after breaking support at 1 0989 Anyway we now have a new descending RTC going and the overnight is continuing lower so no technical reversal signs here
Transportation After a divergent doji on Tuesday warning of a reversal on Wednesday the Trans confirmed that with a big 0 72 decline that underperformed the Dow and provided even more bearish confirmation Add in a bearish setup on a rising RTC exit and a stochastic within inches of a bearish crossover and that all spells lower on Thursday to me
Hmm we re seeing a number of dojis in the charts tonight that generally signal reversals But the market has been largely news driven lately so much as I love my candlesticks I m afraid I m going to have to go with the futures tonight and call Thursday higher A 0 30 advance i the wee hours is too much to just ignore
Single Stock Trader
With a classic hanging man on Wednesday Verizon NYSE VZ is now looking technically toppy and so is definitely not a swing trade buy at this point |
VZ | Monday Depends On ES Pivot | The Hoot Actionable ideas for the busy trader delivered daily right up front
Monday higher only if ES remains above its pivot else lower
ES pivot 2117 17 Holding above is bullish
Resr of week bias uncertain technically
Monthly outlook bias higher
Single stock trader NYSE VZ not a swing trade buy
Recap
Friday wasn t a bad day to take a holiday a meager 34 point loss in the Dow and not much else going on We now look ahead to Monday and peruse the charts for clues
The Technicals
The Dow On Friday the Dow put in a nice classic red hanging man that was unable to top Thursday s peak It also fell out of a steep Pearson LONDON PSON s 0 969 rising RTC for a bearish setup The indicators are now highly overbought and the stochastic just squeaked out a bearish crossover making me think this one is headed lower Monday
The VIX The VIX only lost 1 33 on Friday but what was interesting was the fact that it tested year long support around 12 With a green candle closing at 11 95 I m inclined to consider that a successful test Indicators are now quite oversold RSI 3 72 and the stochastic is in prime position for a bullish crossover Real Soon Now It sure looks to me like a move higher is coming sometime this week I m just not sure if Monday s the day though that s certainly eminently possible
Market index futures Tonight all three futures are slightly higher at 1 26 AM EDT with ES up 0 02 Last Friday ES put in a hanging man at the top of Thursday s candle The indicators are extremely overbought RSI has hit 100 now And the new overnight is trading outside the steeply rising RTC for a bearish setup And ES still faces tough resistance at 2120 I have to think this chart has more downside risk than upside potential at this point
ES daily pivot Tonight the ES daily pivot rises again from 2113 75 to 2117 17 That still leaves ES above its new pivot albeit by less than before but for now this indicator continues bullish
Dollar index On Thursday the dollar put in a tall gap up doji I would have thought for sure that meant it was going lower Friday but instead it gained another 0 19 That now leaves it at two month resistance with overbought indicators We re still a bit shy of the upper BB though so in the absence of a reversal candle I can t call it lower just yet though it looks like it will be tough sledding from here
Euro Meanwhile the euro just continued to sink on Friday right back down to two month support at 1 0883 With a lower BB touch and oversold indicators you d think that would be a reversal warning but no we re going even lower in the Sunday overnight and non trivially at that With a descending RTC intact there s no way I can call the euro higher on Monday
Transportation And finally on Friday the trans actually gained 0 67 in some bullish divergence relative to the Dow But they spent much of the day retracing early gains and in the end were unable to close above resistance at 8297 Interpret that how you want With indicators quite overbought this inverted hammer looks bearish to me
We now have a number of technically bearish signs in the charts tonight but they re all of the sort that require confirmation I think the market s looking pretty toppy right now but it s not clear that there isn t still one more push higher left in it before the pullback So with ES near its pivot I m going to make a conditional call if ES manages to remain above its pivot by mid morning Monday we ll lose the day higher If it falls through we close lower
Single Stock Trader
After some more gains on Thursday VZ came in a bit on Friday for a bearish harami that was good for a bearish stochastic crossover Add in overbought indicators and this one looks more like a short than a buy for Monday |
XOM | Things could get heated at the Exxon Mobil annual meeting | With Rex Tillerson leading the State Department it s up to new Exxon Mobil NYSE XOM CEO Darren Woods to face the heat today on climate change at the company s annual shareholder meeting in Dallas Key Exxon shareholders such as BlackRock Vanguard Group and the California Public Employees Retirement System are pressuring the company to stress test against warming targets set in the Paris climate agreement The issue of executive compensation could also be a talking point after proxy firm ISS recommended voting against the company s latest pay package Now read |
XOM | Exxon CEO points to rising oil demand despite Paris driven carbon limits | Oil demand will continue to grow in the coming decades even as the world strives to reduce greenhouse gas emissions to counter climate change Exxon Mobil XOM 0 6 CEO Darren Woods says at the company s annual shareholder meeting Population growth and a desire for higher living standards will increase usage of petroleum based fuels especially for transportation Woods says also noting the untapped energy market among the 1B people who currently have no access to electricity and the 3B who do not use modern cooking fuels XOM forecasts the need for 11T in oil and gas investment and the company believes it will come out ahead in a survival of the fittest Now read |
XOM | Exxon climate proposal passes as shareholders seek more disclosure | Exxon Mobil XOM 0 5 shareholders at the company s annual meeting approve a non binding proposal calling for regular reports on the business impact of compliance with global climate change guidelines A preliminary tally shows the proposal passed with 62 of ballots cast a sizeable increase over last year s 38 support for a similar report The size of the vote indicates at least some institutional investors probably voted in favor BlackRock and Vanguard reportedly had been strongly considering voting for the climate stress test Now read |
CSCO | Extreme Networks EXTR Jumps Stock Rises 9 6 | Extreme Networks Inc NASDAQ EXTR was a big mover last session as the company saw its shares rise nearly 10 on the day The move came on solid volume too with far more shares changing hands than in a normal session This continues the recent uptrend for the company for the company as the stock is now up 18 4 in the past one month time frame The company has seen a mixed track record when it comes to estimate revisions of no increase or decrease over the past few weeks while the Zacks Consensus Estimate for the current quarter hasn t been in the trend either The recent price action is encouraging though so make sure to keep a close watch on this firm in the near future Extreme Networks currently has a Zacks Rank 4 Sell while its is 0 00 A better ranked stock in the Computer Networking industry is Cisco Systems Inc NASDAQ CSCO which currently carries a Zacks Rank 2 Buy You can see Is EXTR going up Or down Predict to see what others think or The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
XOM | Peak Oil Drawdown | Oil is rising on peak oil concerns OK not the old failed ideology of peak oil but the fact that U S oil supply in the U S may have peaked as well as Exxon Mobil s NYSE XOM proven reserve
The American Petroleum Institute API in its weekly report said we had the first crude oil drawdown of the year and the biggest draw in Cushing Oklahoma since April of last year This comes as Exxon Mobil reported what was the deepest reserves cut in its modern history as the crash in oil and natural gas markets dramatically reduced the value of Exxon Mobi proven reserves The odds are rising that oil has seen the low for this year especially if the Energy Information Administration EIA confirms data and we can now start moving toward are intermediate target of 60 00 per barrel and then our longer term target of 73 00 dollars Barring any major economic meltdown oil supply will start to tighten globally solidifying a market floor
The API finally reported a draw in crude of 884 000 barrels Even though it seems like a small draw it is a step in the right direction Another big draw in Cushing Oklahoma of 1 73 million barrels is showing that demand for oil in the county is gaining strength While Gulf Coast inventories have become a dumping ground for global supply we should start to see those supplies peak as the last shot of pre OPEC cut supply has probably already been delivered Now as U S refiners start to come slowly out of maintenance and the growing anticipation of the upcoming summer driving season approaches not to mention record U S crude exports we should start to reignite the bullish petroleum fires
The API also reported that gasoline inventories fell last week signaling that perhaps gasoline demand is not as anemic as previous data might have indicated Distillate inventories also fell by 4 23 million barrels as well also signaling strong demand So we may have seen the peak of what was previously record petroleum inventories and that should continue to fall as we go forward
Also keep in mind that when you look at U S oil inventories you cannot look at them through the same lens as you did before Now that the U S oil export ban has been lifted we will see a new dynamic as oil and product supply should be viewed more in line with global supply The market is evolving and what was true a few years ago is no longer true today The U S can export oil and OPEC can adhere to production cuts The U S can be a major global energy hub Even the former oil bears are starting to come to this realization Welcome to the bull camp There is plenty of room to jump on board
Even as prices rise the oil industry is still trying to recover from what was one of the biggest oil crashes in history Almost a trillion dollars in capital spending cuts will take its toll and the shale producers will not be able to replace that oil Exxon Mobil s announcement of reserve cuts is just one example from the fallout that is not going to be fixed even as oil heads back towards 60 a barrel Bloomberg News reported that Exxon cut the equivalent of about 3 3 billion barrels of untapped crude and it was removed from the so called proved reserves category The revision came as low energy prices made it mathematically impossible to produce many oil and gas fields at a profit soon The biggest cut came in de booking Canada s 3 5 billion barrel Kearl oil sands project Bloomberg reports that change amounts to the largest annual cut since at least the 1999 merger that created the company in its modern form The previous record cut was a 3 percent reduction taken during the height of the global financial crisis in 2008
Can natural gas make a comeback Weather warming crushed the market as winter has taken a holiday and spring temperatures has covered for falling production and record non heat related demand We still believe that we have risk to the upside if the weather gets back to normal The structural issues for gas have not been solved but we may have to get over this price collapse for a bit longer The price crash in gas will lower production expectations going forward |
XOM | Oil The Calm Before the Storm | The volatility in the crude oil market is at a 28 month low but that complacency in the market may be short lived as the International Energy Agency warns of looming oil supply shortages over the next three years This comes as Exxon Mobil NYSE XOM makes a big investment in the coming U S oil boom as it plans to invest 20 billion dollars in the Gulf Coast creating 35 000 construction jobs and 12 000 permanent jobs as it seeks to position itself as the U S becomes a major oil and gas exporter These are high paying jobs many of which will pay more than 100 000 dollars per year The global energy landscape is changing and the coming oil boom is on its way and this time the White House will not get in the way
Crude oil along with other commodity markets are locked in a very tight trading range The market seems to be waiting for something to happen and for oil we can see the wheels turning While in the short term the rise in shale oil prices seems to have checkmated OPEC production cuts the lack of investment in more traditional oil projects is creating the shortage of the future
Yesterday the International Energy Agency IEA Executive director Dr Fatih Birol warned of a shortage of oil in three years as reported by MarketWatch Market Watch wrote The key takeaway from the IEA report is the looming imbalance Matt Parry IEA senior oil economist told MarketWatch by email from Paris A large potential supply deficit may take hold around 2020 as demand growth is consistently forecast to outstrip projected increases in global oil supplies he said A net demand gain of 7 3 million barrels per day is forecast for 2016 22 vastly exceeding the projected supply growth of under 6 mb d The IEA report said that demand and supply trends point to a tight global oil market and in 2022 spare production capacity may fall to 14 year low For now we are witnessing the start of a second wave of U S supply growth and its size will depend on where prices go Dr Fatih Birol the IEA s executive director said in a statement But this is no time for complacency We don t see a peak in oil demand any time soon And unless investments globally rebound sharply a new period of price volatility looms on the horizon The IEA report said that demand and supply trends point to a tight global oil market and in 2022 spare production capacity may fall to 14 year low
Exxon Mobil is also seeing that potential and is putting money into what will be the new U S dynamic as a major oil exporter It was reported that Chairman and CEO Darren Woods has initiated a project called Growing the Gulf an expansion plan that was mostly designed to create petroleum products for export from the U S to an energy hungry global market In a press release Woods said We are using new abundant domestic energy supplies to provide products to the world at a competitive advantage resulting from lower costs and abundant raw materials
While this is great news it comes after Exxon is putting half of its worldwide drilling budget to U S shale fields next year Exxon Mobil is looking to expand in the U S with a friendly U S government and with the ability to increase and decrease oil production at a much lower investment point and less risk While that is good for Exxon Mobil it may not address the looming supply shortage that the IEA is talking about because even with massive investment in shale it will not replace the more traditional projects that Exxon Mobil is walking away from Woods also warned that wasted investment in high cost low return green energy projects have hurt Woods was quoted as saying They are more expensive and lead to poor investment decisions focused on the limitations imposed not true innovation
Our base case for oil is the same as the International Energy Agency We predicted last year that oil had hit a generational bottom and we are in a changing energy landscape We predicted high OPEC compliance and we also are expecting and predicting that OPEC will extend production cuts We said to look at the record U S inventories in a different light Not as a glut that will feed the U S market but more of a base to start to embrace the U S as a major oil exporter We have made the leap and we choose to be energy independent and now the U S will soon be viewed as the new energy hub of the globe
Triple A reported that oil prices slipped fractions of a penny over the weekend reaching today s national average price for regular unleaded gasoline of 2 31 per gallon Today s price is still two cents more than one week ago four cents more compared to one month ago and 50 cents more per gallon year over year Retail prices continue to fluctuate but have remained between 2 28 2 32 for more than a month as reports of increased U S production continues to counter OPEC rebalancing efforts |
XOM | FED Hike Priced In Yet | Good Morning
Could it be turnaround Tuesday As the FED made it pretty clear they will raise rates on the Ides of March next Wednesday the 15th of the month This morning we have U S Trade Balance followed in the afternoon with Consumer Credit at 2 00 P M and API Energy Stocks at 3 30 P M
On the Corn front investors are gearing up for Thursdays Crop Production USDA Supply Demand data and also monitoring the progress in Brazil recovering from the rains that washed out roads making it difficult for truckers to move their load to port for shipping On the other hand the rains were a benefit to Argentina which gave much needed moisture In the overnight electronic session the May Corn is currently trading at 377 which is 1 of a cent lower The trading range has been 379 to 376
On the Ethanol front there were no trades posted in the overnight electronic session The April contract settled at 1 506 and the market is currently showing 5 bids 1 495 and 1 offer 1 513 with Open Interest at 2 450 contracts
On the Crude Oil front big news Saudi Aramco will pay Royal Dutch Shell NYSE RDSa 2 2 billion dollars to finalize the breakup of their two decade Motiva Enterprises refining partnership in the U S The deal will give Saudi Arabia sole control over the largest refinery in the U S producing 600 000 barrels a day in Port Arthur Texas Aramco will take full ownership of Motiva Enterprises LLC name and legal entity Saudi Arabia will also get 24 distribution terminals Shell will assume sole ownership of Norco and Convent refineries in Louisiana as well as the 11 distribution terminals The key part of this deal was Motiva s 3 2 billion in net debt These buyouts and mergers are reminiscent of the beginning of a bull market as I recall the 80s and 90s history of the bottom when Exxon NYSE XOM merged with Mobile the breakup of Texaco to name a couple In the overnight electronic session the April Crude Oil is currently trading at 5344 which is 24 points higher The trading range has been 5350 to 5302
On the Natural Gas front the market is pulling back on the reigns after a nice move in yesterday s action Incoming inclement weather will be a key for as long it will last In the overnight electronic session the April Natural Gas is currently trading at 2 846 which is 5 cents lower The trading range has been 2 890 to 2 833
Have a Great Trading Day |
CSCO | U S stocks open higher on jobs report Dow Jones up 0 15 | Investing com U S stocks opened higher on Monday after U S employment data on Friday suggested the economy is improving but not enough to persuade the Federal Reserve to start scaling back its stimulus program During early U S trade the Dow Jones Industrial Average added 0 15 the S P 500 index edged up 0 14 while the Nasdaq Composite index eased up 0 09 Official data on Friday showed that the U S economy added 175 000 jobs last month slightly more than the 170 000 gain forecast by economists The unemployment rate ticked up to 7 6 from 7 5 in April The data indicated that the economic recovery in the U S is on track but is not strong enough for the Federal Reserve to begin unwinding its USD85 billion a month asset purchase program Apple shares climbed 0 53 amid reports the tech giant is preparing to unveil changes to the software powering iPhones and iPads in a move to reignite desire for its products and blunt the advance of Google s Android mobile operating system Separately Google advanced 0 71 as it could pay more than USD1 for navigation and traffic application Waze according to a Reuters report Adding to gains video recorder pioneer TiVo jumped 0 99 after plummeting over 19 on Friday as the company said it would receive USD490 million after settling a patent lawsuit with Google s Motorola Mobility Cisco Systems and Time Warner Cable just days before the case was to go to trial Elsewhere McDonald s rallied 1 34 after the fast food giant said its global same store sales gained 2 6 in May thanks to its expanded offerings for late night breakfasts modified menu options and benefited from advertising value priced meals Other stocks in focus included Lululemon Annie s and PepBoys expected to report earnings after the closing bell Across the Atlantic European stock markets were higher The EURO STOXX 50 added 0 22 France s CAC 40 edged up 0 19 Germany s DAX gained 0 88 while Britain s FTSE 100 inched 0 02 higher During the Asian trading session Hong Kong s Hang Seng Index edged up 0 18 while Japan s Nikkei 225 Index soared 4 94 |
VZ | Monday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday higher
ES pivot 2104 14 Holding above is bullish Now running U contract
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ not a swing trade buy
Recap Sigh last week I said Thursday would go lower so it went higher And then I said Friday would go higher so of course it went lower It s amazing I have any hair left at all after pulling it all out But then if this was easy everybody would be doing it So with the Fed and op ex out of the way let s see if I can get Monday right as we begin the last full week of this miserable month The technicals The Dow After a nice advance last Thursday the Dow gave it all back Friday with a red inside harami that flattened out the stochastic a if to prepare for a bearish crossover Or we could just be back in one of these alternating up down patterns again with the Dow changing direction every day for the past five The short term trend remains higher The VIX Shoot I figured the VIX was going lower for sure on Friday but it didn t up instead nearly 6 for a bullish harami though we remain in a descending RTC Chalk it up to op ex shenanigans I guess Market index futures Tonight all three futures are higher at 12 25 AM EDT with ES gapping up 0 43 On Friday ES retraced 2 3 of Thursday s gains with a more or less dark cloud cover thingee that combined with overbought indicators looked bearish But the new overnight gapped up significantly possibly on some kind of positive news on Greece And that was enough to unbend the stochastic so it s no longer forming a bearish crossover And the new candle is a bullish harami so far ES daily pivot Tonight the ES daily pivot falls again from 2105 33 to 2104 14 But it s the big overnight pop in ES that has pushed it back above its new pivot so this indicator turns bullish As a reminder we ve switched over to the U contract Dollar index At least I was right about the dollar on Friday It did go higher all of 0 03 and on a funny red candle at that We remain in a descending RTC but we did bounce off the lower BB and with indicators continuing oversold it s just possible we go higher again on Monday Euro Last Thursday the euro was showing signs of moving lower but I wasn t confident enough to call it Too bad too because the euro had its first down day in three with a red spinning top that failed to beat Thursday s highs With new resistance in place around 1 14 and overbought indicators the euro may have trouble rising further on Monday Transportation And to round it out I was also wrong about the Trans which was unable to capitalize on Thursday s gains and dropped 0 38 on Friday with an inverted hammer in dark cloud cover position Trading outside the descending RTC it s a bullish trigger though So with two conflicting predictors here this one s a wash
Tonight the overall look of the charts is fairly indecisive with the one notable exception of the futures which are rallying sharply Since that s more current than whatever happened last Friday I m going with that and calling Monday higher Single Stock TraderWell Verizon NYSE VZ failed to clear resistance last Friday and with another dip that takes it back off the swing buy list |
VZ | Tuesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2112 75 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ not a swing trade buy
Recap The Greek deal or possibility of a deal or talk of a deal or whatever was neatly telegraphed Sunday night and resulted in a triple digit gain for the Dow on Monday So let s move on to Tuesday and see what those slippery Greeks have in store for us now The technicals The Dow On Monday the Dow retraced all of Friday s losses but that still leaves us right on resistance at 18 120 Indicators are noodling about between oversold and overbought so there s really not much to go on here The VIX The descending RTC asserted itself on Monday as the VIX lost 8 74 to just touch its lower BB before recovering a bit The indicators are not yet oversold but BB touches have marked bottoms the last 12 out of 12 times they ve happened that s as far back as I looked So I d have to guess the VIX may go higher on Tuesday Market index futures Tonight all three futures are higher at 12 48 AM EDT with ES up 0 27 Last night I mentioned the bullish aspect to this chart and on Monday it rose nicely touching its upper BB on the dot 2122 intraday Indicators are no longer overbought and the new overnight didn t even bother testing resistance at 2115 instead gapping up right through it At this point it looks like a revisit of Monday s high is coming ES daily pivot Tonight the ES daily pivot rises from 2104 17 to 2112 75 That leaves ES still above its new pivot so this indicator remains bullish Dollar index Last night of the dollar I wrote that it s just possible we go higher again on Monday And that possibility came to be with a 0 26 gain on a bullish harami With indicators still oversold there now seems to be more upside potential here than downside risk Euro On Monday the euro continued its recent string of dojis all reflecting the ongoing nonsense in Greece with a red spinning top back down to 1 1350 That nonetheless keeps it in its rising RTC though just barely With a stochastic just squeaking out a bearish crossover the overnight will tell the tale Transportation After an opaque Sunday night the Trans managed a nice 0 81 gain on Monday to break resistance at 8450 Next resistance is 8512 and with indicators not yet overbought I d expect to see this level on Tuesday
The only sign on tonight s chart at all bearish is the VIX and it s far from certain it will reverse on Tuesday so I m going to go ahead and call Tuesday higher Single Stock TraderOn Monday Verizon NYSE VZ gained a few cents but on a red spinning top as a bearish harami so I m still not on board |
VZ | Wednesday Depends On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher only if ES stays above its pivot else lower
ES pivot 2116 08 Current ES direction uncertain
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ still not a swing trade buy
Recap On Tuesday the market advanced again but the stress of pushing past recent resistance was evident as the Dow fell back from early gains to finish up just 24 points Add in the ongoing Greek drama Act MCMLXVIII and we have an interesting situation Let s see what the chart make of this The technicals The Dow The Dow managed to close above recent resistance just barely but was unable to break intraday highs The result was a lopsided green spinning top with indicators just shy of overbought It s not a great situation for the bulls I d not be going long right now The VIX Last night I noted the lower BB touch for the VIX and suggested that might mean higher from there But in closing I also noted that this wasn t a given And indeed on Tuesday the VIX revisited and closed below its lower BB for a 5 gap down loss stopping right on two month long support This now looks like an even better reversal case for Wednesday Market index futures Tonight all three futures are essentially flat at 12 46 AM EDT with ES down a single tick ES did attempt to move higher on Tuesday but the 2021 area remains a sticking point Right now it s gone overbought and with a dark cloud cover forming beside Monday s spinning top the whole chart is looking tired ES daily pivot Tonight the ES daily pivot rises again from 2112 75 to 2116 08 But that leaves ES sitting smack dab exactly on top of the new pivot so until it decides which side of the fence to fall on this indicator is a toss up Dollar index Holy moly Last night I did write that there now seems to be more upside potential here than downside risk but I sure wasn t expecting a monster 1 20 gap up moonshot That popped the dollar right out of its month long descending RTC for a bullish setup even as the indicators are only just off oversold But with such a yawning chasm now below us I need to wait as see if the buck is going to retrace on Wednesday or not Euro And of course the euro on Tuesday correspondingly took a big dump all the way back to 1 1180 falling right out of its rising RTC for a bearish setup and sending the indicators all on their way towards oversold There s a bit of a rally going on in the overnight but it has the feel of a DCB to it The euro might close higher on Wednesday but I m not expecting a major retracement Transportation And finally in a bit of bearish divergence the Trans started looking toppy on Tuesday with a 0 15 drop on a day the broader market was higher A tall inverted hammer unable to close above Tuesday s candle nearly touched their upper BB and left the stochastic about to form a bearish crossover So this chart is looking lower for Wednesday
Tonight the charts are showing some signs of toppiness but not enough to just go ahead and call the market outright lower But with ES sitting on top of its pivot it s a perfect time for a conditional call It goes like this if ES breaks higher above its pivot by mid morning Wednesday then we ll close higher And if it falls below the pivot we close lower Doesn t always work but it s all I ve got I think Greece is going to be running the market until the end of the month anyway Single Stock TraderOn Tuesday Verizon NYSE VZ rose again a bit but on an inverted hammer that formed a bearish stochastic crossover It s definitely not a swing trade buy at this point |
VZ | Friday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Friday lower
ES pivot 2099 58 Holding below is bearish
Next week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ still not a swing trade buy
Recap Foo I thought Mr Market had had enough last night but apparently not as the Dow sank another 76 on Thursday as the buyers continued to sit on their hands Will Friday make them stand up and salute Let s see what the charts have to say about that The technicals The Dow The Dow is now in full on bearish mode with two black crows a bearish RTC trigger and a completed bearish stochastic crossover Last night I wrote that there s nothing technically bullish about this chart and tonight that goes double The VIX Last night I wrote that this chart just looks higher again on Thursday And indeed it was up another 5 66 for a bullish trigger on a descending RTC exit Add in a bullish stochastic crossover and these two white soldiers look ready to march higher still on Friday Market index futures Tonight all three futures are lower at 1 48 AM EDT with ES down 0 07 ES on Thursday did pretty much the same thing as the Dow so my comments above for that go here too And the new overnight isn t doing much to dispel that either ES daily pivot Tonight the ES daily pivot falls again from 2105 67 to 2099 58 So ES remains below its new pivot and this indicator just continues bearish Dollar Index Last night I wrote this one looks lower again on Thursday and indeed it was but just barely with a 0 03 squeaker But this little doji star moved the stochastic closer to a bearish crossover and so this chart still looks bearish to me Euro And on Thursday the euro had a similar doji star as it consolidates at the base of Tuesday s big dump But indicators have finally gone oversold and the stochastic is about to give us a bullish crossover so I d guess this one goes higher on Friday Transportation Last night I figured the Trans had gone about as low as they were going to go and I was wrong On Thursday they were stopped only by their lower BB at 8240 The last time we closed this low was last October 8th And the indicators are still a ways from oversold so with two red marubozus on the record there s still nothing bullish here Thanks Greece Thanks for nothing
Thursday s action only provided bearish confirmation of Wednesday s charts If we didn t get a reversal Thursday I don t think we re going to get one Friday as the charts are looking generally ugly Now Russell rebalancing could conceivably throw a monkey wrench in the works and I d love to see a move higher but I m afraid I m going to have to call Friday lower That s all she wrote See you again Sunday night Single Stock TraderVerizon NYSE VZ was one of only a handful of Dow stocks that managed to rise on Thursday but it was on a red inverted hammer with a bearish stochastic crossover trading outside its rising RTC again for a bearish trigger So VZ remains most definitely not a swing trade buy |
VZ | Tuesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2060 33 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap I know I said I was going to take the rest of the week off after last night but this action was too good or too bad to let pass without comment The Night Owl has seen this before Some deadbeat promises to repay you by the end of the month consolidating everything into one payment Then the end of the month comes along and instead of a check he wants more time Then he s got some excuse where he ll ask a friend and then pay you in five days Uh huh Time to face the facts Jack The Greeks ain t never gonna pay you The Grexit is as good as done The other fact is that none of this will amount to a hill of beans Look in the first week of August 2011 the VIX hit 48 Forty eight And that was because Because Right I can t remember either And back then the Dow was at 11 000 So four years from now no one will remember the Greeks and their 2015 fiscal melodrama Next crisis The technicals The Dow For all the drama of Monday s 350 point swan dive in the Dow it pales compared to the 875 point drubbing the Dow took in January 2014 for example Absurdly overdone IMNSHO In one day the Dow broke support at 17 764 broke through its lower BB and then kept right on going crashing through its 200 day MA stopping only because the bell finally rang at 4 PM That was more than enough to send it oversold and drive the stochastic to a level from which reversals come This chart is looking ripe for a relief rally or at least a DCB The VIX Holy moly On Monday the VIX exploded like a SpaceX shuttle supply rocket gapping up 34 vaulting right over its 200 day MA and trading mostly entirely above its upper BB for its highest close since January 28th Some talking head on CNBC was sniffing that the VIX is still below 20 ignoring the magnitude of the one day delta Anyway give it time Whenever Mr Market goes off his meds like this the one and done rule of the VIX falling after hitting its upper BB is suspended Vicious moves like this seem to have lots of inertia behind them so it s still possible we could see another day or two of moves higher Then watch for the inevitable VIX collapse Market index futures Tonight all three futures are higher at 1 15 AM EDT with ES up 0 23 On Monday ES had the biggest gap down I think I ve ever seen in 10 years hitting 2047 to send the indicators all oversold The stochastic is now moving into position for a bullish crossover but not there yet But the overnight seems to be suggesting some sort of retracement for Tuesday ES daily pivot Tonight the ES daily pivot crashes from 2094 25 to 2060 33 And even after that ES remains below its new pivot so this indicator continues bearish Dollar index The dollar also had an outsized move lower Monday down a big 0 73 though not more than we ve seen multiple times in the past 30 days But it was enough to peak the indicators at overbought and form a bearish stochastic crossover so this chart looks lower for Tuesday Euro Mr Market seemed to cheer the effect of the impending departure of the Greeks from the euro as the currency just rose throughout the day while the rest of the market got pounded It completely retraced a big gap down the day before and then some So after all the noise the euro closed at 1 1265 exactly where it was four days ago But these big one off moves tend to distort the charts so I m not touching this one tonight Transportation On Monday the Trans moved in lockstep with the Dow so everything I wrote there applies here too
Just as the futures pointed the way lower last night at this hour tonight they seem to be suggesting a bounce on Tuesday I note too that the SPX Hi Lo indicator hit 9 on Monday its lowest reading of the year by far These are the levels from which reversals spring The previous low on March 10th was 32 and the next day began an 8 day rally As the markets open and traders discover that the earth is still spinning on its axis we could attract some bargain hunters so I m going to go ahead and call Tuesday higher Of course that could change if the Greek finance minister suddenly announces he s going to play Angela Merkel and the ECB board of governors a round of Texas Hold Em for the Greek debt then all bets are off Single Stock TraderVerizon NYSE VZ went oversold on Monday but there s no telling what s going to happen next so we re just continuing to sit on the sidelines here |
VZ | Wednesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher
ES pivot 2056 75 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap After a giant dive on Monday that I thought was vastly overdone the markets did indeed rebound on Tuesday in a typical DCB At this point I m on semi vacation No charts just the bottom line The technicals ES daily pivot Tonight the S P 500 daily pivot falls again from 2060 33 to 2056 75 That finally puts ES back above its new pivot so this indicator turns bullish
Tonight we re seeing a bunch of good reversal signs in the charts It doesn t hurt that the first of most months is historically bullish too So I m just going to call Wednesday higher Single Stock TraderVerizon NYSE VZ did not participate in Tuesday s rally Look for it to hit its lower BB 46 49 before reversing |
VZ | Monday Lower Blame It On Greece | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 2067 33 Holding below is bearish
Rest of week bias lower technically
Monthly outlook bias lower
Single stock trader VZ not a swing trade buy
Recap Those freakin Greeks As I write on Sunday evening it is apparent that Greece has evidently decided to sow the wind by voting no on their crazy referendum And just as surely they will reap the whirlwind The Grexit is in my view now inevitable I am absolutely astounded at this naked display of unabashed hubris The Greeks are crowing about their dignity but seem to have forgotten that when you re bankrupt the first thing you forfeit is your dignity Hey I ll have to try that next year when my property taxes are due I ll just tell the town I can t pay but I have my dignity so they have a responsibility to share my pain Let s see how far that gets me Perhaps Angela Merkel can loan Mr Tsipras a few euros so he can buy himself a tie Apparently the Greeks would rather go down with their ship and take the rest of the world with them And judging by the futures this evening that s exactly what s going to happen on Monday So there s no point to even bother doing individual charts tonight as Monday s close is already a forgone conclusion This Greek drama is getting rather tiresome Note to Greece would you please just go away The technicals ES daily pivot Tonight the ES daily pivot dips from 2070 00 to 2067 33 And that still leaves us well below the new pivot so this indicator is nwo bearish very bearish
Monday lower obviously But Monday evening should be interesting as there may be some buying opportunities developing later this week Single Stock TraderVerizon Communications NYSE VZ had a small gain last Thursday but it s virtually guaranteed to get swept up in Monday s slaughter so this isn t the time to be buying it |
VZ | VZ Has Upside Potential VIX Looks Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2056 42 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader NYSE VZ now a swing trade buy
Recap
After falling over the edge out the gate Monday morning the Dow quickly recovered the entire loss only to retrace most of it before finally ending just 47 points lower as Mr Market displayed more common sense than he usually does in the face of major crises So that s that Let s see if it s even possible technically with the barrage of contradictory and confusing comments coming from Europe lately where Tuesday might be headed
The Technicals
The Dow After trading above its 200 day MA on Thursday the Dow plunged back below it on Monday only to pop right back up again and finally settle just a few points below it with the mother of all hammers Though we now have two red days in a row they both traded outside the last descending RTC and that s a bullish trigger The indicators remain oversold and the stochastic has completed a bullish crossover So overall I d have to say this chart now looks bullish
The VIX After finding support right on its 200 day MA last Thursday the VIX continued higher on Monday But after hitting the rarefied air around 19 where it petered out twice before in the last 5 days it came right back down to end with a tall dark cloud cover that bounced off its upper BB Indicators remain overbought and we have a completed bearish stochastic crossover so this chart looks lower Tuesday
Market index futures Tonight all three futures are higher at 12 54 AM EDT with ES up 0 31 ES opened Monday way down in fact below its lower BB and right down to its 200 day MA But then it was up up and away from there for a nearly 30 point gain Even at that the indicators are still just barely oversold and the stochastic has just completed a bullish stochastic crossover So with the overnight confirming that this one looks higher for Tuesday
ES daily pivot Tonight the ES daily pivot plummets from 2070 00 to 2056 42 That now leaves ES way above its new pivot so this indicator is quite bullish
Dollar index The dollar took a 0 19 bounce on Monday no doubt as all the Greeks sought refuge for their cash But that drove it to its upper BB and left the indicators just off overbought with a red hanging man This is a pretty good reversal sign so I d not be surprised to see the buck go lower on Tuesday
Euro I m a bit surprised that the euro managed to actually post a gain on Monday given all the Greek drama going on In the overnight it s virtually unchanged but given all the uncertainty around Europe right now I m not touching this one with a ten foot Grecian urn
Transportation The transportation have been in a ragged descending trend since the middle of March one that accelerated after giving up the 200 day MA in mid May The trend is even more pronounced on the monthly chart where you can clearly see the peak in November 2014 But on a monthly basis we are now oversold and that doesn t happen often The last time was September 2011 and a month later the transportation took off on a four month rally In daily terms we ve ricocheted off the lower BB with oversold indicators and a stochastic lying on the floor but gearing up for a bullish crossover So with some clear support established at 8080 I d have to guess the next move is higher
What a difference a day makes Tonight the charts are pretty much in agreement with some good bullish technical signs so I ll just go ahead and call Tuesday higher With the usual caveat about the Greeks of course
Single Stock Trader
VZ ultimately lost only a few pennies Monday with a tall doji star With rising indicators and a completed bullish stochastic crossover this one might go higher Tuesday There seems to be more upside potential than downside risk at the moment modulo the Greeks |
XOM | S P issues negative outlook on Exxon citing weak credit measures | Exxon Mobil s NYSE XOM outlook is revised to negative from stable at S P saying the company has not reduced debt levels as fast as expected XOM has reduced capital spending for the past two years but continued to raise its dividend leading to large discretionary cash flow deficits and an uptick in debt S P writes S P affirms XOM s AA plus credit rating the second highest from the top but a negative outlook suggests the company could be downgraded in the next year or so S P also revises Imperial Oil s NYSEMKT IMO outlook to negative from stable following similar action on its XOM parent Now read |
XOM | Exxon CEO Woods urges Trump to back Paris climate accord | Exxon Mobil XOM 0 1 CEO Darren Woods has written a personal letter to Pres Trump urging him to keep the U S in the Paris global climate agreement XOM already has announced its support for the agreement but Woods who took over as CEO at the start of the year is making a last ditch plea as administration officials argue over the U S position Woods argues that staying in the accord will mean the U S keeps a seat at the negotiating table to ensure a level playing field for all energy sources and can argue for the most cost effective greenhouse gas reduction options Yesterday 22 Republican senators sent a letter to Trump calling for the U S to pull out of the deal Now read |
XOM | Exxon CEO likely to join St Petersburg forum | Exxon Mobil NYSE XOM CEO Darren Woods is expected to attend the St Petersburg International Economic Forum this week where Russian President Vladimir Putin will deliver the keynote speech A meeting between the two is possible sources told Reuters Wood s predecessor Rex Tillerson appeared at last year s forum having stayed away for two years over Russia s intervention in Ukraine Now read |
XOM | Oil Search to farm in to Exxon Papua New Guinea licenses | Oil Search OTCPK OISHF has purchased 30 interest in each of five permits in the Papua New Guinea eastern Foldbelt that Exxon Mobil NYSE XOM had acquired via its purchase of InterOil earlier this year financial terms are not disclosed The permits are near the Elk Antelope fields in PRL 15 in which Oil Search and XOM are joint venture participants along with operator Total NYSE TOT three of the five permits in the farm in deal contain recent gas discoveries Oil Search will carry out a seismic acquisition program which is set to take place throughout the remainder of this year and into early 2018 Now read |
XOM | Oil Price Increase May Trigger Shale Plays Development | In this report we consider studying the personal composite instrument PCI Exxon Mobil stocks against Brent It may increase in case Exxon Mobil NYSE XOM stocks growth outpaces the Brent oil prices
In 2016 the oil service producer Exxon Mobil reported its lowest earnings in 20 years and had to white off some assets Given low oil prices the development of some of the company s plays may also be deemed unprofitable For this reason the company s stocks slumped 9 3 since early 2017 Exxon Mobil makes part of Dow Jones Industrial Average index which rose 5 since the start of this year
The main reason for such negative performance is that investors worry that the company will have to write off the additional part of its assets Besides the Canada s stockpiles of 3 6bn barrels Exxon Mobil holds shale oil stockpiles of 6bn barrels in the Permian Basin in the US state of Texas Meanwhile as mentioned previously the development of shale plays may be profitable with WTI price at 50 55 a barrel The level is closed to the current prices which may negatively affect the operating performance of Exxon Mobil
The global oil prices have potential for further increase OPEC and Goldman Sachs forecast the significant decline in global stocks in 2nd quarter of 2017 They believe the main reason for that may be quick fulfillment of OPEC and independent oil producers agreement to cut oil production by 1 8mln barrels a day since January 1 2017 According to the most recent data the agreement is implemented by 90 already The additional positive for Exxon Mobil may come if Rex Tillerson is appointed as secretary of state under Trump s presidency Rex Tillerson has been serving in the capacity of the company for more than 40 years
On the daily chart XOM BRENT D1 has hit a fresh 17 month low having approached the lower boundary of the descending channel Upward correction is possible in case Exxon Mobil stocks perform better than Brent oil
The Parabolic indicator gives bullish signal
The Bollinger bands have narrowed which means lower volatility
The is below 50 It has formed positive divergence
The is giving bullish signals
The bullish momentum may develop in case XOM BRENT surpasses the two last fractal highs at 0 68 This level may serve the point of entry The initial stop loss may be placed below the last fractal low the 17 month low and the Parabolic signal at 0 64 Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals
Thus we are changing the probable profit loss ratio to the breakeven point The most risk averse traders may switch to the 4 hour chart after the trade and place there a stop loss moving it in the direction of the trade If the price meets the stop loss level at 0 64 without reaching the order at 0 68 we recommend cancelling the position the market sustains internal changes which were not taken into account
Summary of technical analysis
Position BuyBuy stop above 0 68Stop loss below 0 64 |
XOM | Bullish European Equities Advancing Dollar | The Federal Reserve s latest meeting minutes were released yesterday The minutes showed that given the encouraging economic data as well as possible Trump inspired fiscal stimulus the Fed should raise interest rates fairly soon
The market already had a hawkish sentiment on a rate hike in March Fed chair Janet Yellen announced last week that it would be unwise to wait too long before raising rates
The dollar climbed after the positive tones from the Fed s meeting minutes EURUSD is trading down at 1 055 The dollar is rising against all major currencies
Bullish tones end there for the US as equities cut some of the gains made last week
S P 500 is down 0 04 trading at 2361 00
DJ 30 is down 0 03 trading at 20754
Russell 2000 is down 0 04 at 1402 80
The market sentiment is more positive in Europe however the European proxy the is trading upwards 0 02 at 12008 00 The CAC 40 is trading higher at 4905 50 The rally comes after encouraging economic data in the Eurozone region
Commodities Corner
Crude oil is caught in an upswing trading at 54 41 up 1 January s production showed that OPEC members complied to 90 of planned output cuts
Additionally Exxon Mobil NYSE XOM cuts have helped to push up the price of oil The company s output fell by one fifth last year which is the largest International oil company production drop in the last decade
Gold is trading upwards at 1237 54 an increase of 0 08
Market Watchlist
In the UK FTSE 100 is being elevated by RSA Insurance and Inti both surpassing earning expectations The companies have pushed up the UK s economic proxy The FTSE 100 is up 0 2 trading at 7284 50 |
VZ | Global Bond Yields Rise As Investor s Prepare For Lift Off | A speculator is a man who observes the future and acts before it occurs
Bernard M Baruch
Speculate invest in stocks property or other ventures in the hope of gain but with the risk of loss The world is coming to an end No doubt about it I am not even going to delve into the advance of ISIS in nearly every country of the paradise known as the Middle East Nope Let s concentrate on what really matters to the citizens of the globe You got it that is right the crucial variable we all have to pay attention to and that is the interest rate on the 10 Year Treasury Bond It shattered the astronomical rate of 2 39 yesterday closing at a demanding 2 40 If you really want to expand your universe add in the interest rate on the 10 Year German bund sitting at a whopping 85 oh my gosh Yes sirree whatever will we do now Pardon my sarcasm but in the financial world these are actually some of the thoughts which are reflected in actions of investors who believe interest rates are headed to 20 Clearly they forget about the first grade math number line where there are a few places between 2 and 20 unless my teacher had it wrong Whoops She had it right Just checked with my daughter Anyway when the May jobs report came in at 280 000 jobs yesterday it was confirmation for many that the economy is strong and the due date for interest rate lift off will be September As such the sell off on Thursday was validated at least for those who sold Gazing into the crystal ball most analysts would pontificate a stronger dollar when investors front run the fed No they wouldn t do that would they Of course they would For oil with a fully stocked world and production running non stop the premonition prices are headed back to 100 a barrel any time soon is probably a fantasy Still rig counts have been chopped a ton so at some point production numbers at least in the U S are going to start falling How soon and how much remains to be seen Store that in your hard drive for further consideration With respect to gold hard to see how all that glitters is going to jump if interest rates start levitating Don t forget all of this is based on the idea interest rates are going to the moon Oh yes absent mindedly I almost neglected the stock market My attention span is not as good as it once was When you turn 48 things get hazy Anyway equities have run into a slumbering patch over the last few weeks As usual summer volumes are slight as the well heeled are too busy in the Hamptons to be bothered Much concern remains around valuations especially in any frothy areas like biotechnology internet security social networking or pre public behemoths When Snapchat founder Evan Spiegel starts telling people things are out of whack well it is like Moses coming down from the mountain Lest Mr Spiegel forget who the current environment favors the most Hint hint Evan look in the mirror Overall in most areas of the market with interest rates climbing to the exorbitant levels of maybe 3 by the end of the year to pay 18x forward earnings is probably not unreasonable Shhhh don t tell Moses err Mr Spiegel In others news this week the onslaught of merger and acquisition activity continues with no letup It seems like every day a new deal gets announced Word came down this week Dish Networks and T Mobile NYSE TMUS are talking about doing the deed Such a combination makes perfect sense because T Mobile needs capacity and Dish needs well customers for their treasure trove of yup spectrum The CEO s of both companies are noted rebels so such a pairing would at the very least prove entertaining Still with Verizon NYSE VZ and AT T NYSE T probably going nowhere any time soon the competition in this domain is formidable to say the least Greece remains a thorn in the side of investors as it s leadership trys to get the ECB to adopt a Greek alternative to a bridge loan June is probably the point of no return for the conflict as Greece cannot pay it s obligations based on it s current liquidity state For the rest of the world we are forced to pay attention to an entity which is does not deserve our gaze Which is just how the Greeks like it I suspect Elsewhere markets in China continue to skyrocket and skeptics point to those indexes as proof bubbles are forming No less an authority like John Malone commented this week that Central banks and cheap money is fueling much of the race to acquire assets or speculate Mr Malone brought up you might as well go to Las Vegas and take a shot With the Belmont being run in a few hours today I am confident plenty of people will do just that I already live in Las Vegas so the speculative fever is just as common in this town as it is in financial markets Imagine that Disclaimer Y H C Investments Yale Bock and the family of Yale Bock own positions in securities mentioned in the blog post Investing in stocks can lead to the complete loss of your capital As always on any company mentioned here past performance is not a guarantee of future returns Investing involves risk of losses on invested capital One should research any investment and make sure it is suitable with your objectives risk tolerance risk profile liquidity considerations tax situation and anything else pertinent to your financial situation Also the CFA credential in no way implies investment returns will be superior for any charter holder |
VZ | Monday Depened On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Friday depends on ES pivot
ES pivot 2092 83 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ now a swing trade buy
Recap After a brief attempt to break above its pivot at 3 AM last Friday ES never threatened again and the market closed lower as I had predicted with my patented conditional call A Friday close lower is a bearish sign and a subsequent Monday close lower would confirm it So let s figure out if that s going to happen pronto The technicals The Dow The Dow has now been falling basically for two weeks and it finally hit its lower BB on Friday with a stubby red spinning top that left the indicators oversold though not wilding so That s a reversal sign in my book but one which requires confirmation falling knife etc The VIX Last Thursday night I wrote that 200 MA touches usually mark tops for the VIX and this time doesn t look any different And that was true with the VIX falling 3 4 on Friday on a tall red bearish engulfing pattern after making one last stab at its 200 day MA And that gave us one of those unusual cases where the VIX and the market were both down the same day It was also enough to drive the stochastic lower so overall I d say the VIX looks lower again on Monday Market index futures Tonight all three futures are lower at 12 34 AM EDT with ES down 0 06 On Friday ES gave us a far red spinning top that tested its lower BB and drove the indicators oversold The Sunday overnight is doing pretty much the same with a second unsuccessful test of the BB so there seems to be an attempt at bottoming here Whether or not its successful remains to be seen as this sort of action requires confirmation particularly given the general weakness of the paste two weeks ES daily pivot Tonight the ES daily pivot falls again from 2102 25 to 2092 83 That still leaves ES below its new pivot so this indicator continues bearish Dollar Index As might be expected the dollar shot up nearly a percent on Friday to bust out of its descending RTC with a bullish setup form a bullish stochastic crossover and cause the indicators to bottom at oversold That all points to more upside Monday Euro And just reverse everything above for the euro which is now looking lower again for Monday Transportation And finally on Friday the trans gave us a bit of bullish divergence by rising a hefty 0 86 on a day the Dow and SPX were both down The resulting bullish engulfing candle keeps them in a rising RTC though the indicators have begun moving lower just before reaching overbought And with the trans sitting right on three day resistance now it s not clear they have enough gas in the tank to move higher Monday
Much like last Thursday night ES is once again sitting just below its daily pivot with a number of reversal signs present in the other charts That makes tonight another candidate for a conditional call If ES can break above its pivot by mid morning Monday we ll close higher If not we close lower Single Stock TraderOK I was wrong Just when I thought Verizon Communications Inc NYSE VZ couldn t go any lower it did plunging another nearly 2 on Friday Holy moly RSI has now hit the big Z that s zero zilch nil nada the square root of nothing The last time RSI was this low well it isn t even on my chart It traded entirely below its lower BB If this doesn t dive any further Monday morning I m in |
VZ | Tuesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2082 58 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ still a swing trade buy
Recap I guess just hitting the lower BB isn t always the panacea as Monday proved The Dow sank another 0 46 on another red marubozu again trading mostly below its lower BB Things are looking pretty grim right about now but the current decline is still less than what we got back in early March Is there a reversal in out future Only the charts can say The technicals The Dow The Dow finished right on session lows Monday and with three black crows it ain t looking good Indicators are now oversold but not extremely so So there s really nothing technically bullish about this chart The VIX And the VIX really surprised me on Monday Instead of moving lower it jumped nearly 8 to close above its 200 day MA So much for the big bearish engulfing pattern However in its stead we now have a big dark cloud cover plus overbought indicators Usually when the VIX gets overbought like this it s headed lower So I still think we re due for some relief here Market index futures Tonight all three futures are finally higher at 12 46 AM EDT with ES up 0 08 On Monday ES extended it losing streak to three remaining in a steep descending RTC and punching right through its lower BB and leaving the indicators all oversold That all looks bad The only ray of hope is that ES is actually rising in the overnight the first time we ve seen that in several days now suggesting that maybe bargain hunters are stepping up to the table ES daily pivot Tonight the ES daily pivot falls again from 2092 83 to 2082 58 And even that still leaves ES below its new pivot so this indicator continues bearish Dollar index I also missed the dollar on Monday which instead of moving higher just collapsed giving up all of Friday s gains and then some Indicators aren t even oversold yet so it s too early to call a move higher from here Euro And so of course I was also wrong about the euro which instead of moving lower posted a big gain all the way back to 1 1278 on Monday on a big bullish engulfing pattern But indicators remain quite overbought and the euro is now at weekly resistance so it s not clear it can sustain this momentum into Tuesday Transportation Last night I was reluctant to call the Trans higher Monday because it s not clear they have enough gas in the tank to move higher Monday And holy moly the tank was on E as the trans fell a giant 2 06 Monday dropping right out of their rising RTC for a bearish setup forming a bearish stochastic crossover and sending the indicators lower That all looks bad for Tuesday
We re starting to see some technical signs that the selling may be abating particularly in the futures and the VIX I ll also note that the Morningstar Market Fair Value Index has now hit 1 00 indicating a lot of foam has come out of the market The last time we were at this level as May 6th and the next day began a two day rally But we remain in a long downtrend and the Dow chart is pretty ugly right now So I m just going to go out on a limb cover my eyes and call Tuesday higher Single Stock TraderLast night I blessed Verizon NYSE VZ as a swing buy and it did indeed move higher on Monday with a green spinning top that suggests bottoming And after that it still looks like a reasonable entry point |
VZ | Wednesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher
ES pivot 2077 83 Holding above is bullish
Rest of week bias higher technically
Monthly outlook bias lower
Single stock trader VZ still a swing trade buy
Recap These counter trend calls are always risky and I acknowledged that last night calling Tuesday higher And it almost worked too but for yet another late afternoon sell off that ended with the Dow down all of two and a half points Still that beats the recent triple digit losses we ve been getting Does this mean a reversal is at hand We scour the charts for clues The technicals The Dow On Tuesday the Dow continued its skid down the lower BB but unlike the past two days it ended with a perfect doji star Along with indicators quite oversold and a very low stochastic about to form a bullish crossover indicators I give this better than even odds of being a valid reversal sign The VIX Last night I wrote that I still think we re due for some relief here And it sure arrived in the form of a 5 36 drop in the VIX on Tuesday and some bullish divergence for the market I always say that the VIX tends to retreat after hitting its upper BB and this was no exception One day after closing above it and boom down we went So with indicators still overbought there s no reason to believe the VIX selling is done yet Market index futures Tonight all three futures are finally higher at 12 40 AM EDT with ES up 0 13 On Tuesday ES put in a tall doji star trading entirely below the lower BB at the lower end of Monday s big dump Indicators remain oversold and the stochastic has just made a bullish crossover so I d hazard we go higher on Wednesday ES daily pivot Tonight the ES daily pivot falls again from 2082 58 to 2077 83 That drop plus and overnight rise in ES finally puts it back above its new pivot so this indicator now turns bullish Dollar index Last night I wouldn t commit to a higher dollar Tuesday and it was just as well as the buck sank another 0 16 The only things to suggest a reversal at this point are oversold indicators and being near support Euro Last night I wrote that it s not clear the euro can sustain this momentum into Tuesday And indeed it couldn t ending where it began with a perfect doji star So now we have resistance and a reversal sign I d still not be going long the euro here Transportation They were making all sorts of noise over on CNBC today about the dismal state of the Trans and rightly so IMAO Last night I pointed out a bunch of stuff that all looks bad for Tuesday And it wasn t a disaster but the Trans still moved another 0 33 lower And if you back out to the monthly chart you ll see that the Trans peaked way back last November and has been in a downtrend ever since This is part of the reason why I switched my TickerSense monthly SPX direction poll from bullish to bearish two weeks ago Even short term doesn t look that good we have a hammer but also a completed bearish stochastic crossover and falling indicators
Tuesday had the feeling of a washout low Also the Morningstar Market Fair Value Index has hit 0 99 for the first time since last December 15th and that marked a bottom We have some decent reversal signs on the charts tonight so I m going to go ahead again and call Wednesday higher Single Stock TraderOn Tuesday Verizon NYSE VZ lost a bit on a dark cloud cover but overall it looks like it still has much more upside potential than downside risk remaining quite oversold |
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