Friday, October 24, 2014

Friday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday lower, low confidence.
  • ES pivot 1941.50.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

Well I sure wasn't expecting a 217 point pop in the Dow on Thursday (having called it lower).  I think Mr. Market is just in one of his manic phases where the technicals don't count for much.

The technicals

The Dow: Defying all reason, popped right back above its 200 day MA keeping the indicators rising and still not overbought.  And back into the rising RTC.  So now looks positive.

The VIX:  So much for bullish engulfing.  All we know is the VIX has good support at 16.07.  Stochastic curving around for a bullish crossover and the trade was outside the descending RTC for a bullish trigger, so technically this one's higher.

Market index futures: Tonight all three futures are significantly lower at 12:16 AM EDT with ES down 0.42%.  ES had a good day Thursday but the new overnight is now falling out of the rising RTC for a bearish setup.  That has also given us a completed bearish stochastic crossover.  With highly overbought indicators, this one looks lower.

ES daily pivot: Tonight the ES daily pivot jumps from 1929.67 to 1941.50.  That now puts us back below the new pivot so this indicator turns bearish.

Dollar index:  A new rising RTC here but near resistance.  Too tough to call.

Euro: Small doji star Thursday and oversold indicators warn of a short-term bottom here.

Transportation:  A big 2.10% pop on Thursday belies overbought indicators and a stochastic very close to a bearish crossover.  Resistance strong at 8488.  My guess is lower Friday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 August     8       7      2           2       0.588     81 September  6       6      5           2       0.571    376 October    5       6      3           1       0.500     76

     And the winner is...

If I had any sense I'd just call Friday uncertain, but instead I'll call Friday lower.  There are just too many bearish technical signs on the charts now to do anything else.  That's all, she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.

Thursday, October 23, 2014

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 1929.67.  Holding below is bearish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

Well I am certainly glad I called Wednesday as uncertain because of the odd way things turned out.  While it is certainly tragic for anyone to get shot on the job in Canada, and I don't mean to sound cold about it, but it doesn't seem to warrant a nearly full percent drop in the Dow.  Or blame it on AT&T earnings but Mr. Market sure seems to be be a nervous Nellie.  Will he find his Valium stash in time for Thursday?  Let's check it out, as they say down at the public library.

The technicals

The Dow: It wasn't quite the doji I envisioned, but the Dow was indeed unable to press forward on Wednesday and after breaking above its 200 day MA Tuesday it just folded with a big bearish dark cloud cover to collapse right back below it.  That was also good for a rising RTC bearish setup. even though we're still not quite yet overbought.  Either way, this one no longer looks bullish..

The VIX:  It didn' take much to spook Mr. Market with the VIX jumping 11.13% Tuesday just as it seemed ready to visit its 200 day MA.  The resulting bullish engulfing candle now makes this chart look bullish.  Oh and a bullish exit of a descending RTC too..

Market index futures: Tonight the futures are mixed  at 12:20 AM EDT with ES up 0.04% but NQ down 0.03%. ES put in a dark cloud coverish affair on Wednesday with overbought indicators and its stochastic is now curving around preparing for a bearish crossover.  Wednesday felt like it took the wind out of ES's sails though we do remain in a rising RTC for now at least.

ES daily pivot: Tonight the ES daily pivot ticks up from 1921.17 to 1929.67.  We've now crossed under the new pivot so this indicator turns bearish.

Dollar index:  Big gap-up breakout here on Wednesday right up to resistance.  But with indicators not yet overbought, more upside possible.

Euro: Last night I wrote that the euro  "looks lower Wednesday" and so it was, falling back to 1.2648, in a month-long congestion zone.  But with indicators still not yet oversold and no reversal candle, more lower here still possible.

Transportation: Tuesday's resistance was the key to Wednesday's trans as they sank over 2%.  Also hit oversold, also exited the rising RTC for a bearish setup, also the stochastic is now near s bearish crossover, all of which makes this chart now suddenly look negative.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 August     8       7      2           2       0.588     81 September  6       6      5           2       0.571    376 October    5       5      4           1       0.545    293

     And the winner is...

This is a difficult call because it's hard to tell how much of Wednesday's decline was technical and how much was knee-jerk news reaction.  I guess in the absence of any better information, I'm just going to have to once again go out on a limb and call Thursday lower.  I'll be happy to be proven wrong.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.

Wednesday, October 22, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 1921.17.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

It's a shame I didn't call the market higher for Tuesday  since ir put in a great performance on some good earnings numbers.  Oh well - nothing ventured, nothing lost.  So with that out of the way, and my PC still holding up, let's move right along to Wednesday.  Chart 'em up!

The technicals

The Dow:  The Dow had a great day Tuesday, gaining 215 points on a solid green marubozu that rejected Monday's hanging man and still had enough oomph to push right through its 200 day MA into the close..New steep rising RTC in place, rising indicators, still not overbought, all spells continued bullish.

The VIX: As expected, the VIX fell again Tuesday, down another 13.41% on a gap-down marubozu.. Still not oversold, steep falling RTC in place and no support til 200 day MA at 13.96.  All bearish.

Market index futures: Tonight all three futures are lower at 12:17 AM EDT with ES down  0.05%.  

ES daily pivot: Tonight the ES daily pivot ticks up from 1892.25 to 1921.17.  Still above so still bullish.  ES had a great day Tuesday and is now overbought  Does it pack the gear to continue higher Wednesday?  Hard to tell.  A pause may be on tap.

Dollar index:  As expected, sideways motion on Tuesday - more in sight.

Euro: Unable to break resistance at 1.2817, the euro is sagging again and looks lower Wednesday.

Transportation: The trans are on a monster roll, now 6 for 6 with a huge 3.14% (that's pi!) green marubozu on Tuesday. They're finally hit overbought though as well as resistance at 8494 so after such a nice run I'd expect a pause or some profit taking here.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132

July       6       4      4           3       0.692    639
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376
October    5       5      3           1       0.545    293

     And the winner is...

With nary a bearish sign in sight, I certainly can't call a  reversal lower here yet.  We're not even getting any warning signs.  Still, I'm feeling that after such a  big run as we've seen the last three days, Mr. Market may be due for a rest.  I'm going to guess we see some sort of doji day on Wednesday.  Accordingly, I have to call Wednesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.

Tuesday, October 21, 2014

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1892.25.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

More computer troubles tonight - .  I bought new RAM for my PC on Monday, but despite my best efforts, it didn't work.  The machine refused to even produce a BIOS screen with it, so it's back to the old buggy RM until I figure this out.  And so it's another abbreviated Night Owl as there's just no telling when the whole thing will suddenly lock up.

Meanwhile, back in Marketland, we had a pretty good day Monday.  Even the Dow, dragged down by some IBM numbers not to Mr. Market's liking, managed to end in the green.  So what does this bode for Tuesday.  Let's take a quick look.

The technicals

The Dow:  Small hanging man - bearish warning but needs confirmation.  Trade was a bullish RTC trigger and indicators now rising off oversold is bullish.

The VIX:  Big 15.55% drop Monday disconfirming Friday's spinning top..Falling indicators, just off overbought, back under 20, bearish trigger on rising RTC exit - no reversal signs yet.

Market index futures: Tonight all three futures are lower at 12:32 AM EDT with ES down  0.34%.   Nice, if small, green candle entirely above Friday's for a two white soldiers pattern.  Also broke back above the 200 day MA - bullish.  All indicators now rising steadily off oversold - also bullish.. But - overnight fading and forming a dark cloud cover.

ES daily pivot: Tonight the ES daily pivot ticks up from 1874.58 to 1892.25.  Still above, so bullish.

Dollar index:  Looks like continued sideways here.

Euro: Same here - recent advance seems to be petering out with resistance at 1.2834.

Transportation: Very nice five day run now.  Bullish RTC trigger, back above 200 day MA and steadily rising indicators - all bullish.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 August     8       7      2           2       0.588     81 September  6       6      5           2       0.571    376 October    5       5      2           1       0.545    293

     And the winner is...

Most signs are looking bullish tonight but I'm not liking the futures action at the moment.  A lot will depend on continuing earnings on Tuesday.  Accordingly, we call Tuesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.

Monday, October 20, 2014

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher, low confidence..
  • ES pivot 1874.58.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

Friday was a wild ride on the Street as we finally got the payoff I'd been expecting after two days of major reversal hammers.  Let's quickly move on to Monday because the Night Owl's computer is very sick with some bad RAM and it's crashing at unpredictable intervals (this would happen on a weekend).  So I have to type quick until I can get some new memory for the old beast on Monday.

The technicals

Canceled due to HW issues.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
 
July       6       4      4           3       0.692    639
August     8       7      2           2       0.588     81 
September  6       6      5           2       0.571    376  
October    4       5      2           1       0.500    274

     And the winner is...

I hope the machine stays up long enough for me to say that I'm calling Monday higher.  Hopefully tomorrow we'll have some new RAM in here and be back to normal.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside - I am by policy boycotting the market until the VIX goes back below 20.

Friday, October 17, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence..
  • ES pivot 1845.17.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

Thursday provided us with sort of a mini-rerun of Wednesday as the Dow continued to plumb the depths looking for a bottom.  And even thought he Dow ended down a bit both the Nasdaq and SPX managed to post minor gains (that still felt like victories).  So now we move on to the scariest day of the year, October op-ex Friday.  Boo!

The technicals

The Dow: The Dow ended Thursday down just 0.15% with a nice harami hammer to Wednesday' big brother.  With a higher low and right on the edge of the descending RTC, this is an encouraging sign.  OTOH, look what's coming: according to the Stock Traders' Almanac, this Friday was down six in a row from 2006-2010 and it's close to the infamous October massacre when the Dow imploded for a 22.6% one day loss on October 19th, 1987.  Still, with indicators remaining oversold and a completed bullish stochastic crossover, this chart looks like it's got more upside potential than downside risk.

The VIX: Last night I wrote "the VIX is ready for a fall" (though I'll admit I equivocated a bit) and sure enough on Thursday it came back 4% to 25.2.  It's now only in low-earth orbit rather than interstellar space.  But with a tall red bearish engulfing candle confirming Wednesday's tall doji, a completed bearish stochastic crossover and indicators remaining highly overbought, it looks like there's still a lot more downside available here.

Market index futures: Tonight all three futures are higher at 12: 14 AM EDT with ES up 0.28%.  After Wednesday's giant hammer, on Thursday ES gave us a long-legged doji for two reversal signs in a row.  Indicators remain pretty oversold and the stochastic has completed a bullish crossover.  The overnight (so far at least) seems to be confirming that with a decent gap-up.  It's also exiting the latest descending RTC for a bullish setup.  So despite all the Chicken Littles around, I've got to believe we're not looking at more triple digit declines on Friday.

ES daily pivot: Tonight the ES daily pivot dips from 1847.67 to 1845.17.  That still leaves us above the new pivot so this indicator remains bullish.

Dollar index:  The dollar continues to be a political football with technicals taking a back seat.  Thursday's 0.23% loss confirmed Wednesday's hanging man, but I'm not making anything out of this.  This one can go anywhere on Friday.

Euro: On Thursday the euro exited a descending RTC all the way back to July 2nd for a bullish setup after bottoming on 10/3.  Despite a small hanging man and overbought indicators, I think there's still higher to come here.

Transportation: For the third day in a row the trans outperformed the Dow in a big way with a 1.12% gain on Thursday that sealed the 200 day MA breakout and exited the descending RTC for a bullish trigger. The trans downtrend is now officially over.  And with indicators remaining oversold and a bullish stochastic crossover in full force, we're not done going higher here.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 August     8       7      2           2       0.588     81 September  6       6      5           2       0.571    376 October    3       5      2           1       0.444     11

     And the winner is...

Friday is op-ex day, with all the usual machinations that entails.  If I had any sense, I'd just call it uncertain and go home.  But I'm seeing a pretty decent continuation of the bullish reversal signs from Wednesday in the charts tonight.  And the SPX Hi-Lo indicator has now hit zero, which means it's got nowhere to go but up from here.  So I'm going to go out on a limb and call Friday higher, assuming it doesn't get sawn off on me by the ECB, the Greeks, the Ukraine, Ebola, angry Hong Kongers, the Middle East Head Choppers Society, falling oil, und so weiter.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside - I am by policy boycotting the market until the VIX goes back below 20.

Thursday, October 16, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence..
  • ES pivot 1847.67.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Recap

Holy moly!  Mr. Market has just gone stark raving bonkers, completely off the rails.  The talking heads on CNBC were all in a dither on Wednesday.  It's the end of QE.  It's Ebola (which is Alobe spelled backwards).  It's not QE.  It's Germany.  It's Greece (for what, the fourth time?).  Hey, it's exaggerated.  We got some interesting charts tonight for sure though so pull up a seat, break out the popcorn and let's get munching on Thursday.

The technicals

The Dow:  Wow, I sure picked an even worse day to be wrong (again) with the Dow down a massive 460 points at its low to finish "only" 173 points lower.  On Wednesday the Dow appeared to be in free-fall until just after lunch, at which point some traders noticed that the sun was still up in the sky and the earth was still turning, and started buying.  The net result was a giant hammer exiting off the left side of the descending RTC (a bullish sign), very oversold indicators and a bullish stochastic crossover.  That all looks like a bullish reversal to me.  But with the VIX somewhere out in low-earth orbit, who the heck knows.

The VIX:  Earth to VIX!.  You're cleared for re-entry!  With the VIX spiking to just over 31, a level not seen since, uh, the Middle Ages, it put in a perfect doji star on Wednesday that was still a 15% gap-up pop.  Yowsa!  The indicators are now all quite overbought and the stochastic is curving around for a bearish crossover, but the lessons of summer 2011 show that when the VIX gets this irrational, it can stay that way for months on end.  So while technically it may look like the VIX is ready for a fall, I'm now going to require confirmation first.  Seeing is believing.  So there!  Nyah!

Market index futures: Tonight all three futures are higher at 12:16 AM EDT with ES up 0.32%.  ES had a huge move with a big hammer on Wednesday like everything else that looks an awful lot like capitulation.  With indicators remaining oversold and a bullish stochastic crossover in place, an no further losses in the overnight, I'd have to guess that maybe, just maybe, this chart is ready to turn around.

ES daily pivot: Tonight the ES daily pivot plummets from 1877.42 to 1847.67.  But tonight we're finally above the new pivot, thanks to a combination of that big drop and a rising ES overnight.  So this indicator is now back to bullish.

Dollar index:  Huh - so much for Tuesday's big bullish tri-star.  On Wednesday, the dollar took a 0.81% dump on a big hanging mannish thing (it should come after a trend, which we don't have right now).  That curved the stochastic around for a bearish crossover but even with this big move, this chart remains too tough for me.

Euro: I had the sense to stay away from the euro last night and it was just as well since I wasn't expecting a big jump to 1.2781 o Wednesday.  That was good for a bullish stochastic crossover and we're seeing positive pin action int he overnight so now I'm saying there's more upside to come on Thursday.

Transportation: Dow Theorists take note - in a second day of bullish divergence, the trans gained an impressive  0.23% on a day that everything else on the planet was getting hammered. In fact they exited an 8 day descending RTC for a bullish setup with oversold indicators and a completed bullish stochastic crossover.   They also held on to Tuesday's breakout above their 200 day MA.  This all spells higher in my book.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
    64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132

July       6       4      4           3       0.692    639
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376
October    3       5      2           1       0.444     11

     And the winner is...

I notice that TLT put in a monster inverted hammer at the end of a big run-up on Wednesday, a bullish sign.  OTOH, Dr. Copper remains in the toilet, and for the foreseeable future.  But we've now got some pretty good reversal signs on the charts involving giant hammers and those are among the highest probability candles.  But we've also got a VIX now at 26.25, a level I'd classify as "moderately schizophrenic" and just short of "armed and dangerous".

What to do?  Well since we're getting such wild swings lately, and with the futures looking higher, it might be worth a shot to call Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside - I am by policy boycotting the market until the VIX goes back below 20.