Friday, October 31, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence..
  • ES pivot 1980.58.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well my computer upgrade took a day longer than planned but in the end it was worth it.  I now have a more stable and robust system than before.  In the meantime, we missed a few interesting market gyrations but that's the way it goes sometimes.  Now let's see if the market will close out the spooky month of October with a treat or a trick.

The technicals

The Dow: The Dow had a great day Thursday (admittedly largely to a big pop in V) and remains in a now two-week long rising RTC and nearly hitting its upper BB.  Indicators remain broken overbought.  I think there's still some room left here to touch the upper BB Friday.

The VIX:  the VIX dropped 4.16% Thursday with a bearish engulfing candle but continues to find support at the 200 day MA at14.07.  With no clear trend here, more sideways action seem to be in order.

Market index futures: Tonight all three futures are higher at 12:32 AM EDT with ES up 0.13%.  ES had a good day Thursday with a big green candle that disconfirmed Wednesday's spinning top to remain in a rising RTC.  The overnight continues higher and it looks like ES wants to visit its upper BB at 2016, maybe early next week.

ES daily pivot: Tonight the ES daily pivot ticks up from 1973.33 to 1980.58.  We remain comfortably above the new pivot so this indicator remains bullish.

Dollar index:  On Thursday the dollar had a gap-up pop to just ding its upper BB and start 2/3 of an evening star.  With overbought indicators and nearby resistance, I don't think the dollar has much more gas in the tank here.

Euro: The euro has resumed its slow march lower with another drop to1.2616, just touching its lower BB on Friday intraday.  The overnight is continuing lower so it doesn't look very good for the euro on Friday.

Transportation: In a second day of bearish divergence, the trans lost 0.96% on a day the rest of the market did great. After touching its upper BB we now have two hanging men in a row, q bearish stochastic crossover and an exit of the rising RTC for a bearish setup so this chart looks continued 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...

With Russell rebalancing Friday, it's sure to be a wild ride and anything could happen.  But the last day of October is historically fairly bullish and I'm not seeing much bearish on the charts with the lone exception of the trans, so I'm going to risk it and call Friday higher.  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 30, 2014

Update

Just a quick update tonight.  My main PC is now back and running better than ever.  I now have four times the disk space, faster drives, and a RAID-1 array which is good insurance against a drive failure.

The bad news is that it took a lot longer than expected, partly because they didn't even start working on it until Tuesday afternoon.  Then we learned I needed a new power supply.  Then we found that the fan on the graphics card was dead.  Finding a new fan proved to be easier than a new graphics card, since I'm running dual DVI displays and for some unknown reason, all the new cards now come with only one DVI and one HDMI port.

Bottom line, I didn't get any work done on Wednesday.  Normal publication of The Night Owl resumes Thursday evening.

Monday, October 27, 2014

Upgrades

The Night Owl is down while my PC is in the shop getting a major upgrade (we're going to an all RAID setup with new much larger and faster disks).  So I'm afraid tonight's post is canceled.

And since I always call Fed days as "uncertain" out of policy, I may not post Tuesday night either.  I'm not expecting too much action Tuesday anyway so it seems like a good time to do this.

Either way, we should be back to the normal schedule by Wednesday night.  Happy trading!

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher, low confidence.
  • ES pivot 1950.92.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Last Thursday's break back up over the 200 day MA was all the Dow needed to post a 128 point advance on Friday, despite what looked like a fair number of bearish signs to me.  As the spooky month of October enters its final week, we'll try to redeem ourselves by getting Monday right.

The technicals

The Dow: The Dow last Friday was completely uninterested in the overbought indicators or the incipient bearish stochastic crossover as it simply kept going higher.  We remain in a rising RTC and the upper BB is still along way off.  So now I'm going to ignore the overbought indicators as hazard a guess that there's still more upside available here, especially in the absence of a reversal candle..

The VIX: On Friday the VIX fell another 2.54% on an inverted hammer but support around .16.15 held.  With indicators remaining quit oversold and the stochastic flat on the floor with nowhere to go but up, it still seems to me like the next move here is likely higher than lower.

Market index futures: Tonight all three futures are higher at 12:28 AM EDT with ES up 0.08%.  On Friday ES just continued higher, remaining inside a rising RTC with the indicators all broken now at extreme overbought levels. We stopped right at resistance at 1961 so the $64K question is can we push on through.  The overnight seems to suggest that might be possible - at least as it looks late Sunday night.

ES daily pivot: Tonight the ES daily pivot rises from 1941.50 to 1950.92.  We're now above the new pivot so this indicator turns bullish.

Dollar index:  On Friday the dollar gave up 0.15% on a tall doji star which coming in below Thrusday' candle has the look of a reversal lower.  However, the indicators are still not overbought so I will defer on this one.

Euro: After a star on Thursday the euro confirmed it Friday with an inverted hammer from oversold levels.  It's gapping up in the new overnight and trading outside the descending RTC for a bullish setup so this one looks higher on Monday.

Transportation: The trans have now completely refilled (and then some) the V left by the collapse of the first half of this month.Friday's 0.97% gain outperformed the Dow and cleared resistance at 8489.  We remain in a strong rising RTC and the indicators are all broken at overbought so there's no reason not to call this one higher again on Monday.

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       7      3           1       0.462    -52

     And the winner is...

Most of the charts look reasonably bullish tonight.  The only one that concerns me is the VIX, which looks ready to move higher, though given its inverted hammer, perhaps I'm worrying too much.  OK then, I'm just going to go with the flow and call Monday 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.

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.