Friday, August 22, 2014

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1980.75.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Last night I made a conditional call, claiming we'd finish higher if ES managed to stay above its pivot.  Well ES made a weak attempt at breaking the pivot at exactly 3:25 AM when it touched the pivot at 1980.75 on the dot - and that was it.  It bounced off that and the result was another 60 point gain for the Dow.  Don't tell me the bots don't have the pivot programmed in.

So anyway let's just cut to the chase.  With Auntie Janet's big pronouncement coming down from Mount Jackson-Holius on Friday, the only possible call is "uncertain", the same as I do on regular Fed days.  Therefore I'm skipping the usual chart-by-chart run-down tonight, though I will mention that technically I'm still not seeing any real evidence of bearishness.

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     6       6      1           1       0.538      7

     And the winner is...

Yeah, it's clearly got to be Friday uncertain given the headline risk involved.  Of course the general gestalt of the charts remains bullish so if I absolutely had to guess, I'd say we're going higher on Friday - but you didn't hear that here.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Thursday, August 21, 2014

Thursday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher only if ES stays above pivot, otherwise lower.
  • ES pivot 1980.75.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well I guess that's what I get for playing the odds.  Despite Fed minute days as being historically negative, this Wednesday was not one of those with the Dow initially wavering but then recovering into the close for a 60 point gain.  Oh well, no real harm done so let's continue on into Thursday.

The technicals

The Dow: On Wednesday the Dow recruited three white soldiers just marching ever higher to remain once again well inside a rising RTC.  There is nothing bearish on this chart..

The VIX:  And on Wednesday the VIX rejected Tuesday's spinning top to sink another 3.52%.  With no support now til 11.50 and the 200 day MA a distant memory, this one continues to look bearish.

Market index futures: Tonight the futures are lower at 12:35 AM EDT with ES down one tick.  ES now has three white soldiers going as its rising RTC motors on.  It just managed to touch a new intraday high on Wednesday before falling back a bit for a record close.  With the indicators remaining pegged at overbought, there's no real bearish signs here.

ES daily pivot: Tonight the ES daily pivot rises from 1975.08 to 1980.75.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  And of course I missed the dollar on Wednesday too.  It did not bounce off the upper BBs I thought - instead it just smashed right through it and traded entirely above it for a 0.23% gap up green marubozu to confirm its 200 week MA breakout.  This chart now just looks plain bullish to me.

Euro: The euro made it three down in a row for a three black crows pattern, closing below its lower BB.  Though the indicators are oversold, the stochastic has yet to even start curving around for a bullish crossover.  There's nothing bullish about this chart, and the overnight, down another 0.14% so far supports that.

Transportation:  Most surprising was the trans which rejected Tuesday's gravestone doji in a big way to gain an impressive 0.55% on a green marubozu.  So this one now turns decidedly 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     5       6      1           1       0.500      7

     And the winner is...

There's no really bearish signs in the charts tonight but as I've been writing this the futures have taken a turn south leaving us now just two points about the ES pivot.  Therefore I'm going to try another conditional call: if ES manages to stay above its pivot by mid-morning Thursday, we'll close higher, otherwise lower.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Wednesday, August 20, 2014

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower, low confidence.
  • ES pivot 1975.08.  Breaking below is bearish..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Once again, the technicals worked to perfection s the Dow rose another 81 points on Tuesday while the Dog Days of Summer drag on.  So with this snoozer behind us, we move on to Wednesday.  I expect things to start getting interesting as we get get closer to Auntie Janet's pronouncements from Mt. Jackson.  In the meantime, we simply worry about Wednesday.

[Blogspot spell checker still on the fritz.  Hey Google!  Knock knock, anyone home?  How about fixing this?]

The technicals

The Dow:  .Not too much to say about this chart as the Dow slowly wended its way higher thoughout the day to close with a green marubozu good for another 0.48%.  This keeps us squarely in the rising RTC and keeps the indicators useless at extremem overbought.  We've now retraced all of July 31st's plunge and aftermath.  We closed just shy of the 16,933 resistance line I mentioned last night and I still think the Dow wants to take a look at that.  So there's still nothing bearish on this chart.

The VIX: Last night I opined that the VIX was seeming to be having a lot of trouble getting going, and that continued on Tuesday with a mere 0.89% decline on a small spinning top.  Indicators continue oversold and we now have a reversal warning, albeit one that requires confirmation so we're going to just have to wait & see on this one.

Market index futures: Tonight all three futures are lower at 12:17 AM EDT with ES down  0.04%.  ES had another good day on Tuesday with a nice half-percent gain to stay well inside its rising RTC.  Indicators are now extremely overbought and we're nearing record resistance at 1985.75 from last month.  The move lower in the overnight isn't great for now, but it's enough to leave us right on the edge of the rising RTC for a bearish setup.  It's looking like ES may either be running out of gas, or getting ready for another pause.  The latter would fit with the up-up-down pattern we've already seen completed twice in the current uptrend.

ES daily pivot: Tonight the ES daily pivot rises again from 1964.08 to 1975.08.  While we are once again above the new pivot, this time it's only by one point, so that puts the pivot in play.  It's nominally bullish for now, but  with ES drifting vaguely lower all evening, a test of the pivot is not out of the question.

Dollar index:  On Tuesday the dollar took a big pop, gaining 0.37% with a gap-up green marubozu that just managed to latch onto the upper BB and send the indicators overbought.  It's also the dollar's best showing in a year and if we look at the weekly chart we see that we've now confirmed the 200 week MA breakout we got three weeks ago after two weeks of doji indecision.  Daily though, when the dollar makes big moves to touch the upper BB, that's often followed by a decline, and that's what I'm expecting here on Wednesday.

Euro: The euro finally broke out of its week-longconsolidation when it broke support around 1.3355 and ended with a red marubozu that took it all the way to its lower BB at 1.3326. That drove the indicators oversold but with a summer-long downtrend in effect, the euro might not bounce off the BB and could just start dribbling down it.

Transportation:  The only point of real concern tonight is in the trans.  While they did advance another 0.11% on Tuesday, it was in the form of a gravestone doji.  These patterns are fairly uncommon, but also pretty good reversal signs when you do see them. We remain in a rising RTC but with indicators extremely overbought, this chart could move lower on Wednesday.

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     5       5      1           1       0.545     67

     And the winner is...

Tonight we're seeing some signs that the recent strong advances in the market may be slowing down.  The trans are losing steam and there are some reversal candles around.  But the real kicker is that Wednesday is a Fed minutes day and over the past two years, these days have been decidedly negative, with the SPX being down an average of 0.26% according to Bespoke Investment Group.  So I'm going to play those odds and call Wednesday lower.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Tuesday, August 19, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1964.08.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Last night the technicals looked fairly bearish.  But the futures looked bullish - quite bullish in fact.  And one thing I've learned about trading is never to discount the futures action in the dead of night.  After all, they're called futures for a reason.  It doesn't always work but it's a pretty good percentage play.  In the end, I decided to call Monday higher on that basis and I'm glad I did, as the Dow finished with an impressive 176 point pop.  So with that out of the way, we continue on to Tuesday.

[Once again, Google's Blogspot spell checker remains on strike for some unknown reason, so I apologize in advance for any typos I may have missed].

The technicals

The Dow: On Monday the Dow rocketed up right out the gate and never looked back.  The 1.06% green marubozu took us clear to the other side (the good side) of the rising RTC, thus saving a pending bearish setup and the indicators all returned to extreme overbought readings..With no resistance now til 16,933 I think there's still room to run here on Tuesday.

The VIX: After a jump on Friday featuring a failed attempt to breach the 200 day MA, the VIX came right back down 6.31% on Monday for a nice bearish inside harami (admittedly not the most reliable of reversal candles).  Still, the recent failure of the VIX to get much going despite extreme oversold readings and all sorts of geopolitical jitters has to make one wonder if theVIX packs the gear to march any higher on Tuesday.
Market index futures: Tonight all three futures are higher at 12:20 AM EDT with ES up 0.10%.  On Monday ES totally non-confirmed Friday's star with a nice move higher to remain inside a rising RTC,  Indicators have hit the overbought-broken region where they lose their predictive power so there's really nothing left bearish on this chart at all for Tuesday.

ES daily pivot: Tonight the ES daily pivot jumps from 1950.25  to 1964.08.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  Last night I refrained form calling this chart lower - good thing too because it put in a nice 0.20% gap-up green marubozu on Monday.  That said, indicators continue to wander around in No Man's Land between overbought ansd oversold and the dollar continue to search for direction, so no call here tonight.

Euro: On Monday the euro gave up all of Friday's gains and then some to end at 1.3363, right around weekly support.  Indicators ar ejust barely oversold and there's really no trend to speak of so I guess I'd expect just more sideways motion here on Tuesday.

Transportation:  The trans did even better than the Dow on Monday with a big 1.71% green marubozu to bring us back to the center of the rising RTC.  Indicators are now all broken at overbought and have lost their predictive power.  There is no more resistance until 8530 at the upper BB so it looks like this one still has considerable room to run.

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     4       5      1           1       0.500    -14

     And the winner is...

On Monday the market rejected a number of bearish reversal signs in a big way and ES continues to exhibit some positive pin action in the overnight.  With a bunch of positive candles now on the books and no new reversal warnings in sight, all I can do is shrug and call Tuesday higher again.  Of coursse, the usual caveat about geopolitical headline risk remains in full force.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Monday, August 18, 2014

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher, low confidence.
  • ES pivot 1950.25.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

There are people who say that technical analysis doesn't work, and they're wrong.  It does work.  It just doesn't always work.  And the biggest reason for that is headline risk.  And on Friday, for the second time last week, we saw a good example of this as news of further unpleasantness between the Rooskies and the Ukrainians sent the market lower even though technically it looked like it would be higher (and I still think that that was a good call - technically).  But the news generally trumps the technicals, so there you have it.  So let's turn our attention to Monday as the bumpy month of August rolls on.

[Blogspot's spell checker seems to be on strike again so I apologize in advance for any typos].

The technicals

The Dow:  The Dow actually did open higher on Friday - and then the news kicked in.and the Dow fell off a 200 point cliff (from high to low) before recovering with just a 51 point loss once Mr. Market figured out that once again, the world is still not coming to an end.  The result was a fat, long-legged spinning top.  And with overbought indicators plus a stochastic that is just about to form a bearish crossover, this chart looks ready to roll over on Monday.

The VIX:  And of course the news spiked the VIX all the way to 15 before some measure of snity returned and it ended with just a 5.88% gain on a failed attempt to break above the 200 day MA.    But the candle is bullish engulfing, the indicators remain oversold, and we got a newly completed bullish stochastic crossover.  We're also sitting just next to the edge of the descending RTC so it won't take much for a bullish setup.  Overall, this chart looks bullish for Monday,.

Market index futures: Tonight all three futures are higher at 12:20 AM EDT with ES up 0.31%.  On Friday ES put in a tall tomahawk (my name for a hanging man that has a bit of an upper wick showing).  With indicators now highly overbought and the stochastic ever so close to a bearish crossover, this would look like a great sign of a move lower.  But instead, the overnight is significantly higher.  It's not immediately clear what that's all about, but I never like to discount the movement of the futures in the overnight, especially when they are non-trivial as they are tonight.  I always feel like they know something I don't.

ES daily pivot: Tonight the ES daily pivot barely ticks up from 1950.17  to 1950.25.  We remain above that level so this indicator remains bullish.

Dollar index:  On Friday the dollar took a bit hit, down 0.22% with a lopsided gap-down spinning top that stopped near support of 55.35 ($USDUPX).  Indicators are now coming off overbought and the stochastic just completeed a bearish crossover so this chart overall looks bearish with the exception of the support level.  That means we need to see if that will hold before calling this chart lower.

Euro: And similarly the euro had a great day on Friday closing up to1.3400 on a tall green candle and confirming two days worth of reversal signs.  With two descending RTC's now exited this chart looks ready to move higher, although the Sunday overnight isn't so optimistic.

Transportation: And in a final indication of uncertainty, the trans ended last Friday exactly unchanged, though the candle was a long-legged red spinning top.  The indicators here are now extremely overbought, the stochastic is on  the verge of a bearish crossover and we're hanging on the edge of the rising RTC for a looming bearish setup.  All in all, that spells lower 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     3       5      1           1       0.444   -190

     And the winner is...

Sunday night is always difficult to call because a lot of the charts reflect data two days old already.  That sometimes doesn't matter too much but lately the market has been hyper-news driven and tonight may be one of those nights.   Near as I can tell, there's something about the Russians and Ukrainians playing nice again, and about the Kurds kicking the religious pyschopaths' butts in Iraq.  So while overall the general look of the charts is that we're due for a move lower, it may not be right on Monday.  I never like to go against the futures esepcially when they're up this much in the overnight so I'm going to go with that and call Monday higher.  This Monday is historically bullish anyway.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Friday, August 15, 2014

Friday

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 1950.17.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

The technicals played out exactly as expected on Thursday with some modest but non-trivial gains in the Dow as Putinoia continued to abate.  So now let's see how the week might end as we check the charts for Friday.

The technicals

The Dow: I called the Dow higher for Thursday because Wednesday non-confirmed Tuesday's star and there were no other bearish signs in sight.  That's all it took, and we gained a respectable 62 points out of it.

The VIX:  Last night I wrote "there's nothing bullish about this chart for Thursday".   And indeed there wasn't as the VIX fell another 3.72% to remain in a now fairly long running descending RTC and confirming the break under the 200 day MA.  But indicators are now quite oversold and the steochastic has just started to creep around in preparation for a bullish crosover - perhaps early next week.  Meantime, there's no support til 11.53 and without a reversal candle I'd have to say the VIX isn't done going lower yet.

Market index futures: Tonight all three futures are higher at 12:23 AM EDT with ES up just one tick, exactly where we were last night at this time.   ES had a decent day Thursday and remains nicely inside a rising RTC.  However, the indicators have reached overbought and the stochastic is starting to flatten out in preparation for a bearish crossover, though we're not there yet.  Still, in the absence of any bearish candles, I'd have to say this one still has some room to run.

ES daily pivot: Tonight the ES daily pivot ticks up from 1940.67 to 1950.17.  We're still above the new pivot, though by less than the previous night for the second day in a row.  Nevertheless, it's enough to call this indicator bullish.

Dollar index:  On Thursday the dollar continued its mysterious ways, this time losing all of 0.01% but on a decent size hanging mannish looking thing that doesn't really do much to confirm or disconfirm Wednesday's doji.  The stochastic continues to rise and RSI continues to fall - and I continue to be confused.

Euro: On Thursday the euro pretty much put in a rerun of Wednesday with a second tall star that closed at 1.3368.  So the uncertainty simply continues here - this one is anybody's guess for Friday.

Transportation:  Dow Theorists take note - the trans continued to outperform the Dow on Thursday, up another 0.66% to remain easily inside a rising RTC.  Indicators have now hit overbought and the stochastic has just started to flatten out before a bearish crossover but there's still no immediate reversal signs here so this chart just looks higher again on 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     3       4      1           1       0.500   -139

     And the winner is...

It looks like we may be nearing a short-term top soon, like in the early part of next week, but we're not there yet.  Though the indicators all are starting to show signs of being overextended, there aren'y yet any reversal signs in either the candles or RTC's.  Therefore, I'll jsut have to cautiously call Friday higher.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Thursday, August 14, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1940.67.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Last night, it was looking like it could go either way.  The double doji suggested a move lower, but the indicators did not support that.  In the end, the break was to the upside with the Dow gaining 91 points.

The technicals

The Dow: The Dow non-confirmed two days worth of dojis on Wednesday with a nice 0.55% pop ending near the high of the day.  This had the effect of confirming the recent bullish RTC exit (I was wrong to doubt the RTC exit strategy) and establishing a new rising RTC.  There is no resistance now until 16,724 which is the 50% retracement of last week's big dump and also a natural resistance line.  The 200 day MA served a a nice trampoline for the Dow and I think we can forget it for now.  So with the indicators still not yet overbought and no bearish candles in sight, I'd say the Dow looks higher again for Thursday.

The VIX: OK, I'll admit it - the VIX fooled me.  I thought it could go higher on Wednesday but instead it simply cratered right though its 200 day MA with a gap down marubozu/inverted hammer for an 8.7% loss.  This was enough to send the indicators oversold though the stochastic still has a ways to go before curving around for a bullish crossover.. Near term support is sort of indeterminate but we are now clearly in a strong descending RTC so there's nothing bullish about this chart for Thursday.

Market index futures: Tonight all three futures are barely higher at 12:21 AM EDT with ES up just one tick.  Call it essentially flat.  On Wednesday ES totally rejected last night's spinning top with a decent advance to 1945.  We're now entering overbought territory and the stochastic is way up there and flattening out for a bearish crossover.  We have now retraced 50% of last week's big dump but ES looks to be running out of gas around this point.  This looks like one of those nights to hold but not go short - yet.

ES daily pivot: Tonight the ES daily pivot rises from 1930.92  to 1940.67.  Once again we remain above the new pivot so this indicator  continues bullish.

Dollar index:  The dollar continued its random walk on Wednesday, up this time 0.13% but on a long-legged star.  Indicators remain in no-man's land between oversold and overbought so I have no idea where this one's going next.

Euro:  Last night I thought the euro might want to take another peek at 1.3341 on Wednesday.  Turns out we got down to 1.3344 - close enough - before recovering for a long-legged star. The overall trend though continues lower and the overnight is confirming that.

Transportation: Last night's star was totally rejected as the trans gained a decent 0.68% on Wednesday.  That leaves us in a rising RTC with indicators still not yet overbought.  With no bearish signals in sight, I'd have to say this one looks bullish for Thursday.

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     2       4      1           1       0.429   -201

     And the winner is...

Tonight we're seeing a resolution of some uncertainty last night in the upward direction.   That leaves use with largely bullish patterns in place though we're nearing levels where a reversal might kick in.  Still on the whole I think the best call in for Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.