Friday, November 21, 2014

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain
  • ES pivot 2046.67.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Once again the market totally ignored a doji star reversal warning as the Dow managed another gain - this time just 33 points.  And once again we were down, and then up.  This is a great market for day traders, but not so much for swing traders.  And with Friday being op-ex and in front of a holiday-shortened week, I'll let you know right away I'm calling this one uncertain once again, so there's no point in going over individual charts tonight.

The technicals

ES daily pivot: Tonight the ES daily pivot ticks up from 2045.17 to 2046.67.   That leaves ES above its new pivot so this indicator is 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    6       6      3           1       0.538    271 
November   4       4      4           0       0.444     38


     And the winner is...

Quite simply, the way things have been going lately and with an op-ex Friday on the line, all I can do is call Friday uncertain.  And with a two-holiday week coming right up I'm going to take the entire week off.  See you again Sunday night - in two weeks.  For what it's worth, the technicals are looking vaguely bullish for Friday.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

Thursday, November 20, 2014

Thursday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain
  • ES pivot 2045.17.  Holding below is bearish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

In retrospect, "uncertain" was just about the perfect call for Wednesday, considering that the Dow ended the day down all of two points and the SPX down three.  There's no way anyone can call that sort of change the day before.  So now with seven completely indeterminate sessions in a row, where does that all leave us?  Perhaps there's an answer in the charts.  I sort of tend to doubt it at this point but what the heck, we'll look anyway.

The technicals

The Dow:  Huh - the Dow was flat, then it was up when the Fed minutes came out, then it was down again, and in the end it was right back where it started.  Is it any wonder I call all Fed days as "uncertain"?  Ans so where does this little star doji leave us?  Well right where we started.  Nothing has changed.  We're still sitting on the longest daily overbought streak since December 2010.  Interestingly though, we've had much longer overbought streak on the monthly chart, most recently just last year, from January through August - and the market just kept going up then.  So I will stop worrying about this indicator and instead note that the stochastic is just about to curve back over for a bullish crossover even as the other indicators remain stubbornly overbought.  Overall though, there isnt' enough direction here to make a call.

The VIX:  As further indication of the confused nature of this market, we note that on Tuesday the VIX put in a big hammer just below its 200 day MA while on Wednesday is put in a complete mirror image inverted hammer just above the same MA.  How weird is that?  The overall trend continues to drift vaguely higher but sitting on the very right hand edge of the rising RTC right now, this one it too tough to call.

Market index futures: Tonight, all three futures are lower at 12: 26 AM EST with ES down 0.17%. After another unexpected (by me anyway) leg higher Tuesday ES stalled out again on Wednesday with a tall skinny hanging man.  But none of these technical signs seems to mean much lately and I'm tired of calling tops that don't come.  Still this new overnight action is really looking like there's lower ro come.

ES daily pivot: Tonight the ES daily pivot ticks up from 2046.08 to 2045.17.   We're back under the new pivot so this indicator is now bearish.

Dollar index:  On Wednesday the dollar put in its second star in a row, signifying confusion but no clear direction.  We've now touched the 59.49 level for 10 straight sessions, just oscillating about it.  And I still see no end to that.

Euro:  For its part the euro continues to drift vaguely higher with no more than two in the same direction all month so far.  Like the other charts, we got a doji here on Wednesday and the overnight seems to be covering it with a bearish engulfing candle so there's no call at all here.

Transportation:  On Wednesday the trans broke support at 9016 with a 0.32% loss on a classic hammer.  But indicators continue falling and are not yet oversold so that leaves us nowhere.  No all 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    6       6      3           1       0.538    271 
November   4       4      3           0       0.444     38


     And the winner is...

Tonight we're getting not so much mixed messages as garbled messages.  With most charts drifting vaguely sideways lately, I've been burned several times in a row trying to make calls in what is essentially noise.  So I guess I'm just going to let this one go by too and officially call Thursday uncertain, though if I absolutely had to take a wild guess, I'd say it's looking lower.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

Wednesday, November 19, 2014

Wednesday uncertain.

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain
  • ES pivot 2046.08.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well I guess it serves me right for trying to outsmart Mr. Market.  For the second day in a row I was wrong and therefore I'm now taking a time out.  I will simply call Wednesday uncertain while I regroup, pick up the pieces and figure out what went so horribly wrong.  No charts tonight.

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    6       6      3           1       0.538    271 
November   4       4      2           0       0.444     38


     And the winner is...

With ES sitting smack dab on its pivot tonight and my last conditional calla  bust, and my last two calls equally bad, I have no choice but to call Wednesday uncertain..

ES Fantasy Trader

Tonight we close out a very bad and highly unprofitable short from last night as I kick myself for trying the be a hero with the countertrend play.  Instead, I'm just a zero.  Foo.

Tuesday, November 18, 2014

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower, low confidence.
  • ES pivot 2035.17.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader remains short at 2027.25.
Recap

Like Casablanca Chief of Police Renault, I'm shocked, shocked to discover that Mr. Market did not give a hoot about Japan falling into recession on Monday.  After all, it seemed like a good bet since the market shot higher on October 31st when the BOJ announced some QE, that it would go lower on news of recession.  But the world's third largest economy is in the toilet and no one cares?  What the heck??  Ah well, serves me right for trying to game the news.  We should stick to pure technical analysis, so let's check the charts for Tuesday without any pesky distractions from the new tickers.

The technicals

The Dow: On Monday the Dow simply continued its week-long pattern of congestion about the 17,625 level with yet another doji, this one a stubby little spinning top, meaning probably nothing.  And yet both the stochastic and money flow have been declining for four days now and I have to believe that means something.  I'm not changing my bearish stance on this chart, Jack.

The VIX: Now here's an interesting tidbit - on Monday we got one of those rare days when both the Dow and the VIX rose, in this case with the VIX up a non-trivial 5.11% in a move that gapped right up above the 200 day MA - though the candle was a red marubozu.  It makes sense though in the context of the news since all of the gain was in the opening minute and it was all downhill from there.  So we're now sitting on the 200 MA as support.  That means there's no guessing as to whether or not it will hold and therefore we simply take a pass.

Market index futures: Tonight, all three futures are barely lower at 12:12 EST with ES down 0.04%. On Monday, ES gave us a tall skinny hanging man no doubt influenced by the Japan news.  But four of the last five candles have been reversal warnings - and no reversal yet.  The new overnight is playing it close to the vest, so I'm just waiting for the break on this chart too.

ES daily pivot: Tonight the ES daily pivot dips from 2036.58 to 2035.17.   Thanks to a mid-day rally Monday that puts us back above the new pivot so this indicator turns bullish.

Dollar index:  Bah - the dollar is stuck in a rut, consolidating about the 59.56 level for eight straight days now.  Monday's gain of .0.45% is meaningless in this context.  Until I see a trend, I'm calling for just more sideways motion here.  Though I'll admit the fact that we got a bearish rising RTC exit but no pullback is a bullish sign.

Euro:  And of course as the dollar rose, the euro fell on Monday, back to 1.2454, a level we've seen for eight in a row now.  Monday's loss kind of put the kaibosh on a weakly rising trend, so this one looks sideways for the foreseeable future too.

Transportation:  And finally in some Dow Theoretic divergence, the trans dropped 0.54% on Monday with a red marubozu and a bearish trigger on a rising RTC exit.  All the indicators have now topped so I have to believe there's more downside on the way.

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    6       6      3           1       0.538    271 
November   4       4      2           0       0.500     78

     And the winner is...

The picture's a bit murky tonight, but I'm looking at a market that's having trouble making much more headway from where it is now, suggesting that there's not too many would-be- buyers around.  Also, all the indicators are beginning to come off their extreme overbought levels so I'm going to stick to my guns and once again call Tuesday lower.

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 remain short on a  counter-trend play I called risky last night at 2027.25.

Monday, November 17, 2014

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, medium confidence.
  • ES pivot 2034.83.  Breaking above is bullish, below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader going short at 2027.25.
Recap

OK, so last Friday was pretty much a rerun of Thursday with the Dow down just 18 points but the SPX up 0.49 - pretty much just sideways action.  At times like this it's useful to step back from the trees and take a look at the forest.  And that's what charts are for, so let's start blazing a trail for Monday.

The technicals

The Dow:  With all the record highs the Dow's been setting lately, it becomes hard to tell if we're just taking a pause before the next leg up or if we're topping out.  Well unlike the last three times we had a down day in the current rising RTC, we've now exited said RTC for a bearish trigger.  Uh oh.  With indicators still highly overbought but the stochastic sagging, I think the Dow is setting up for a move lower on Monday rather than higher.

The VIX:  On Friday the VIX tested its 200 day MA and was rejected for the second day in a row with a red bearish engulfing candle.  It remains to be seen if the VIX can break resistance at 13.98, call it 14, or not.  My guess would be that we'll test that on Monday and then bounce off lower.

Market index futures: Tonight, all three futures are lower at 12:43 EST with ES down a significant 0.47%, possibly on Japan recession news. On Friday ES put in a bullish engulfing candle but it was entirely outside the rising RTC for a bearish trigger.  The new overnight seems to be confirming the latter and with indicators remaining highly overbought but the stochastic sliding lower, it looks like this chart is ready to move lower on Monday.

ES daily pivot: Tonight the ES daily pivot ticks up from 2034.83 to 2036.58.   We are now however back under the new pivot so this indicator turns bearish.

Dollar index:  On Friday the dollar made an early, and failed attempt to break out of the 59.53 area  The result was a big read bearish engulfing candle that combined with still overbought indicators and a declining stochastic all spell lower for the dollar on Monday.

Euro:  And so as the dollar declines, the euro has now broken above its recent resistance of 1.2496 to establish a shallow rising trend.  The Sunday overnight seems to be confirming that so I'd say a higher euro looks likely Monday.  That squares with my call for a lower dollar.

Transportation:  On Friday the trans also lost ground, down 0.13%unable for the fourth day in a row to pierce the 9095 level.  More importantly, we closed outside the rising RTC for a bearish setup and the indicators have begun moving off highly overbought - all bearish signs.

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    6       6      3           1       0.538    271 November   4       3      2           0       0.571     91

     And the winner is...

The markets have been looking more like they're topping to me than consolidating as some would have it.  We're also seeing some distinctly bearish signs tonight and the futures are supporting that idea.  Accordingly, I'm calling Monday lower.

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 go short on a risky counter-trend play at 2027.25.

Friday, November 14, 2014

Friday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher only is ES stays above its pivot, else lower..
  • ES pivot 2034.83.  Breaking above is bullish, below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well we're not quite 100% tonight but I'm feeling good enough to put together my usual collection of random rants that pass for market forecasting.  So on Thursday we got yet another doji on yet another small range day.  There was some talking head on CNBC Wednesday talking about consolidation.  I was thinking more like topping but after Thursday I'm starting to think maybe he's right.  Let's let the charts decide.

The technicals

The Dow: The Dow now has three dojis in a row: a star, a hanging man and Thursdya' spinning top.  Notably, we're two days outside the rising RTC now and that's a canonical bearish trigger.  With RSI at 99.01, who ya gonna believe - some talking head on CNBC, or me?  I'm still thinking this looks toppy.

The VIX: And notably, the VIX on Thursday gained nearly 6% on a bullish piercing pattern that tested the 200 day MA.  Despite Wednesday's decline, the week-long trend is vaguely higher and given the oversold conditions, this isnt' what I'd call consolidation.  It looks more like the VIX will want to revisit the MA on Friday.

Market index futures: Tonight, all three futures are slightly higher at 12: EST with ES up 0.04%.  On Thursday ES put in a perfect star.  Consolidation or top?  Well we traded outside the rising RTC for a bearish setup and indicators remain oversold.  There's little clue it he overnight as to Friday's direction.    Perhaps we're in for more sideways motion.

ES daily pivot: Tonight the ES daily pivot ticks up from 2033.33 to 2034.83.  That now leaves ES essentially right on top of the new pivot.  So that puts the pivot in play.  A break above is bullish and below is bearish.

Dollar index: If there's any consolidation to be found, it's in the dollar which on Thursday went nowhere.  We've now seen 59.04 ($USDUPX) for size straight days now.  However, the dollar has now exited a month-long rising RTC for a bearish trigger so with declining indicators I'd say there's more downside to coming on Friday.

Euro:  And as the dollar slowly slides, the euro continues to drive slowly higher.  We've barely moved over the past week but it was enough to bring the indicators off oversold.  Still the only reasonably forecast here is for more sideways action until we get a breakout - and I don't see that coming on Friday.

Transportation:  The trans is always a good indicator and on Thursday we got 0.20%'s worth of bearish divergence form the Dow. with a small red hanging man that closed right on the rising RTC for a bearish setup.  Indicators remain highly overbought here too so the next move seem to be logically lower from 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    6       6      3           1       0.538    271
November   4       2      2           0       0.667     91

     And the winner is...

While we're seeing some bearish signs cropping up in the charts, I'm not yet seeing confirmation form the futures.  In fact with ES sitting right on its pivot, this is an ideal time for a conditional call.  If ES move above its pivot and remains there by mid-morning Friday, we'll close higher.  Otherwise, if ES breaks under and stays there, we close lower.  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, November 13, 2014

Thursday

I'm very sorry but I'm afraid I can't do the Night Owl tonight due to some unexpected medical issues.  Nothing grave, but I'm really not feeling so hot tonight.  We'll see what Thursday brings.