Tuesday, September 23, 2014

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower, medium confidence.
  • ES pivot 1990.58  Holding below is bearish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

The markets had a bad day on Monday as expected.  Tonight I'm once again running late so this will be another Readers Digest Condensed Night Owl.  I did all the research, but I'm skipping the detailed chart run down.  We'll do that again next edition.

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  4       6      3           0       0.400     92

     And the winner is...

Despite all the damage that was done Monday, it wasn't enough to drive anything oversold nor form any bullish stochastic crossovers.  The technicals continue to look bearish despite what looks like an attempt at a DCB in ES  at 1 AM as I write.  So overall, the only call I can make here is for Tuesday lower.  I'll be happy to be proven wrong.

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, September 22, 2014

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, medium confidence.
  • ES pivot 2005.50.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Friday began with a big pop as the market reacted to the Scotland vote.  Then Mr. Market got a bad case of buyer's remorse and gave up all those gains by 1 PM.  Then a small afternoon rally helped recover some of the day's gains.  And there was a last minute sell-off, who knows why five minutes before the bell.  By the end, after all that excitement the Dow managed a paltry 14 points.  But then it was triple-witching and all.  So now with that out of the way, let's see where the new week is headed.  To the chart-pole, Robin!

The technicals

The Dow: The Dow's Friday fade left us with a tall inverted hammer that traded entirely above its upper BB and exited the left side of the rising RTC, overbought indicators, and a stochastic on the verge of a bearish crossover.  It's not clear how much of that is op-ex related but I don't like the looks of it.  I cal this chart bearish now.

The VIX: On Friday the VIX gained 0.67% on a bullish piercing pattern.  We remain in a descending RTC and haven't quite reached support or oversold levels, but there's at least a suggestion of a move higher here Monday.  VVIX, which formed a spinning top sitting right on its 200 day MA supports that idea.

Market index futures: Tonight all three futures are lower at 12:37 AM EDT with ES down  a significant 0.55%.  We've not seen a drop this big in the wee hours for quite some time.  But Friday gave us a long-legged doji centered on the upper BB and the new overnight has broken support at 2000,  fallen way out of the rising RTC for a bearish setup and a clearly completed bearish stochastic crossover.  All the indicators have now turned lower and RSI has come off overbought.  That all spells lower for Monday in my book.

ES daily pivot: Tonight the ES daily pivot rises from 2001.42 to 2005.50.   We now find ourselves considerably below the new pivot so this indicator turns bearish.

Dollar index:  The mighty dollar seems unstoppable, gapping up on Friday to a level not seen in over a year.  That completed a bullish stochastic crossover but the candle is a hanging man in evening star position.  So this chart is conflicted and I won't call it.

Euro: The euro has now alternated between up and down for six straight sessions .  Friday's down move closed at 1 2844, like the dollar a level not seen in over a year.  But it's now very close to some strong multi-year support and the overnight seems to be respecting that so there's at least a chance of a move higher here on Monday.

Transportation: In a bit of bearish divergence on Friday, the trans lost 0.49% on a bearish engulfing pattern that bounced off the upper BB and sent all the indicators lower from overbought.  And the stochastic is now on the verge of a bearish crossover.  This chart looks bearish too.

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  3       6      3           0       0.333    -15

     And the winner is...

I'm hearing the growls of bears getting louder on the charts tonight, enough to just go ahead and call Monday 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. It's a shame too because it looks like a good chance for a lower close on Monday.  I'm just worried that we missed the boat on this trade.  And multi-day shorts have been quite risky all year long.

Friday, September 19, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 2001.42.  Holding above is bullish.  Switching to the "Z" contract.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Mr. Market had an excellent day indeed on Thursday, with the Dow motoring to another record close on a day when the UK appeared to be on the verge of collapse.  This finally got us some decent action, chartwise, so let's see how this will affect Friday, op-ex and all.

Political Rant

I've been sitting on my hands long enough and I can't stand it anymore.  At a time when the world is falling apart at the seams and we desperately need a real leader, all we've got is an Empty Tan Suit that goes golfing, or fund raising, or playing basketball.

Compare Roosevelt's speech after the Japanese attack on Pearl Harbor (12/8/41):

"No matter how long it may take us to overcome this premeditated invasion, the American people in their righteous might will win through to absolute victory...  With confidence in our armed forces, with the unbounding determination of our people, we will gain the inevitable triumph -- so help us God."
to Obama on dealing with the Middle East Head Choppers Society (8/28/14):
“I don’t want to put the cart before the horse.  We don’t have a strategy yet...  We need to make sure that we’ve got clear plans, that we’re developing them. At that point, I will consult with Congress and make sure that their voices are heard.  But there’s no point in me asking for action on the part of Congress before I know exactly what it is that is going to be required for us to get the job done.”
The man is a nice guy, but it is painfully clear that he is just not up to the requirements of the job.  And now, the market.

The technicals

The Dow: It was pretty much up, up and away for the Dow on Thursday.as it put in a big triple digit marubozu that blasted right through its upper BB and rejected Wednesday's spinning top in a big way.  That also drove the indicators overbought but the stochastic is still rising and nowhere near even starting a bearish crossover.  So with no resistance left and a rising RTC in place, technically this one just looks continued bullish.

The VIX:  Last night I wrote "I'd not be surprised to see at least a bit lower on Thursday".  And indeed the VIX fell almost 5% with a gap down forming a new descending RTC.  The pattern is now quite bearish and with no support til 11.33, I'd think the VIX will want to take a look at that number before long.

Market index futures: Tonight all three futures are higher at 12:19 AM EDT with ES up a substantial 0.64%.   Like the Dow, on Thursday ES continued to clamber up its upper BB into record territory to keep a four day winning streak going.  Nothing bearish on this chart.  Tonight we switch to the "Z" contract.

ES daily pivot: Tonight the ES daily pivot ticks up from 2001.17 to 2001.42.  Tonight we remain well above the new pivot so this indicator continues bullish.

Dollar index:   On Thursday, the dollar continued to be stumped by resistance at the 57.33 level ($USDUPX) with a small hanging man near hte top of Wednesday's big run.  The indicators continue to drop off overbought but this is the sort of reversal warning that requires confirmation, so no call here.

Euro: On Thursday the euro put in a strange tall green marubozu but still lost a bit, as it began with a big loss, down to 1.2843 before recovering.  I think Friday's euro will depend a lot on the Scottish vote so I've nothing more to say about this chart tonight.

Transportation:  Last night I wrote "there could still be more upside available here" and so there was, with the trans advancing another 0;28% as it crawled up the upper BB.  Indicators are now officially overbought but the stochastic is still rising after completing a bullish crossover.  So despite the record close, there really isn't anything bearish about this chart.


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  2       6      3           0       0.250    -29


     And the winner is...

The indicators continue to remain bullish tonight and as the Scottish vote looks like it's going to be "no" (to independence) the market seems to be reacting with "yes".  So with a nod to the usual bearish implications of the triple witching Friday, I still get the feeling that we ware going to see Friday higher this time.

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, September 18, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 2001.17.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

There was a nice little buying opportunity for the fleet of finger as the market dipped on Wednesday's Fed announcement and then Mr. Market decided maybe it wasn't so bad after all.  And in the end, for all the ink and electrons spilled on trying to figure out what the Fed was going to do, the Dow closed higher by just 25 points.  But taken along with Tuesday's action, there are some interesting developments here for Thursday so let's get right to them.

The technicals

The Dow:  The Dow did its usual Fed day thing on Wednesday, creeping higher slowly before the announcement, then a quick dump followed by an equally quick reversal and some oscillation.  Nice for the scalpers; I did not participate.  One thing is clear - last week's downtrend is finito.  In fact we now have a new rising RTC going and a nicely completed bullish stochastic crossover.  The indicators are all rising before ever even having hit oversold, and that in itself is often a positive sign.  But we touched the upper BB on Wednesday and then pulled back for a spinning top with another record close.  The general look of this chart is bullish, particularly since there was no pullback after Tuesday's nice run.

The VIX:  On Tuesday the VIX took a big dump slicing right back through its 200 day MA and it fell further, down another 0.63% on Wednesday but on a classic hammer.. But the indicators are still nowhere near oversold so this chart is only a suggestion of a reversal.  I'd not be surprised to see at least a bit lower on Thursday.

Market index futures: Tonight all three futures are slightly higher at 12:13 AM EDT with ES up 0.05%.   Like the Dow, we now have a new rising RTC going and a nicely completed bullish stochastic crossover.  The indicators are also like the Dow all rising before ever even having hit oversold,.  On the other side, we touched the upper BB on Wednesday and then also pulled back for a spinning top, unable to crack resistance at 2007.  But we remain in a rising RTC, the indicators are not yet overbought, and I'd not be surprised to see ES take another look at the upper BB at 2008.

ES daily pivot: Tonight the ES daily pivot rises from 1993.50 to 2001.17.  Even with that gain, ES is still above the new pivot so this indicator remains bullish, now for the second day in a row.

Dollar index:   The dollar of course was a big winner on Wednesday with a big bullish engulfing candle good for 0.32% to the upside.  That leaves it right at resistance.  And with the indicators just now off overbought, it's not clear if the dollar has the mojo required to push through that.  I guess we'll find out Thursday.

Euro: The euro on Wednesday managed to short-circuit what was becoming a week-long rally with a bearish engulfing candle that dumped it right out of its latest rising RTC for a bearish setup and formed a bearish stochastic crossover.  But that's not the worst of it.  The worst is the Wednesday evening overnight, which gapped down an amazing 0.46% to 1.2863, just above strong 2013 support at 1.2826.  In any event it remains in a week-long descending RTC.  But I think it's going to be more influenced by the Scottish independence vote, hoot-mon, on Thursday than the technicals.  And if I may say, I think they're all fools if they vote yes.

Transportation:  Interestingly, the trans outperformed the Dow in a big way on Wednesday, up almost a percent to exit a week of indecisive sideways motion.  That sent all the indicators higher and gave us a bullish stochastic crossover.  We also hit the upper BB but the trans have shown they an climb the upper BB so I'd have to guess there could still be more upside available 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  1       6      3           0       0.143   -139


     And the winner is...

Tonight, there are some technical bullish signs in the charts so I'm going to call Thursday higher, though I haven't been having much luck with this all month so far.  We'll see.

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, September 17, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 1981.17.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

I'm glad I called Tuesday as uncertain becuase I sure wasn't expecting sa 101 point pop in the Dow.  That definitely puts a bullish spin on things.  However, Wednesday is a Fed day and it is my policy to always call these days as "uncertain".  So there's really no point in doing the usual chart-by-chart run down tonight.  We'll pick that up again Wednesday night.

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  1       6      2           0       0.143   -139


     And the winner is...

There's really no alternative but to call Wednesday uncertain as everyone gets ready to decipher the tea leaves in Wednesday's big Fed announcement, one that seems to be more highly anticipated than most.  It should be an interesting day.

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, September 16, 2014

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1981.17.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

I called Monday lower and I was right - for the SPX.  But for the Dow, my benchmark, it's just another miss as the Dow continues to act squirrelly.  In fact this whole week will be a challenge, what with a Fed announcement and options expirations.  We carefully thread our way through the minefield in an attempt to avoid blowing up our account.  Now which way is Tuesday headed?

The technicals

The Dow: The Dow chart lately has been a veritable picket fence of candles with long shadows as early intraday moves get canceled by the time the bell rings.. Nevertheless, there's no denying the wobbly downtrend we're in now.  Monday's action almost, but not quite exited the descending RTC, which would be a bullish setup.  And the indicators continue to wander about aimlessly.  There's no real direction here so I'm not calling this chart tonight.

The VIX:  Like an Olympic hurdler, the VIX on Monday leapt to its 200 day MA after four consecutive failed attempts, and never looked back to end with a 6% gain.. That level (13.57) now become support as the VIX remains firmly inside a rising RTC and the indicators have yet to reach overbought.  SO there's no sign of a move lower here.

Market index futures: Tonight all three futures are basically flat at 1:08 AM EDT with ES up by just one tick and YM up 0.03%.  On Monday ES put in a fair tomahawk pattern and finally hit oversold.  It simultaneously managed to close just outside its descending RTC for a bullish setup.  The indicators look ready to reverse but the overnight is offering little guidance, so I'm going to wait and see on this chart.

ES daily pivot: Tonight the ES daily pivot drops from 1987.83 to 1981.17.   Despite ES going nowhere, that was enough to put it back above the new pivot, so this indicator now flips back to bullish.

Dollar index:  The crab market continues in the dollar (only moves sideways) as we got the fifth day in a row of going essentially nowhere.  We're long out of th3 rising RTC and still way overbought so one would think the next move ought to be lower - if we ever start moving again.

Euro:  The euro on the other hand is now in a shallow rising trend despite a loss on Monday. That leave sit right on the cusp of a long-running descending RTC.  Tuesday will be key here to see if the euro can eke out at least a small gain to escape the downtrend.  And having just retaken its daily pivot, that just could happen.

Transportation: Last night I wasn't ready to commit to the obvious reversal star hanging over the trans.  Too bad because on Monday the trans dropped 0.36%  to start off the new week with a bearish evening star.  With indicators still closer to overbought than oversold, there's really nothing bullish about this chart.

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  1       6      1           0       0.143   -139

     And the winner is...

The charts don't really seem to be painting a convincing picture either way tonight.  Perhaps the pre-Fed jitters are setting a day early this week.  In any case, I've had enough of going out on a limb for a while and having it crack beneath me so I'll just call Tuesday uncertain.

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, September 15, 2014

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, low confidence.
  • ES pivot 1987.83.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Whoa - looks like I picked a bad day to be wrong, since th3 Dow did not rise on Friday - it went down 61 points.  That leaves me 0 for 3 in the forecasting department.  For whatever reason (geopolitics probably had something to do with it) the technicals are not on our side lately.  But that's all part of the game.  As I always say, you don't have to be right all the time to win in the long run - and we are in it for the long run.  In the meantime, let' see if we can't get one right on Monday for a change.

The technicals

The Dow:  On Friday the Dow tried in vain to rally off an early loss but by 11 AM it was all over as the selling just kept on going into the close.  A weak rally in the final hour didn' help much leaving us down 0.36%.  And with a down Friday comes the danger of a down Monday quite a bearish sign.   And I see nothing bullish on the daily charts here..

The VIX:  Huh - so much for the big bearish engulfing pattern last Thursday.  The VIX gained 4% on Friday anyway.  But that came with yet another failed retest of the 200 day MA, the fourth one in four days.  Being so wrong lately though, the most I'll commit to now is that the VIX isn't going above that number (13.56) on Monday..

Market index futures: Tonight all three futures are lower at 12:21 AM EDT with ES down a significant  0.37%.  And so much for last Thursday's bullish RTC exit.  On Friday ES tanked, canceling all the previous bullish signs to fall right back into its descending RTC,  And we're still not oversold yet.  And with the overnight lower by a non-trivial amount, this chart continues to look bleak for Monday.

ES daily pivot: Tonight the ES daily pivot drops from 1993.83 to 1987.83.  That leaves ES below the new pivot so this indicator is back to bearish.

Dollar index:  The dollar's been in the news a lot lately because of its year-long strength.  But in the past week it's gone nowhere, putting in four indecisive dojis in a row while remaining highly overbought.  I"m not touching this chart with a ten dollar bill.

Euro: And the euro finally seems to have found some support around 1.2900 as it posted a rare gain on Friday that sent all the indicators rising off oversold.  The overnight is trading just outside a long-running descending RTC for a bullish setup and above its daily pivot for a change.  This looks at least a bit positive to me for the euro on Monday.

Transportation:  The trans on Friday put in a perfect little star sitting on top of Thursday's big gain. That bent the stochastic around into position for a bullish crossover.  But with a reversal candle hanging there, we just have to take a pass on this chart.

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  1       5      1           0       0.167    -95

     And the winner is...

For what it's worth (and lately it seems like it hasn't been much), the technicals are looking bearish tonight.  That probably means the market will be higher just on a contrarian basis but the system demands that I call Monday lower - so bet it.

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.