Monday uncertain, bias higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Monday uncertain, bias higher.
• ES pivot 1394.33.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias uncertain.
• ES Fantasy Trader closed.

Recap

Fiscal cliff diving

The only thing that surprised me about last Friday's action was the extent of the losses as the Dow shed another 158 points to extend the losing streak to five in a row.  I figured we'd see more drifting lower, but this was definitely more than a drift as the market continues to price in going over the fiscal cliff.  And with no deal announced on Sunday, as I predicted a while ago we're going right up to the very edge.  Monday is now do or die.  Reach a deal, even if it's only to kick the can down the road (my personal guess) and we go higher.  No deal and we go lower, simple as that.

And in this continuing political soap opera, that's all you need to know about Monday.  There's just no way to meaningfully trade that type of market.  The technicals (although they're now looking primed for a bounce) are totally irrelevant at this point.  So once again, we skip the chart-by-chart analysis as a pointless exercise in futility.  Once we get past all this nonsense, maybe we can get back to work.  In the meantime, Happy New Year!  I'm done trading, the ES Fantasy Trader is closed, and we'll be popping the champagne corks Monday night.  Cheers!

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   6      3      4           5        .786     496

ES Fantasy Trader

Portfolio stats:  the account ends the year at $193,500  after 74 trades (58 wins, 16 losses) starting from $100,000 on 1/1/12.  We'll start over again with $100,000 on the first of the new year.

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Friday uncertain, bias lower.
• ES pivot 1408.42  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias uncertain.
• ES Fantasy Trader closed.

Recap

Thursday was a perfect example of what I mean by "uncertain" as the market got jerked around by more FC rumors and blathering from Professional Politicians.  The day started off level, then the Dow tanked 120 only to recover almost all its losses later in the afternoon.  And by the time all the shouting was over, it was down just 18 points.  Just a perfect example of a market where the technicals count for nothing.

So in view of this, I am again going to skip the usual daily chart review.  There's really no point to it since the market is now completely driven by the fiscal cliff.  With the year about to end, it looks like we'll continue in the  holding pattern I described last night - a slow drift lower until some sort of deal is announced, and then a pop higher.  And if no deal is announced, we're going down.  So basically once again it's simply Friday uncertain but the bias is lower.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   6      3      3           5        .786     496

ES Fantasy Trader

Portfolio stats:  the account remains at $193,500  after 74 trades (58 wins, 16 losses) starting from $100,000 on 1/1/12.  I'm now declaring the ESFT closed for 2012, so these are our final numbers.  We'll start over again with $100,000 on the first of the new year.


 

Thursday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

Thursday uncertain, bias lower.

ES pivot 1416.58.  Holding below is bearish.

Rest of week bias uncertain technically.

Monthly outlook: bias uncertain.

ES Fantasy Trader standing aside.

 
Recap


Last night I called Wednesday uncertain with a bias lower and that's pretty much what we got with the Dow dropping just 24 points in a lackluster low-volume session as the pros take the week off.  Since there's little point in looking at the daily charts in this type of environment, tonight I'm going to back out and do a quick run-down of the weekly charts.

The technicals (weekly)

The Dow: The weekly Dow's not looking so hot.  After two tall inverted hammers, we're apparently getting some confirmation as the current candle is sagging into the red.  It has also now broken out of the weekly rising RTC for a bearish setup.

The VIX:  After taking a stab at its weekly upper BB last week, the VIX has now closed on it.  This is usually a good sign that a reversal is on the way, though it could take a week or two to develop.  There's currently no sign from the stochastic that it's about to happen.

Market index futures: With the H3 contract relatively new, there's not much to see here yet.  The futures appear to be drifting higher on a weekly basis, but amid some pronounced indecision, no doubt being buffeted about by every fiscal cliff sound bit out of Washington.  The current candle is the first red weekly one since the middle of November, but again, I wouldn't read too much into this week's action.  All it will take to send ES higher is an announcement from President Boehbama that they have reached a deal, any deal.

ES daily pivot: There is no weekly pivot, so I'll simply point out that tonight the daily pivot drops from 1420.58 to 1416.58.  We remain below, so that's bearish.

Dollar index: The dollar seems to have found some decent support at its current levels after putting in a strong bullish hammer last week.  It's now trading entirely outside it's last descending RTC for a bullish trigger.  With oversold indicators, all signs are pointing to more upside on the way for the greenback.

Euro: The weekly euro is now quite overbought but really not yet showing any signs of topping.  In fact it recently cleared resistance at 1.3135-1.3165.  With an upper BB still out at 1.3356, there's at least a bit more room to run here.

Transportation: After two weeks of solid gains, the trans look to be running out of gas.  They're trading at their upper weekly BB, have fallen out of their rising RTC for a bearish setup, and their stochastic is about to form a bearish crossover.  I'd say the trans are looking toppy right here.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.  Here's the final cumulative list for this year.
 

Wk.# Week   % Bullish  % Bearish  NightOwl SPX  Accuracy

  1  1/3        46         21        +     1258   1/1

  2  1/9        56         37        +     1278   2/2

  3  1/17       41         33        +     1289   3/3

  4  1/23       46         32        +     1315   4/4

  5  1/30       48         31        +     1316   5/5

  6  2/6        56         30        +     1345   6/6

  7  2/13       48         31        +     1343   7/7

  8  2/21       44         32        +     1361   8/8

  9  2/27       48         24        +     1366   9/9

 10  3/5        43         26        +     1370  10/10

 11  3/12       46         32        +     1371  11/11

 12  3/19       46         29        +     1404  11/12

 13  3/26       39         29        +     1397  11/13

 14  4/2        42         21        +     1408  11/14

 15  4/9        25         46        -     1398  12/15

 16  4/16       26         48        -     1370  13/16
 17  4/23       30         48        -     1379  14/17

 18  4/30       44         32        +     1403  14/18

 19  5/7        23         50        -     1350  15/19

 20  5/14       32         44        -     1353  16/20

 21  5/21       30         52        -     1295  16/21

 22  5/29       35         42        -     1318  16/22

 23  6/4        32         48        -     1278  16/23

 24  6/11       28         40        -     1326  16/24

 25  6/18       39         26        -     1343  16/25

 26  6/25       38         46        -     1335  16/26

 27  7/2        41         40        -     1362  16/27

 28  7/9        42         38        -     1355  16/28

 29  7/16       44         32        -     1357  16/29

 30  7/23       33         42        -     1363  16/30

 31  7/30       43         22        +     1386  17/31

 32  8/6        52         28        +     1391  18/32

 33  8/13       43         21        +     1406  19/33

 34  8/20       46         31        +     1418  20/34

 35  8/27       39         29        +     1411  21/35

 36  9/4        31         38        +     1407  22/36

 37  9/10       54         29        +     1438  23/37

 38  9/17       63         22        +     1466  23/38

 39  9/24       52         30        +     1460  23/39

 40  10/1       39         39        -     1441  24/40

 41  10/8       52         34        +     1461  24/41

 42  10/15      41         32        -     1429  25/42

 43  10/22      38         41        -     1433  26/43

 44  10/29      36         43        -     1412  27/44

 45  11/5       44         33        -     1414  27/45

 46  11/12      38         46        -     1380  27/46

 47  11/19      52         34        +     1360  28/47

 48  11/26      48         26        +     1409  29/48

 49  12/3       57         21        N     1416 

 50  12/10      46         29        N     1418

 51  12/17      52         28        -     1414

 52  12/26      52         26        +     1430

  

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that my bullish call on 11/26 was right, the S&P now being  higher than then. I'm using the column "Accuracy" to track my calls.  So now with only one week to go in 2012, I'm 29 for 48 or 60%.

This week we again see little change in sentiment, no doubt reflecting the fact that many people are on vacation. I also changed my vote back to bullish, rejoining the majority based on my readings of the SPX weekly and monthly charts;

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   6      3      2           5        .786     496 

     And the winner is...

The weekly bias is basically negative, and that seems to match up with the daily mood.  I think what I said last night still holds true - watch for the market to drift lower these last few days of 2012, unless there's an announcement of an FC deal.  If there is, we go higher.  If we get to the 31st and there's no deal at all, load up on the shorts.  So tonight I'm making the same call as last night: Thursday uncertain but bias lower.  As for me, I'm pretty much done trading for the year.  I'll have final performance stats next week.


ES Fantasy Trader

Portfolio stats:  the accountremains at $193,500  after 74 trades (58 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight we stand aside again.

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday uncertain.
• ES pivot 1419.50 (H3 contract).
• Rest of week bias uncertain technically.
• Monthly outlook: bias uncertain.
• ES Fantasy Trader standing aside.

Recap

SPX, quarterly

I hope everyone had a wonderful Christmas and that all the good little traders found big boxes of outsized profits under the tree today.  As the year draws to a close, I want to show you a chart provided by the great Colin Twiggs in his excellent IncredibleCharts.com newsletter.  This is the SPX in quarterly bars, something that eSignal does not give me.  Anyway, I found it interesting to see how the SPX has been channeling since November of 1997, hitting nearly identical peaks in November 1999 and November 2007.  And since the last bottom in March 2009, we have been headed generally back up to test the 1550 resistance line for the third time.  From the looks of it, that should happen sometime around July of next year.

Colin believes that this resistance is unlikely to be broken and looking at this chart, I'd have to say at this point I agree.  What's clear is that we have some early warning here of a possible top this coming summer

Tonight, once again we forgo the usual chart-by-chart technical analysis because we don't have any fresh charts to look at due to the holiday and the long weekend.  We're also facing a short trading week and the last full week of the year, and no doubt many traders will be taking a vacation around this time.  And finally, the whole fiscal cliff thing is about to hit the wall.

So far, it's going about as I predicted and I stand by my earlier guess - Emperor Nerobama, who apparently thought so little of the whole issue that he left the continental US entirely, and the Gang of 535 are going to wait until 11:59:59 PM on the 31st before announcing that they have decided to kick the can into 2013, extending the status quo until some time in the first quarter.

So in view of all of the above, I expect the see a slow drift lower in the market as everyone watches the bus trundle up to the edge of the cliff.  If by some miracle, some real agreement is reached there will be some sort of rally, otherwise I don't really see much driving force to move us higher in the last few remaining days of 2012.  And if we do go over the cliff, then load up on your shorts.  Given all of this, I'm just going to call Wednesday uncertain but with a bias lower. 

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   6      3      1           5        .786     496

ES Fantasy Trader

Portfolio stats:  the account remains at $193,500  after 74 trades (58 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight we stand aside.

Merry Christmas!

MERRY CHRISTMAS!

The Night Owl wishes a merry Christmas, a happy Hannukah, and very Happy New Year to each and every one of my devoted readers  May you all have a safe, happy, and prosperous 2013.  Tell the ones you love that you love them.

Friday lower

SPECIAL END OF THE WORLD EDITION

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Friday lower, medium confidence.
• ES pivot 1441.17.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Arrgh - are we back to this again?  Two days ago I said the market would go up, so it went down.  Last night I said it would go down, so naturally it went up.  Well at least I won't have to worry about this much longer, according to the TV weather report this evening.  And I should add that with Monday being a short session due to Christmas falling on Tuesday, I will be taking that day off, so this will be the last post until next Tuesday night (assuming the world is still around then).

Actually, speaking of laughs, I originally added this weather graphic as a joke.  But that was before I checked this evening's charts.  In one minute, at 8:18 PM ES went from 1429.25 to 1393.  Fasten your seatbelts folks, it's going to be a bumpy ride!

ES, five minute

Anyway, tonight in view of the imminent end of the world, we forgo the usual chart by chart run-down since that's all going to be pretty meaningless come Friday morning.  The only chart you need tonight is ES, right here.  I guess this must be the fiscal cliff everyone's been talking about.  ES was actually above its pivot and wandering about 1445 earlier in the evening.  Then Boehner dropped his Plan B bomb and it was look out below!  When the dust settled ES was around 1423 where it has remained in the late night hours as I write this.

Add options expirations into the mix and it's going to be an interesting session.  It's looking like stocks will follow the futures lower on Friday, so that's the call in a nutshell: Friday lower.

And the really perplexing part about all of this is that Thursday night's vote, or lack of one was totally meaningless anyway, since the Senate isn't going to pass anything the Republicans vote on and Emperor Nerobama would veto it even if they did.  And if by some miracle  Mr. Boehbama announces an agreement after all on Friday, watch for stocks to rebound.  We're living the Franz Kafka dream my friends.  What we really need is Plan C: load everyone in Washington into buses and drive them over the fiscal cliff.  As for me, I'll be adding some extra rum to my eggnog and enjoying a crackling fire in the fireplace tomorrow.  Ho ho ho!

 
Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   5      3      1           5        .769     377

ES Fantasy Trader

Patience paid off on this trade, with a little bit of help from the US Congress proving once again that it's better to be lucky than good.  The net result was a losing trade that turned into a 9.5 point winner.

Portfolio stats:  the account now rises to $193,500  after 74 trades (58 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight we stand aside being that we just exited a trade.  I think the majority of the money to be made on this one has been captured and there's no point staying in this type of nutzoid market any longer than necessary and risking giving up our profits.

BOT    10    false    ES    DEC12 Futures     1423.00    USD    GLOBEX    00:40:50   
SLD    10    false    ES    DEC12 Futures     1432.50    USD    GLOBEX    DEC 20 01:45:28 

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Thursday lower, medium confidence.
• ES pivot 1440.17.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader Going short 10 ES at 1432.50 at 1:45:28 AM.  NOTE: Twitter refused to accept my post for this entry - I don't know what's wrong with their service.

Recap

Oops.  So much for logic.  It worked the day before, but on Wednesday we went down anyway.  Perhaps because Emperor Nerobama got on the tube - that's always good for a 100 point drop.  And that's just about what we got, with the Dow dropping 99 in a decline as the market started pricing back out all the fiscal cliff warm fuzzies it spent two days pricing in.  But that's all just part of the game.  We just get back up and soldier on.  So let's send out a recon patrol tonight to see where Thursday may lead us.

The technicals (daily)

The Dow: Today's dump nearly retraced all of yesterday's gains, leaving us with a big harami.  That's not a very reliable pattern though.  Indicator-wise, our bullish stochastic crossover is looking somewhat stunted at the moment and the indicators are still just barely overbought.  And today's close left us right at a support line so it's hard to get a good read on where this one may be headed on Thursday.

The VIX:  I missed this chart badly also last night.  The VIX did not go down, it gained a whopping 11.50% on Wednesday in a move stopped only by its 200 day MA at 17.45.  The VIX is not real reliable here.  Of the last five times we approached this MA from below, it failed to break over it three times and succeeded twice.  With no guidance from the indicators, this chart is also fairly opaque.

Market index futures: All three futures are lower tonight at 1:41 AM EST with ES down by 0.31%.  What a difference a day makes.  Whereas last night this chart wasn't looking too bad, on Wednesday ES gave us a red harami that caused a bearish stochastic crossover and moved the indicators lower, now just off overbought.  The follow-through lower in the overnight seems to confirm the harami so this chart is now looking lower for Thursday.

ES daily pivot: Tonight the pivot ticks down from 1441.50 to 1440.17.  This still leaves us a good ways below the new pivot so that's a negative sign, Jack.

Dollar index: The dollar put in its first green candle in eight straight days today, but because of the gap down opening, it still lost 0.09% on the day and remains in its descending RTC and sitting on its lower BB.  Is this a reversal sign/  Not necessarily.  I need confirmation on this chart before declaring the dollar downtrend over.  Too soon to say.

Euro: The euro on Wednesday gave us a tall inverted hammer lying almost entirely above its upper BB.  That alone is usually a fairly good reversal sign.  And it's down 0.22% in the overnight.  This, along with indicators now peaking at overbought seems to confirm that a top is in and the next move is lower.

Transportation: In a bit of divergence, while the Dow dropped, the trans continued higher on Wednesday to remain inside their rising RTC.  But their 0.19% gain put in a classic bearish inverted hammer sitting on their upper BB with some highly overbought indicators (RSI now 90.93).  So there's a definite sign here of a move lower on Thursday.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   5      2      1           5        .833     437

     And the winner is...

Thursday is historically the second weakest day of this op-ex week, and equally as bearish as Wednesday (statement corrected from the original version).  And whereas last night I wasn't seeing much in the way of bearish technicals, tonight I am.  The charts are all either ambiguous or fairly bearish.  Accordingly, I am going to call Thursday lower.


ES Fantasy Trader

Portfolio stats:  the account remains at $188,750  after 73 trades (57 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight, we go short 10 ES at 1432.50.

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday higher, low confidence.
• ES pivot 1441.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Logic prevailed on Tuesday (I like it when that happens) and the market gained ground as I expected with the Dow rising another 0.87% as op-ex week grinds on.  So we move on now and trot out the charts as usual to see what Wednesday might hold in store.

The technicals (daily)

The Dow: Last night I wrote "the Dow may be headed for its upper BB at 13,315."  And bada-bing, we got that and more, with a close above the upper BB at 13,351.  Interestingly, this move did little to move the indicators further into overbought territory and the stochastic actually completed a bullish crossover from the center of its usual range - very unusual.  Anyway, this now leaves us at another resistance point but no real bearish indications on this chart.  I'd have to say more upside is still not out of the question here.

The VIX:  Yesterday's bearish engulfing pattern here paid off big on Tuesday with the VIX dumping 4.71% to finish right at its recent support just above 15.50.  And its stochastic was a mirror image of the Dow, forming a bearish crossover from its middle range.  This move is also a bearish RTC trigger, so I have to say more downside action here is likely.

Market index futures: Tonight all three futures are just a bit higher at 1:10 AM EST with ES up 0.03%.  Today's tall green marubozu took ES right through its upper BB at 1441 without forcing the indicators to very overbought levels.  There's no resistance now til 1457.  I'm not sure we're headed there directly, but I see nothing on this chart to suggest an immanent fall either.

ES daily pivot: Tonight the pivot jumps from 1427.25 to 1441.50.  Even with that big gain we're still above the pivot.  As long as that holds true, it remains bullish.

Dollar index: Yesterday's doji was not confirmed today as the dollar stayed in its descending RTC back to December 7th, dropping another 0.29%.  We also touched the lower BB intraday and the indicators are now highly oversold (RSI is 5.78).  The stochastic also appears to be trying to line up for a bullish crossover so while we might still see a bit more downside here, I'd say the odds are beginning to favor the bulls.

Euro: Meanwhile, the euro continues to charge ahead, remaining firmly in its rising RTC and riding its upper BB higher even as its indicators are nearly pegged at overbought (RSI = 98.48).  But with no bearish candle pattern and continued positive follow-though in the overnight, I'd have to wager that the euro's still not done going up.  There isn't even a reversal on the weekly chart where the upper BB is 1.3363, leaving plenty of room to run.

Transportation: I sure wasn't expecting an outsized up move here on Tuesday but the trans delivered a 1.61% pop that began at 5225 resistance and blasted right through their upper BB at 5278 to close at 5311.  The trans have now cleared all resistance all the way back to May and the next stop is 5342.  5225 meanwhile now becomes support and we seem to be totally ignoring the overbought indicators as we're right back into the rising RTC.  No bearish signs here.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.  Here's the updated cumulative list for this year (it's getting pretty long):

Wk.# Week   % Bullish  % Bearish  NightOwl SPX  Accuracy

  1  1/3        46         21        +     1258   1/1

  2  1/9        56         37        +     1278   2/2

  3  1/17       41         33        +     1289   3/3

  4  1/23       46         32        +     1315   4/4

  5  1/30       48         31        +     1316   5/5

  6  2/6        56         30        +     1345   6/6

  7  2/13       48         31        +     1343   7/7

  8  2/21       44         32        +     1361   8/8

  9  2/27       48         24        +     1366   9/9

 10  3/5        43         26        +     1370  10/10

 11  3/12       46         32        +     1371  11/11

 12  3/19       46         29        +     1404  11/12

 13  3/26       39         29        +     1397  11/13

 14  4/2        42         21        +     1408  11/14

 15  4/9        25         46        -     1398  12/15

 16  4/16       26         48        -     1370  13/16
 17  4/23       30         48        -     1379  14/17

 18  4/30       44         32        +     1403  14/18

 19  5/7        23         50        -     1350  15/19

 20  5/14       32         44        -     1353  16/20

 21  5/21       30         52        -     1295  16/21

 22  5/29       35         42        -     1318  16/22

 23  6/4        32         48        -     1278  16/23

 24  6/11       28         40        -     1326  16/24

 25  6/18       39         26        -     1343  16/25

 26  6/25       38         46        -     1335  16/26

 27  7/2        41         40        -     1362  16/27

 28  7/9        42         38        -     1355  16/28

 29  7/16       44         32        -     1357  16/29

 30  7/23       33         42        -     1363  16/30

 31  7/30       43         22        +     1386  17/31

 32  8/6        52         28        +     1391  18/32

 33  8/13       43         21        +     1406  19/33

 34  8/20       46         31        +     1418  20/34

 35  8/27       39         29        +     1411  21/35

 36  9/4        31         38        +     1407  22/36

 37  9/10       54         29        +     1438  23/37

 38  9/17       63         22        +     1466  23/38

 39  9/24       52         30        +     1460  23/39

 40  10/1       39         39        -     1441  24/40

 41  10/8       52         34        +     1461  24/41

 42  10/15      41         32        -     1429  25/42

 43  10/22      38         41        -     1433  26/43

 44  10/29      36         43        -     1412  27/44

 45  11/5       44         33        -     1414  27/45

 46  11/12      38         46        -     1380  27/46

 47  11/19      52         34        +     1360  28/47

 48  11/26      48         26        +     1409

 49  12/3       57         21        N     1416 

 50  12/10      46         29        N     1418

 51  12/17      52         28        -     1414   

  

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that my bullish call on 11/19 was right, the S&P now being  higher than then. I'm using the column "Accuracy" to track my calls.  So now with only one week to go in 2012, I'm 28 for 47 or 60%.

This week we see little change in sentiment, although I split from the crowd and changed my vote to bearish based on my readings of the SPX weekly and monthly charts;


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   5      1      1           5        .909     536

     And the winner is...

Wednesday and Thrusday are historically the second weakest days of this week, both being equally bearish (statement corrected from original publication).  I think the big up moves we've seen the past two days have been mostly on hopes of a fiscal cliff deal.  This would seem to put us in "buy the rumor" mode.  And when that happens, there's always a risk that they'll sell the news.  I still think that won't happen til the last second, though there's an outside chance of some agreement before Christmas, which means nothing til next Monday.  So having done a bunch of pricing-in, I'm beginning to wonder how much more of this the market is willing to do.  Nevertheless, I still see no real bearish patterns in the chart.  The logical move worked last night so I'm going to try it again and call Wednesday higher, but this time I'm not expecting any more triple digit gains.  We'll see.


ES Fantasy Trader

Portfolio stats:  the account remains at $188,750  after 73 trades (57 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight, we stand aside again - this time because we're sitting near some resistance and have already moved a bunch..

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Tuesday higher, low confidence.
• ES pivot 1427.25.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

My conditional call for Monday panned out nicely.  ES wandered about its pivot in the wee hours of the morning, broke above around 8 AM, then made a quick retest that failed at 9:25 AM.  After that, it was just up, up and away as the Dow finished up a solid 100 points.  We now set our sights on Tuesday as the last full week of the year marches on.  (and Blogspot's blinkin' spell checker is on the fritz again, so I apologize in advance for any typos I may have missed).

The technicals (daily)

The Dow: So the Dow's big win today completely retraced the last two days worth of losses and ejected us from a very short descending RTC.  While the indicators remain overbought, the stochastic seems to be flattening out for a bullish crossover.  So this really throws a wrench in the thesis that last Wednesday marked a short-term top.  However, Tuesday will be critical as we're now just below the resistance at 13,250 that stopped us all last week.  If we can close above that, the Dow may be headed for its upper BB at 13,315.

The VIX:  Last night I thought there might be some upside left to the VIX, and there was, at first.  Then it was all downhill as the VIX lost 3.88% on a tall marubozu that also formed a big bearish engulfing candle and kicked us right out of a rising RTC.  Significantly, we also hit the upper BB at 17.19 today and that's always a good sign of a top in the VIX.  So although the indicators are not yet up to overbought, I now think we could see further downside action here on Tuesday.

Market index futures: Tonight all three futures are up at 1:26 AM EST with ES higher by a respectable 0.26%.  Today's strong green marubozu took us right out of a steep descending RTC for a bullish setup and the follow-through in the overnight is suggesting a bullish trigger.  This has also broken through resistance at 1432, however there's more resistance close by in the form of the upper BB at 1438.62.  ES actually touched that earlier this evening and then fell back.  But we now have a completed bullish stochastic crossover along with indicators that have hooked upward before hitting oversold, so the bearish pressure seems to be evaporating here.

ES daily pivot: Tonight the pivot rises from 1417.33 to 1427.25.  We were above before and remain above the new pivot.  Although the span has narrowed, it's still a comfortable 12 points, so that's bullish.

Dollar index: On Monday the dollar lost just 0.04% on a teensy little toy hammer.  That was still enough to bang the dollar into oversold territory and also trade outside the descending RTC for a bullish setup.  There's now at least a hint on this chart of some dollar gains later this week.

Euro: While the US markets rallied hard on Monday, the euro put in a small red spinning top that just touched its upper BB, hinting at an impending reversal.  This is supported by an RSI at a highly overbought 98.12.  So far in the overnight, it appears to be still just thinking about it, although this chart could be getting ready to move lower.  Maybe not Tuesday, but before the end of the week.

Transportation: Hah - so much for the devil's pitchfork.  After four straight days of dojis where the trans kept probing the 5225 region only to fall back to the 5190 area, today they blasted right through that resistance to close at 5227.  However, we're still not out of the woods here because the trans are now highly overbought and sitting close to their upper BB at 5249.  After a big gain like on Monday, the trans may need to rest a day.


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   4      1      1           5        .900     420
     And the winner is...

Hmmm... calling op-ex weeks can be challenging.  And right now I see a bunch of charts that are nearing various levels of support or resistance.  OK, so here's what I think - the market is going to take some time to digest Monday's gains, but since we do have some decent positive momentum coming into Tuesday and also positive seasonality reasserting itself, and some encouraging fiscal cliff noises emanating from Washington, I'm going to call for Tuesday higher - not by much mind you, but I think that in the absence of any real bearish pressure, it's the logical move.


ES Fantasy Trader

Portfolio stats:  the account remains at $188,750  after 73 trades (57 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight, we stand aside again - just because.

Monday higher only if ES stays above pivot, else lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Monday higher if ES stays above its pivot, else lower, low confidence.
• ES pivot 1417.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last Thursday we were thinking that we could go higher but only if ES stayed above its pivot by Friday morning.  Well after dancing around that line like a field sobriety test, ES finally veered off to the downside around 7 AM and that was that.  The Dow lost 36 points and the SPX dropped 6.  So now that Mr. Market has had the weekend to sleep it off, can he manage a turnaround on Monday?  Let's ponder the charts on this midnight dark and dreary.

The technicals (daily)

The Dow: From an RTC point of view, Friday's Dow was a bearish trigger plain and simple.  With indicators still just inside overbought and now headed lower, and a completed bearish stochastic crossover, there's nothing bullish at all on this chart.

The VIX:  The VIX made a corresponding move to the upside on Friday, gaining 2.66% to give us a bulllish RTC trigger and a completed bullish stochastic crossover.  With no resistance until the 200 day MA at 17.47 there still seems to be some upside left here for Monday.

Market index futures: Tonight, all three futures are up at 1:32 AM EST with ES higher by 0.25%.  Friday gave us a red spinning top and the overnight action so far seems to be confirming a reversal with a gap up.  But the gap seems to be filling as the night wears on so the market may be having second thoughts about whatever weekend fiscal cliff rumors propelled it higher here on Sunday evening.  In fact, the current level of 1418.50 brings use right back into the descending RTC.  With indicators continuing to march from overbought to oversold, I really don't see anything bullish on this chart, despite the move higher so far tonight.

ES daily pivot: Tonight the pivot falls from 1421.75 to 1417.33.  We were so far below that even this evening's gap up did not take us above the old level, but the drop at midnight now puts us above the new pivot, though not by much.  It's a positive sign, just, but bears watching for attempts to cross back under.

Dollar index: On Friday the dollar traded entirely outside its descending RTC, so that's a bullish trigger, despite the fact that it lost 0.45%.  It was an interesting move in that both the Dow and the dollar were down on the same day.  But the dollar is now getting fairly oversold and its stochastic is getting ready for a bullish crossover later this week, so I'd say we're due for a move higher here pretty soon, like Monday or Tuesday.

Euro: The euro continued its latest uptrend unabated on Friday on a tall green marubozu that just about hit its upper BB at 1.3185.  The overnight opened with a gap up but has been coming back down ever since, now back to 1.3166.  The indicators are now overbought and the stochastic is getting into position for a bearish crossover, probably in a couple of days.  This, along with the evening star developing candle suggests the euro may be getting ready to move lower.

Transportation: I mentioned the devil's pitchfork on Thursday for this chart - three tall skinny inverted hammers in a row.  Well  Friday gave us, yes, another one.  Now we have a four-tined fork as the trans just can't seem to get past the 5200 level.  This has resulted in indicators now peaking from overbought, a completed bearish stochastic crossover, and a chart that has hit and then backed away from its upper BB, so logic dictates that there's more downside risk than upside potential here.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   7      5      5           0        .583     135
December   4      1      1           4        .889     320



     And the winner is...

I know the futures are up tonight and my friend buddy pal J-Trader is going all-in long here  We sort of had a similar situation last Thursday night when I wrote "sometimes the overnight enthusiasm dissipates by morning and the trend reasserts itself", and that was just what happened on Friday.  But once again, the charts remain bearish technically so I'm going to make the same conditional call I made last week: if ES can manage to stay above its pivot by mid-morning Monday, we're going higher, but if it breaks below, then we're going lower.


ES Fantasy Trader

Portfolio stats:  the account remains at $188,750  after 73 trades (57 wins, 16 losses) starting from $100,000 on 1/1/12.  Tonight, in the absence of a clear edge we stand aside again.