Tuesday, April 17, 2012

Tuesday too tough to tell

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1366.58.  Holding below is bearish..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias down.
  • ES Fantasy Trader standing aside.

Well today sure was a real puzzler.  Last night I was reasonably sure we were going lower today.  From what I read and heard today, so were a lot of other people.  Now the S&P did close down just a bit and the Nasdaq was off by 0.76% but what was up with the Dow?  Or what held up the Dow?  Up 83 points in the opening minute of trading, then up over 100 a few minutes later.  And despite giving some of that back, we still closed up 0.56%.  I don't know about you, but I find this sort of strange action for no good reason to be vaguely disconcerting.  Just op-ex week jitters?  Who knows.  Maybe the charts will have more clarity tonight.

The technicals

The Dow: So of course right after I claimed that we wouldn't retrace yesterday's big drop, we did exactly that today, although the Dow then closed at exactly halfway down what's now a three day see-saw.  This is the sort of herky-jerky schizophrenic action we saw last summer that I hate so much.  Technically I have no clue what to make of this chart.  The candles are all over the place.  The only guidance I can see comes from the indicators, which are now rising from oversold levels, suggesting more upside.  But who knows.  This is weird.

The VIX:  The daily VIX is also pretty muddy.  We did spike up to the upper BB intraday before retreating to finish exactly unchanged.  The only clue I can find here comes from the futures which have been putting in lower highs for four days now and have indicators that sort of suggest a move lower.  So that would be good for stocks, but it's a long way from certain.

Market index futures: Tonight all three futures are down by just a hair, with ES losing just 0.07% at 1:55 AM EDT.  The stochastic completed a bearish crossover today, but did it from a very oversold level, which is odd.  I don't really know what's going on here either.

ES daily pivot: Tonight the pivot drops from 1372.42 to 1366.58.  But since ES seems to be showing no enthusiasm for moving higher in the overnight so far, that still leaves us under the pivot, just a bit less so.  Until and unless we can cross that line, it's not looking good for Tuesday.

Dollar index: This is really the only chart tonight that has a recognizable pattern on it - a big dark cloud cover.  Coupled to declining indicators, this would suggest a  move lower on Tuesday which would be good for stocks.

Transportation: Another chart here that looks like it's trying and failing to move higher.  There's no obvious pattern here.

History: According to The Stock Traders Almanac, Thursday is historically even slightly more bullish than Monday.

Month right  wrong
April   5      4

     And the winner is...

Very very strange.  It's not often that I'm left completely at a loss, but tonight is just one of those times.  So there is no call and no trade.  The best I can suggest is to watch the ES pivot to see if we can move above it Tuesday morning.  That would be bullish, otherwise another move lower is possible.

ES Fantasy Trader

I guess like the Germans in WWII in Foy when Lt. Speirs ran right through their lines, I couldn't believe what I was seeing today, but I finally pulled the plug on this trade while it was still positive, just barely, for a quarter point gain.  Nevertheless, a win is a win.  But with no readily observable edge, tonight we're going to stand aside.

Portfolio stats: the account is now $130,125, after 30 trades (23 wins, 7 losses) starting from $100,000 on 1/1  Tonight we go short at 1363.75 at 2:13 AM EDT.  Reminder - you can now follow these entries and exits live on Twitter @nightowltrader.

BOT    10    ES    false    JUN12 Futures     1363.50    USD    GLOBEX    11:55:58
SLD    10    ES    false    JUN12 Futures     1363.75    USD    GLOBEX    02:12:51

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