Actionable ideas for the busy trader delivered daily right up front
- Wednesday lower - low confidence
- ES pivot 1316.25. Holding below is bearish..
- Rest of week bias uncertain technically.
- Monthly outlook: bias down.
- ES Fantasy Trader standing aside.
Grrrr. Close but no cigar. I called for a higher close today and if the market had closed just 2 minutes sooner I would have been right. As it was, the Dow managed to snatch defeat from the jaws of victory and ended the day down a mere 1.67 points on a late-day sell-off. But it felt worse than that after having been up 50 or 60 most or day day until 3 PM when, gosh I don't know - I was out shopping for groceries. Something happened, probably those freakin' Greeks again and down we went. Oh well, the past matters little here and tonight we focus once again on tomorrow.
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| One million dollars! |
I mean c'mon guys - a hundred billion smackers for a web site? OK, so they have ads. I can get rid of all of their ads instantly using the AdBlock Plus add-on for Firefox. If I want to send photos to my friends, I've got their email addresses. Drag & drop, click send, done. Like I said - I don't get it.
The technicals
The Dow: It was fun while it lasted but at the end of the day the Dow left us with a classic doji sitting right at the top of yesterday's close, and a classic case of indecision. On the plus side, today's action (or inaction) traded completely outside the declining RTC and so that's a bullish trigger. On the minus side, a doji is a reversal warning and it's not uncommon to see some give-back for a day or two following the exit of a a down RTC like this. So I view this more as a blinking caution light than a red flag.
The VIX: The VIX did not really follow through on its bearish RTC setup from yesterday, gaining 2.14% instead on a spinning top just under the recent rising RTC. Technically, it's still a bearish trigger, but a weak one. And there's not much help from the futures which are pretty much in the same position - just a lot of indecision.
Market index futures: Same story in the futures as ES put in a doji just like the Dow today. The only guidance is coming from the overnight, where all three futures are in the red with ES down a non-trivial 0.55% at 1:20 AM EDT. It's still a bullish trigger, since we're now two days outside the descending RTC. it just doesn't feel like one.
ES daily pivot: Tonight the pivot jumped from 1306.33 to 1316.25. Combined with ES trending lower in the overnight, we crossed under at midnight which now puts us eight points down - not a good sign.
Dollar index: The dollar today did not continue lower as I was expecting, but instead gained 0.51% to exit an admittedly short descending RTC for a bullish setup. This move was also enough to send the indicators back up. Basically, it's not about technicals here right now, it's the politics, baby. The politics of Europe (not of dancing).
Transportation: The $TRAN chart today played out just like the Dow, albeit ending up 0.1% but with a similar doji. Just more indecision here.
History: According to The Stock Traders Almanac, Wednesday is historically very bearish.
Accuracy (daily calls):
Month right wrong no call conditional
April 7 9 2
May 7 6 2 1
And the winner is...
A very strange night. There is almost no guidance from any of my usual charts tonight. So given that I have to fall back on the futures, and they're saying it's likely we'll see a lower close Wednesday. This is not out of keeping with the idea that exiting this long descending RTC will lead to a rally. Especially after long declines, it often takes a day or two for the counter-trend to get into gear. Wednesday may be one of those days.
ES Fantasy Trader
OK, that's it, I'm done. Tonight I finally gave up on my long-running long play from 1365, cashing out at 1310.75 for my biggest loss of the year - 54.25 points. Ouch!
Portfolio stats: the account plummets $27,125 to $123,000 after 36 trades (28 wins, 8 losses) starting from $100,000 on 1/1. While I do think we still have room to run higher, I also think I'll be able to get back in at a lower level. Nevertheless, tonight we're standing aside in view of all the dojis running around on the charts right now.
Posts
Heh. Michelle, you have a very thoroughly enjoyable style of writing. Not only do I learn quite a bit reading through your posts but you also get me to chuckle quite often. :)
ReplyDeleteOn FB note, well, GOOG was also _mostly_ a website -- sure they had ads on other websites but their homepage alone brings a big chunk (I think >50-60%) of their total revenue so around 9-10 billion per year!. Ofcourse it has now diversified quite a bit and enjoys a 200bil valuation.
I am not saying if FB is or is not overvalued, just that they do have 3.5billion revenue. And, oh well, just like everything else in this business it's all about big guys, small guys, greed, fear and lies, now innit? ;-)
Anyways, thanks for the lovely posts. Thoroughly enjoy them. Here's looking forward to future trades now that that big sucker of loss-making trade is gutted once and for all!
An admirer.
Thanks so much for the compliments.
DeleteAnd for pointing out that $3.5B income. I don't get that either. I hate Internet advertising. I won't have any on my site and I block all of it on my computers. My PC is just that - a *personal* computer. I do not give random people I don't know permission to hijack my bandwidth and my CPU cycles to splash their garbage all over my screens. I have never clicked on an Internet ad in my life. How this makes money for anyone is beyond me.
Not that I see FB going away any time soon, though I have other reasons to hate them. Maybe I'll go into those some other time. Anyway, thanks for reading!
I'm with "helpmelearn" - you have a great style of writing, and after stumbling upon your site at the tail end of my shift today, I fell in love immediately. With your blog, not you (sorry!). In any case, your blog is my new reading material right before bed.
ReplyDeleteYour analysis, while more detailed and extensive, falls in line with mine. Today I had backed out of all but my JPM weekly put position (which I am nervous as hell about after today - what a gamble!) and am sitting on the sidelines. I'm waiting for the top on this rally, and will be going short on what appears to be an up-and-coming dreadful decline.
Regarding Facebook, I feel that they are over-valued, however like "helpmelearn" said above, they are sitting on a pile of cash and can go the google route. All they need to do is monetize in some manner, and make some smart acquisitions. There is too much upwards headroom if they do that, imho.
Oh my! Two compliments in 10 minutes! I'm just blushing :-) Thanks for the kind words and for your view on the market. While I usually just focus on tomorrow, my monthly outlook is still negative.
DeleteYou can certainly play the counter-trend rallies, but with the understanding that it's risky business.
My vague, hand-waving idea at the moment is that we're in for a bit of a pullback Wednesday, then another move higher towards the end of the week, then back down we go. And I thank you too for reading!
Michele,
ReplyDeleteAs a long time reader of your posts (first post I turn to every morning), I echo the comments made above. Too many other sites not only have garbage ads pop up - some paste right over the message - hate that!), but often other posters with nothing better to do diss the author! Such a waste of time.
Coincidentally, I am with Swing Trader in exiting my JPM puts yesterday.
As for FadeBook, I agree. I was looking for options to short it when it IPO'd - options won't be available until Tuesday. Now we hear of some serious manipulation by MS and JPM. The retail investor gets the short end - AGAIN!
BTW - are you married? Are you taken? If so, I wonder how your hubby feels about these late night posts?
Best!
Yes, no ads, no hidden web beacons, no data collection, no cheesy animations, no CPU-hogging Flash applets, no music, just charts, predictions and results.
DeleteYep - it's amusing following the FB Follies. It sure didn't take the lawyers long to jump into the fray. What a fiasco.
And yes, the Night Owl's nest is occupied (thanks for asking). The DH is most understanding and a sound sleeper, so there's no problem :-)
Night Owl,
ReplyDeleteYou're an entertaining writer. I'm one of those idealist amateurs, looking for holy grail to trigger buy/sell signals flawlessly about once a week. Every day is too much. But your diligent efforts to interpret key indicators seem to confirm the disconcerting view that market behavior is unknowable, even god-like, to use a Biblical espression, "past finding out." I wish it were otherwise, and trust you can help prove it.
Ah yes, the Infallible Indicator. I'm still looking for it too. I had it written down on the back of an envelope once, but then I lost it :-)
DeleteAnd it's nice to know my attempts at levity are appreciated, even though my humor was once described as "sour as a pickle" (???) The market is certainly serious business, but if you can't have a good time while you're working, you need a different job. Thanks for reading!
Thanks Michele for the writing. Enjoyable read!!
ReplyDeleteWhat does RTC mean please?
Thanks,
RTC = Regression Trend Channel. Description available here: http://www.esignalcentral.com/university/get/getManual/eSignal_Manual_ch15.pdf
DeleteThanks for reading!