Thursday, July 5, 2012

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 1364.25.  Holding below is bearish..
  • Rest of week bias lower technically.
  • Monthly outlook: bias down.
  • ES Fantasy Trader going short at 1363.50.

For a review of Tuesday's charts, see my previous post from Tuesday night.  Tonight we're just taking a guess about where Thursday might go after factoring in the futures..

The technicals

Market index futures: The only chart trading today was the futures and tonight all three are down with ES off by a non-trivial 0.31% at 1:16 AM EDT.  The developing candle just touched the upper BB at 1371.12 before retreating, RSI is now at an extreme overbought level and the stochastic is just about to execute a bearish crossover.  While we still remain in the latest rising RTC, it's looking like we might see lower on Thursday.

ES daily pivot: Tonight the pivot rises from 1356.42 to 1364.25.  With ES stair-stepping its way lower in the fractured holiday session, this now puts us below the pivot.  In addition, ES just failed to break back over in an attempt at 1 AM.  This is bearish on the face of it.

Euro: The dollar's not trading today (at least my $USDUPX chart isn't updating) so we'll look at the euro instead.  After trading down on the fourth, the euro is moving still lower in the overnight.  In fact, the candle is developing as a bearish engulfing pattern and the stochastic just completed a bearish crossover.  Lower euro -> higher dollar -> lower stocks.

     And the winner is...

As I mentioned Sunday night, this whole week is a bit scattered what with the holiday and lots of major players on vacation, but I'm seeing some weakness developing and although I'm not expecting a big move on Thursday, I do think the close will be lower.  Keep in mind too that there's a bunch of economic news coming out and the chatter is that it's not going to be BTE.

ES Fantasy Trader

Portfolio stats: the account remains at $140,375 after 48 trades (37 wins, 11 losses) starting from $100,000 on 1/1  Tonight we go short at 1363.50.  It's more of a risk than I might usually take given the amount of news coming out Thursday and the fact that it's a holiday week, but things seem to be setting up for a pullback here.  Reminder: you can track these trades live on Twitter @nightowltrader.

CUA (Commonly Used Acronyms)

BB - Bollinger Bands
DCB - Dead Cat Bounce
MA - Moving Average
RTC - Regression Trend Channel
YTD - Year To Date

Disclaimer: (My lawyer made me do it) This blog is not trading or investment advice, account management or direction.  All trades listed here are presented only as examples of the author's personal trading style.  Investing entails significant risk and trading entails even greater risks.  Deal with it.


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