Thursday uncertain

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

• Thursday uncertain..
• ES pivot 1402.08.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader remains short at 1395.00.

Recap

Last night's headline was "Wednesday uncertain but bias lower".  That pretty much summed it up as the Dow lost all of seven points today.  With the SPX higher just a bit, it was another mixed day and we remain mired in Nowheresville.  You can get an idea of how slow things are in the Accuracy section below.  August is half over now and I've only collected 60 Dow points.  It's too bad the Olympics wasn't this week instead of the last two.  It's looking like a great time to go on vacation.  Shoot - I could pretty much just copy last night's post here and hit Publish for all the change we saw today but we'll run down the charts anyway to see when and if we might finally see some action. 

The technicals (daily)

The Dow: Absolutely nothing new here.  Another day, and one more doji, making eight reversal candles in a row now.  Aside from the indicators ticking down just a bit, tonight's chart looks just like last night's and the night before, etc.  Still no indication of when this will end.

The VIX:  On the other hand, the VIX traded entirely outside its descending RTC today and even though it lost 1.48%, this was a bullish trigger.  The futures put in a doji but that does not negate the idea that the VIX still has higher to go on Thursday.

Market index futures: Tonight all three futures are up at 1:04 AM EDT with ES higher by 0.16%.  Not much has changed on this chart from last night.  We're now at the top of the recent range but that's still not a breakout.  And four days of sideways action have finally brought us outside the rising RTC.  This will become a bearish setup unless ES can hang onto the1406.25 level on Thursday.

ES daily pivot: Tonight the pivot ticks down from 1402.75 to 1402.08.  With ES gradually drifting higher in the overnight we're now back above the pivot, a bullish sign.

Dollar index: The dollar gapped up 0.22% but did it on a red candle today and that drove it to overbought levels.  Hanging in space as it is now, I have to wonder if it's going to be able to continue higher tomorrow but overall, this chart is too vague to draw any firm conclusions from.

Euro: The euro moved lower Wednesday and seems to be continuing downward in the overnight after a short blip upward t 8 PM.  It is now nearing its recent support at 1.2265 but I don't see anything on this chart suggesting a move higher on Thursday.

Transportation: While there's a lot of waffling going on elsewhere, there's nothing of the kind here.  The trans today gained  a solid 1.19% on a move that finally punched convincingly through the 200 day MA and established a new rising RTC.  With the upper BB still at 5184, I'd say we could still get some more upside here on Thursday.

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:

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

 31  7/30       43         22        +     1386 

 32  8/6        52         28        +     1391  

 33  8/13       43         21        +     1406

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 bearish call on 7/23 was wrong, the S&P now being higher than then. I'm using the column "Accuracy" to track my calls.  So now I'm 16 for 29 .  After an impressive start this year, my monthly calls have now been wrong for 10 weeks running.   For the record, I voted bullish again this week based on my reading of the SPX monthly and weekly charts.


This week both bullish and bearish sentiment declined, indicating more poll participants heading for the sidelines, not quite sure what to make of this confusing market.  The bias remains net long though.


 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  4      3      3           1        .625      60
     And the winner is...

So the sideways action rolls on with still no resolution in sight.  The charts if anything are more mixed tonight than last night.  The trans, the TLT, the futures and the euro are suggesting more upside, the VIX, copper, and the NH/NL index are looking bearish for stocks while the Dow and SPX charts are simply moving sideways.  SPX is having trouble with resistance from the April highs while the Dow is stalled out even lower.  So once again, I'm afraid I have no alternative but to call Thursday uncertain with yet another doji day possible.

ES Fantasy Trader

Portfolio stats: the account still remains at $174,875 after 56 trades (43 wins, 13 losses) starting from $100,000 on 1/1/12. Tonight we remain short at 1395.00.  One might be tempted to bail at this point, but with the momentum completely sideways right now, there's no compelling reason to give up just yet.  Patience may prevail in the end.  However, if we get a definitive move to the upside, I will have to consider taking the loss.

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.  Act accordingly.