Thursday, September 20, 2012

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 1454.58Holding below is bearish.
  • Friday bias lower technically. 
  • Monthly outlook: bias uncertain.
  • ES Fantasy Trader going short at 1448.50.
Quote of the Day
"It's real easy to spend other peoples' money". 
              - Me


Last night I said "the sideways motion will continue" and that's just what happened, with all three major averages putting in tiny gains on small dojis and the Dow up just 13 points.  I also said a bunch of charts were at important junctures.  Let's take a quick peek at them to see what if anything got resolved today and what it means for Thursday.

The technicals (daily)

The Dow: We got another reversal candle today, this one in the form of a shooting star that traded above yesterday's spinning top.  But the whole mess remains stuck (four days now) in a tight trading range of 13,550 to 13,590.  All the factors in play last night are still there tonight and the conclusion is the same - still no direction here.  The only thing of note is that the Dow exited its rising RTC (finally) for a bearish setup.

The VIX:  We got a doji here too today as the VIX dropped 2.12% to close near its recent support of 13.50.  Next (and presumably last) stop would be the lower BB at 13.24.  So there's still a bit of room to move lower here.

Market index futures: Tonight all three futures are down at 1:11 AM EDT with ES lower by 0.29%.  Today's doji was largely inconsequential.  The thing to watch is the current action.  With ES now at 1449, it has already broken out of a steep rising RTC from 9/11 and is right on the edge of a longer one from 9/4.  Unless ES can climb back above 1453, it's looking lower for Thursday.

ES daily pivot: Tonight the pivot rises from 1452.75 to 1454.58.  We're now below that, so that's a negative sign.

Dollar index:After gapping up yesterday, the dollar reversed course today on a big bearish engulfing pattern that also drove it right back to the edge of the descending RTC, thus canceling yesterday' bullish setup.  This looks more likely to go lower than higher from here.

Euro: The euro now has a nice new descending RTC going and today's doji is already canceled by the overnight action which is all down since 9:30 this evening, I believe on Chinese PMI numbers.  Indicators are also dropping though still overbought, so I'd say the euro's going lower on Thursday.

Transportation: After two days of big losses that took them under the 200 day MA the trans reversed course today with a spinning top for a 0.40% gain, much better than the Dow's 0.10%.  Still no immediate reversal signs from the indicators though, so tomorrow's pretty much up in the air.

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 5      4      3           0        .556     -88 

     And the winner is...

It's not unanimous by any means, but I'm feeling more bearish than bullish tonight.  I'm looking mostly at a falling euro, falling ES, and a Dow RTC exit.  Copper also looks ready to move lower (though my call for that least week was definitely premature).  And the TLT has been rising for three days now and just exited its own descending RTC.  So in my mind that all adds up to a lower Thursday.

ES Fantasy Trader

Portfolio stats: with no trade last night the account remains at $180,750 after 64 trades (49 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we're going short at 1448.50.  Twitter seems to be down again and isn't letting me post.  The time of trade was 1:26:46 though.

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.


  1. I agree, I agree, I agree. The trend is over.

    Your analysis is right on.


    1. Thanks - but after today's action I'm not so sure anymore. This is one tough market, that's for sure.


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