Wednesday, October 3, 2012

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher, low confidence..
  • ES pivot 1438.75Breaking above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias uncertain.
  • ES Fantasy Trader standing aside.

Sigh - sometimes you just can't win for losing.  Only two days into October and so far it's living up to it's reputation as a treacherous month.  Sunday night I said the market was going lower on Monday.  Instead it went higher.  Last night I said it was going higher today so of course it went lower.  I guess those are the perils of trying to call a nervous unfocused market that's been spending more time moving sideways lately than either up or down lately.  I'm going to try this one more time - they say the third time's the charm so let's see if I can get one right for a change.

The technicals (daily)

The Dow: I think the news from Spain put the kaibosh on my expectations of a move higher today and in the end the 31 point decline felt more like noise than conviction.  So in the absence of strong direction, I'm going to fall back to the RTC and the indicators, both of which are bullish right now despite today's small decline.

The VIX:  At least I was right about the VIX moving lower today as it fell 1.04% on a gravestone doji.  I think there's more room to run lower again and the market has to start responding to this soon.

Market index futures: Tonight the futures are mixed at 1:33 AM EDT with ES higher by 0.16% but YM lower by 0.23% (and NQ up 0.18%).  ES has really been having trouble with 1441 lately.  The chart looks like its got some momentum building but I need to see it break that number before we get a positive day.

ES daily pivot: Amazingly, tonight the pivot remains exactly unchanged, staying right at 1438.75.  We sank below it this evening and just finished an unsuccessful attempt to climb back above, but I'd watch out for another try before morning.  Breaking above would be bullish.

Dollar index: The dollar fell out of it rising with a 0.09% drop for a bearish setup.  I think it's ready to move lower still.

Euro: It now looks like the euro has convincingly bounced off its 200 day MA with a second daily gain in a row.Its bullish RTC has been slow in setting up but may come to fruition any day now.  The bullish stochastic crossover and rising indicators support this idea.

Transportation: Today the trans posted a small 0.14% gain on a second spinning top.  But it was enough to drive the indicators off oversold, a bullish sign.  More upside possible here on Wednesday.

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  8      6      5           0        .571     -19

October    0      2      0           0        .000    -109

     And the winner is...

I'm really starting to get a bit gun-shy here after being wrong two days in a row, but I have to call 'em like I sees 'em, and I hate to say it but tonight I see bullish.  Pretty much all the factors that were in play last night are still there tonight.  If we can just keep the pain in Spain from raining on our gain then I think we have a decent shot at going higher Wednesday.

ES Fantasy Trader

Portfolio stats: continuing a recent dry run the account remains at $180,875 after 65 trades (50 wins, 15 losses) starting from $100,000 on 1/1/12.  Everything I said the past two days about declining to put on a position is still at work tonight.  While I think we have a shot at going higher on Wednesday, I'm not confident enough to bet any money on it in an overnight trade, not even play money.
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.

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