Tuesday, November 13, 2012

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1377.50Holding below is bearish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias down.
  • ES Fantasy Trader remaining long at 1378.25.

On Veteran's Day, the Dow put in a pretty directionless session, swinging between small gains and losses to finally end either up one point or down a third of a point depending on how close after 4 PM you looked.  But that still provided the charts with one more data point so let's see what that may mean for Tuesday.

The technicals (daily)

The Dow: Today's perfect doji mirrored Friday's.  And like heads, two dojis are better than one, so I still think the Dow's due to move higher.

The VIX:  Compared to the lackluster moves of all three major averages, the VIX took a big loss today.  I was expecting a move lower, but I didn't think it would be down 10.37%.  This tall red marubozu sliced back under the 200 day MA and completed a bearish stochastic crossover suggesting more downside to come.

Market index futures: Tonight all three futures are down at 1: 38AM EST with ES lower by a non-trivial 0.62% in the overnight after putting in a modest gain for the day.  We actually broke under the 200 day MA at 1370.18 about an hour ago.  At 1369.50 as I write, ES is on the bubble.  The indicators are all oversold now but what's not clear is whether the MA will act as support or if the bots will notice the breach and sell 'em off on Tuesday.

ES daily pivot: Tonight the pivot bumps up from 1375.75 to 1377.50.  We fell below the pivot at 7 PM and are still below, a bearish sign.

Dollar index: No $USDUPX chart tonight.

Euro: Nothing new in euroland either, as the currency continued its slide down the descending RTC unabated.  This streak is now closing in on the slump that lasted the whole month of May.  And still no end in sight.

Transportation: Also diverging from the Dow, the trans today put in a 0.80% gain on a bullish engulfing candle that also just broke out of the descending RTC for a bullish setup.  And the stochastic is now oversold and appears to be lining up for a bullish crossover.  I was figuring a bounce off the lower BB, but we never even came close.  After today's move, I'd guess there's more upside in store here.

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    8      5      8           0        .615     208
November   3      2      3           0        .600     197

     And the winner is...

As befits a low-volume holiday session, the charts are somewhat conflicted tonight, but I think the overall theme of being due for a bounce remains basically intact, with the Dow, VIX and trans all looking good.  However, I am quite concerned about the moves in ES and the euro in the overnight, so that's tempering my enthusiasm for Tuesday.  Therefore, I am simply going to call Tuesday uncertain.  If we don't go up on Tuesday, then the odds look better for a bump on Wednesday.

ES Fantasy Trader

Portfolio stats:  the account remains at $194,250 after 69 trades (54 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we're staying long at 1378.25 from last night.  This trade has sort of been weaving above and below break-even all day, but I think it has more upside on Tuesday.

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