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Recap
Last night I called Wednesday uncertain with a bias lower and that's pretty much what we got with the Dow dropping just 24 points in a lackluster low-volume session as the pros take the week off. Since there's little point in looking at the daily charts in this type of environment, tonight I'm going to back out and do a quick run-down of the weekly charts.
The technicals (weekly)
The Dow: The weekly Dow's not looking so hot. After two tall inverted hammers, we're apparently getting some confirmation as the current candle is sagging into the red. It has also now broken out of the weekly rising RTC for a bearish setup.
The VIX: After taking a stab at its weekly upper BB last week, the VIX has now closed on it. This is usually a good sign that a reversal is on the way, though it could take a week or two to develop. There's currently no sign from the stochastic that it's about to happen.
Market index futures: With the H3 contract relatively new, there's not much to see here yet. The futures appear to be drifting higher on a weekly basis, but amid some pronounced indecision, no doubt being buffeted about by every fiscal cliff sound bit out of Washington. The current candle is the first red weekly one since the middle of November, but again, I wouldn't read too much into this week's action. All it will take to send ES higher is an announcement from President Boehbama that they have reached a deal, any deal.
ES daily pivot: There is no weekly pivot, so I'll simply point out that tonight the daily pivot drops from 1420.58 to 1416.58. We remain below, so that's bearish.
Dollar index: The dollar seems to have found some decent support at its current levels after putting in a strong bullish hammer last week. It's now trading entirely outside it's last descending RTC for a bullish trigger. With oversold indicators, all signs are pointing to more upside on the way for the greenback.
Euro: The weekly euro is now quite overbought but really not yet showing any signs of topping. In fact it recently cleared resistance at 1.3135-1.3165. With an upper BB still out at 1.3356, there's at least a bit more room to run here.
Transportation: After two weeks of solid gains, the trans look to be running out of gas. They're trading at their upper weekly BB, have fallen out of their rising RTC for a bearish setup, and their stochastic is about to form a bearish crossover. I'd say the trans are looking toppy right here.
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 final 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
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 16/30
31 7/30 43 22 + 1386 17/31
32 8/6 52 28 + 1391 18/32
33 8/13 43 21 + 1406 19/33
34 8/20 46 31 + 1418 20/34
35 8/27 39 29 + 1411 21/35
36 9/4 31 38 + 1407 22/36
37 9/10 54 29 + 1438 23/37
38 9/17 63 22 + 1466 23/38
39 9/24 52 30 + 1460 23/39
40 10/1 39 39 - 1441 24/40
41 10/8 52 34 + 1461 24/41
42 10/15 41 32 - 1429 25/42
43 10/22 38 41 - 1433 26/43
44 10/29 36 43 - 1412 27/44
45 11/5 44 33 - 1414 27/45
46 11/12 38 46 - 1380 27/46
47 11/19 52 34 + 1360 28/47
48 11/26 48 26 + 1409 29/48
49 12/3 57 21 N 1416
50 12/10 46 29 N 1418
51 12/17 52 28 - 1414
52 12/26 52 26 + 1430
This week we again see little change in sentiment, no doubt reflecting the fact that many people are on vacation. I also changed my vote back to bullish, rejoining the majority based on my readings of the SPX weekly and monthly charts;
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 7 5 5 0 .583 135
December 6 3 2 5 .786 496
And the winner is...
The weekly bias is basically negative, and that seems to match up with the daily mood. I think what I said last night still holds true - watch for the market to drift lower these last few days of 2012, unless there's an announcement of an FC deal. If there is, we go higher. If we get to the 31st and there's no deal at all, load up on the shorts. So tonight I'm making the same call as last night: Thursday uncertain but bias lower. As for me, I'm pretty much done trading for the year. I'll have final performance stats next week.
ES Fantasy Trader
Portfolio stats: the accountremains at $193,500 after 74 trades (58 wins, 16 losses) starting from $100,000 on 1/1/12. Tonight we stand aside again.
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