Friday uncertain, bias lower

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

• Friday uncertain but bias lower.
• ES pivot 1400.00.  Holding below is bearish.
• Next week bias lower technically.
• Monthly outlook: bias down.
• ES Fantasy Trader standing aside.

Recap

When I said "Thursday uncertain" last night, today's action was just what I was talking about.  I sure wasn't expecting a 107 point dive in the Dow, certainly not when we're already pretty oversold and had two dojis prior.  I simply did not see this move in the charts.  Let me take another look to see what Friday might bring.

The technicals (daily)

The Dow: Today's 0.81% drop took the Dow right to the 13,000 psychological support level, after breaking below the lower BB at 13,026.  It also generated an unusual bearish stochastic crossover from a low level.  We had the mirror image of this, a bullish crossover from a high level back on August 16th - and the next two days were higher.  Right now, I don't see any catalyst for a move higher on Friday on this chart.  And the weekly chart looks even worse, with two consecutive red candles following a hanging man top and indicators that have all peaked at overbought.

The VIX:  Today the VIX not only reached its upper BB at 17.49, but it closed above that level at 17.83, all the while remaining inside its rising RTC.  Also, while the stochastic is very overbought, it has not yet even started forming a bearish crossover.  I'd say we could see even higher for the VIX on Friday.

Market index futures: Tonight all three futures are up just a hair at 1:30 AM EDT with ES higher by 0.04%.  Today's drop in ES broke support at 1403 as well as the rising wedge support line I've been talking about lately.  Next support is the lower BB at 1391.  Indicators are only just now entering oversold levels.  This isn't looking like a chart ready to move higher.

ES daily pivot: Tonight the pivot drops from 1408.17 to 1400.00 even.  We were below before and remain below, just not quite as much, but still enough to be bearish.

Dollar index: The dollar gained 0.18% today but remained stuck in its recent range between 56.40 and 56.12 on the $USDUPX.  The rising indicators suggest some more upside possible on Friday, but that remains to be seen.

Euro: As the dollar gained, the euro fell a bit but remains stuck in its own range of 1.2580 to 1.2500.  After rising most of the afternoon, the euro took a sudden dive just after midnight right back to 1.250, possibly on Japanese industrial production numbers.  In any case, being at the lower end of a range that has held for eight days running now, the logical thing would be to guess that the euro move higher on Friday, which would help stocks.

Transportation: The trans continued to underperform today, losing 1.14% compared to the Dow's 0.81% on a tall red marubozu that stopped exactly on the lower BB at 4933.  We're now in quite an extended losing streak, 7 of the last 8, and remain firmly in the descending RTC.  The only positive note on this chart is that the indicators are now quite oversold, with RSI down to 1.5 and the stochastic looking very close to executing a bullish crossover.  The last three times we hit the lower BB here, the next day was a reversal day and we closed higher two days later.  And the Dow followed higher in each case too.


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      7           1        .600     -78
     And the winner is...

Another night of badly mixed messages.  On the one hand, we've got the trans, the euro, and copper (which is now very oversold) supporting a move higher.  And on the other, we have the Dow, VIX, the dollar and the ES pivot suggesting continued lower.  And on the third hand, we have the futures not suggesting much of anything.  But ultimately, none of this amounts to a hill of beans because the only thing that will move the market on Friday is what Uncle Ben has to say.  So I close out the month by once again calling Friday uncertain.

However, personally I have a bearish bias right now.  I think that unless Bernanke announces free trips to Disneyland for all traders, the preponderence of evidence is to the downside.  I bought some SDS today at 14.56 to hedge my longs.  I'm also bearish on gold and bought some GLL at 16.30.  Keep in mind too that Friday is also the end of the month and is historically bearish anyway.  Things will be interesting on Friday, that much I'm sure of.

ES Fantasy Trader

 Portfolio stats: the account remains at $166,250 after 60 trades (45 wins, 15 losses) starting from $100,000 on 1/1/12.  No trade tonight ahead of the uncertainty surrounding the Hole.

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.
 

Thursday uncertain

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

• Thursday uncertain.
• ES pivot 1408.17.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader standing aside.

Recap

Well can you blame me for making a call of "uncertain" for Wednesday?  A day when the Dow ends by gaining all of four and a half points?  When the SPX is up 1.19?  I was right about one thing though - the market continues to tread water as we approach the end of the week, the month, and the summit on Mt. Holympus.

The technicals (daily)

The Dow: I feel a lot like I'm analyzing noise here with the Dow putting in a sliver of a doji star today as the market continues waiting for Friday's news from the Hole.  The indicators are oversold but the technicals count for very little right now.

The VIX:  I was definitely wrong about the VIX moving lower today, as it actually gained 3.46% to remain firmly inside its rising RTC.  However, its indicators have now reached overbought territory and today's close at 17.06 leaves us very close to the upper BB at 17.42.  As I've often mentioned, the VIX doesn't like to spend more than a day or two around its upper BB before backing off.  So I'm guessing we're in for a reversal if not Thursday, then even more likely on Friday.

Market index futures: Tonight all three futures are down by non-trivial amounts at 1:27 AM EDT with ES lower by 0.32%.  ES continues to put in dojis but each one is a bit lower than the previous one.  I note also that ES right now is trading lower outside my rising wedge support line that I mentioned yesterday.  Unless we can make it back to 1408 on Thursday, that would be a bearish sign.

ES daily pivot: Tonight the pivot notches up from 1407.67 to 1408.17.We moved below the pivot at the close and remain under the new value, which is a negative sign.

Dollar index: At least I did get the dollar right today, as it gained 0.22%  But the daily chart just looks like popcorn, bouncing around just above the 200 day MA like a moth around the back porch light.  There's no telling where this may go next - probably more of the same.

Euro: And the euro is also pretty jittery, moving mostly sideways in a small range for six straight sessions now.  It's looking overbought and what goes up does come down eventually, but probably not just yet.

Transportation: Finally, the trans continued their downward march today even as the major averages are trading sideways - an interesting divergence.  We remain solidly in a descending RTC that began on the 21st.  We're also three days below the 200 day MA now and the indicators have become quite oversold with RSI hitting just 4.57 today.  The stochastic is also leveling out in preparation for a bullish crossover.  I'd say the trans are setting up for a reversal higher by Friday.


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      6           1        .600     -78

     And the winner is...

This market is beyond tough.  I've looked at the charts and scratched my head.  The best I can come up with is that the TLT looks toppy right now, and lower bonds generally mean higher stocks.  But once again, we're simply on hold until after Friday so there's little point in calling anything here other than Thursday uncertain again.

In closing though I do want to note that while the daily charts are pretty foggy right now, the weekly charts are all looking  rather bearish.  Unless there's some real good news from Jackson Hole, next week could be ugly.  And recall that next week starts the ugly month of September.  Add in the ES rising wedge and I'm starting to get concerned for next month.

ES Fantasy Trader

I always preach patience in my trading and today I failed to exercise it.  The result was not just a 6 point loss, but one that could have been a profit had I only waited a few hours longer.  This is the sort of mistake I used to make but don't very much anymore.  But I did it again today.  My original instincts for this trade were correct - serves me right for trying to second-guess myself.

 Portfolio stats: the account remains for the time being at $166,250 after 60 trades (45 wins, 15 losses) starting from $100,000 on 1/1/12. Tonight we're standing aside and will continue to do so until I see some sign of this market coming off top-dead-center.

BOT    10    ES    false    SEP12 Futures     1411.75    USD    GLOBEX    AUG 29 14:24:17   

SLD    10    ES    false    SEP12 Futures     1405.75    USD    GLOBEX    AUG 28 01:08:33 

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.
 

Wednesday uncertain

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

• Wednesday uncertain.
• ES pivot 1410.42.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader remains short at 1405.75.

Recap

Waiting for the Gods...

It's not quite the doldrums - in some ways it's worse.  Instead of just going nowhere, various parts of the market are going off in a bunch of different directions.  My call for a lower close today was right as the Dow and SPX both closed slightly lower, but the Nasdaq actually gained 0.13%.  And the charts are full of similar contradictions as we await the pronouncements of Emperor Bernanke from Mt. Jackson Holympus on Friday.  It's mostly a futile exercise in tea leaf reading, but I haven't got anything better to read right now so here we go...

The technicals (daily)

The Dow: Here's a perfect example of what I mean.  Looking at the daily Dow chart, we now have two small down candles.  That's bearish.  But the indicators are all oversold and today the stochastic finally finished its bullish crossover.  Last night this chart looked bearish, tonight I'm not so sure.  Two days ago we exited the descending RTC for a bullish setup.  Today's action traded entirely outside, but lower.  Bullish trigger?  Honestly, I don't know.

The VIX:  Of all the charts I watch, tonight the VIX offers the most clarity.  It did gain 0.86% today, but did it on a green spinning top that followed yesterday's hanging man.  That's two reversal warnings in a row.  This also brought us right to the edge of the rising RTC.  Add in highly overbought indicators and a hanging man in the futures and I'd say we have a good shot at a lower VIX on Wednesday, which would be good for stocks.

Market index futures: Tonight all three futures are up at 1:18 AM EDT with ES higher by 0.09%.  Today's action produced yet another of many dojis lately.  While the action in the overnight is mildly bullish, the overall general trend since the peak on August 20th is down.  The indicators, which you can see in the daily ES chart here, aren't of much use right now as they've kind of flattened out as the market continues its late August meandering.

ES daily

But I'm printing this chart because I really want to bring up a very interesting point I just noticed - an ascending wedge.  The upper blue resistance line passes perfectly through every peak but two since May 29th while the lower blue support line passes through every bottom except for the one one July 26th which pokes out a bit.  Anyway, I moved the chart over a bit to show where these two lines intersect.  Turns out it's on September 23rd.

Now that's a Sunday, and in fact the last trading day before that is Friday the 21st and that is options expiration and the last trading day of the "U" contract.  And the price point is 1465.  Now I don't expect ES to continue squeezing until the bitter end and I don't believe we're going to hit 1465, but the point is that rising wedges are generally quite bearish.  We now want to watch closely for a break down through the lower support line.  When and if it comes, it could be ugly.  Note also that the wedge closes up in September - the worst month of the year for market.  Just sayin...

Oh, and you can also see on this chart the last rising RTC I drew here beginning on August 6th (the three parallel red, black, and blue lines).  Noe how as soon as we exited the RTC, ES moved lower - that's the beauty of the RTC.  And the red horizontal line is the entry price for the short position I'm currently running.

ES daily pivot: Tonight the pivot drops from 1410.42 to 1407.67.  With ES wandering vaguely higher since the close, this broke us above the new level right at the switching point at midnight, so tht now becomes a positive sign.

Dollar index: Today the dollar gave us a misshapen gap-down spinning top for a 0.36% loss that took us back to the same level we found support three days ago.  The indicators are also now quite oversold so I'd say there's a good chance of the dollar moving higher on Wednesday - bad for stocks.

Euro: Meanwhile, the euro gained today on a green candle that took it right to recent resistance at 1.2569.  After three failed attempts at moving higher than this in the last four days, I'd say it's more likely that the euro moves lower on Wednesday than higher, especially given the highly overbought indicators.  And that would be bad for stocks.

Transportation: Last night I wrote "no sign of a turn-around" for the trans and indeed they went lower today, down another 0.23%.  We're even more below the 200 day MA, we're still in a descending RTC, and the indicators that were oversold are now even more oversold.  In fact, RSI hit 4.8 today,  At this stage, I'm guessing that there might still be one more day lower, but the trans will be turning around before the end of the week.


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      5           1        .600     -78
 

     And the winner is... 

This is a hard one.  When you're flying a plane, you always want to land into the wind but it's hard to choose a runway for landing when the winds are light and variable.  And right now the market winds are very light and quite variable.  I'm seeing the slightest of biases to the downside tonight, but not enough to have enough confidence to make any call but Wednesday uncertain.  I think we're going to remain in this holding pattern until next week.  And let me add that tonight's "uncertain" isn't because I'm expecting a doji - it's because I really don't have a good handle on the market right now.  The signal is just lost in the noise.


Postscript:

SPX (candlesticks) vs. EEM (line), daily, 2012

Alert reader Daniel posted an interesting comment today regarding the connection between SPX and EEM based on an observation by the great Dr. Brett Steenbarger.  The interested reader is invited to read it in my previous post.  Since I can't insert images in comments, here is a chart, courtesy of Stockcharts.com, of what we're talking about.  (Click the chart to enlarge).

The interesting thing here is that EEM has started diverging considerably from SPX beginning over a week ago.  I'm not quite sure what to make of this.  The last time we had a similar situation (at the end of May), SPX went on to post a dramatic three day drop.  If we're setting up for that again, it kind of lends support to my rising wedge theory for ES (see above).

ES Fantasy Trader

Portfolio stats: the account remains for the time being at $169,250 after 59 trades (45 wins, 14 losses) starting from $100,000 on 1/1/12.  Tonight we remain short at 1405.75.  I think I'm going to hold onto this trade because I don't see a lot of upside risk and there's at least as much chance that we could move down into a profit position on Wednesday.  If not, I'll 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.
 

Tuesday lower

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

• Tuesday lower, low confidence.
• ES pivot 1410.42.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader going short at 1405.75.

Recap

Things were looking up, literally this morning for my bullish call on the day until lunch time when a slow downward grind took over to send the Dow off by 33 points.  I think today will be pretty much a template for the rest of the week.  Unless Israel drops an atomic bomb on Tehran or Martians land on Wall St., look for more of this aimless wandering about until after Labor Day.

The technicals (daily)

The Dow: Well despite today's 0.25% loss, the Dow traded entirely outside its latest descending RTC today, so that's a bullish trigger.  And while the RSI, momentum, and money flow are not yet oversold, the stochastic did just barely complete a bullish crossover today.  So the overall picture here is a bit murky, but I'd still not be short right now.

The VIX:  I was surprised here too today as the VIX didn't just retrace yesterday's losses but gapped up 7.71%.  The candle is a hanging man that remains inside the rising RTC, so one should await confirmation before declaring a lower VIX.  Of note though is that the stochastic, which looked ready to execute a bearish crossover last night, did not do so today and is getting threaded out.  So overall, it's just more murk on this chart.

Market index futures: Tonight all three futures are down at 12:56 AM EDT with ES lower by 0.20%.  Today's red candle contradicts the indicators which are starting to rise from oversold.  The stochastic, which appeared to be starting a bullish crossover is now simply threaded out.  Right now the candles look more convincing, and the signs there are for more downside.

ES daily pivot: Tonight the pivot rises from 1405.67 to 1410.42.  Since ES has been stepping lower since mid-afternoon, it crossed under the pivot at 10:20 PM and is now even further under the new number, a bearish sign.

Dollar index: I did get this one right today, as the dollar gained 0.11% on a green closing marubozu.  With the bullish stochastic crossover now complete and the other indicators having bottomed at oversold, the way looks clear for further upside in the dollar on Tuesday.

Euro: Meanwhile, the euro continues to meander lower, putting in a small doji today.  But it's not being confirmed in the overnight and the indicators are all just turning down from highly overbought levels, so it looks like a lower euro is in the cards for Tuesday, which squares with my expectation for a move higher in the dollar.

Transportation: This one definitely caught me by surprise today.  I had expected the 200 day MA to act as support here.  It turned out to be as much support as a pair of lead water wings as the trans dropped 0.88%.  While there's nothing bullish in the candles here, the indicators have now been driven to oversold levels, though there's no sign of a turn-around there yet either.

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  16/30

 31  7/30       43         22        +     1386  17/31

 32  8/6        52         28        +     1391  

 33  8/13       43         21        +     1406 

 34  8/20       46         31        +     1418

 35  8/27       39         29        +     1411 

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 bullish call on 7/30 was right (finally), the S&P now being higher than then. I'm using the column "Accuracy" to track my calls.  So now I'm 17 for 31.  For the record, I voted bullish again this week based on my reading of the SPX monthly and weekly charts.


This week we note that there was a two point decline in bearish sentiment but a 10 point drop in bullish sentiment, narrowing the gap between the two considerably and clearly reflecting the overall uncertainty in the market as August draws to a close.  Net net though, the bias remains positive.


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  7      6      5           1        .571    -100
     And the winner is...

Hmm - I'm starting to wonder if maybe Friday's big gains were not a trend change but just a one-off in response to Uncle Ben's remarks on the economy.  I'm also concerned by the continued move lower by the futures in the overnight that's taken us below the pivot.  Tonight we're also looking at a rising TLT and declining copper.  Also, gold seems to have topped and the chatter I'm reading is that the expectations are that Uncle Ben is not going to announce QE3 on Friday.  There's also some bad economic news out of Japan and China tonight.  All in all, it's adding up to a picture biased to the downside.  And finally I note that the weekly charts are looking decidedly more negative than the dailies.  So while I'm not expecting a big decline, I do think we stand a good chance of closing lower Tuesday.

ES Fantasy Trader

Today  I settled for a puny 1.5 point gain on last night's long trade, and was glad I got that much.  Given the choppy, indecisive nature of the market, I decided not to push my luck - and was glad of it since 1413 ended up being about all that ES had in the tank today.

Portfolio stats: the account now rises to $169,250 after 59 trades (45 wins, 14 losses) starting from $100,000 on 1/1/12.  Tonight we're going short at 1405.75.

SLD    10    ES    false    SEP12 Futures     1413.00    USD    GLOBEX    11:53:24

BOT    10    ES    false    SEP12 Futures     1411.50    USD    GLOBEX    00:44:59


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.
 

Monday possibly higher

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

• Monday higher, low confidence.
• ES pivot 1405.67.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader going long at 1411.50.

Recap

After four straight losing days, the Dow redeemed itself on Friday with a 100 point pop, thanks in part to Uncle Ben's comments on the economy.  We now move on to what promises to be a nervous week as traders await new pronouncements from on high - high being tony ski resort Jackson Hole, of course.  It's also the last week of the month and next week starts with a holiday.  Should be interesting.

The technicals (daily)

The Dow: The Dow's 0.77% gain was just enough to take us out of last week's descending RTC for a bullish setup.  It also bottomed out the RSI and set up the stochastic to start forming a bullish crossover.  And the candle itself is a bullish piercing pattern.  So on this chart at least, things are looking good.

The VIX:  As the Dow moved up, the VIX moved down, by 4.89%.  It's close Friday at 15.18 was just shy of exiting its rising RTC and its stochastic is ever so close to executing a bearish crossover.  RSI has peaked here too and the futures were down 4% on a big bearish engulfing pattern.  This all suggests a lower VIX again on Monday which would be good for stocks.

Market index futures: Tonight we have a mixed market at 1: 09 AM EDT with ES up by 0.07%, YM down 0.02% and NQ up 0.33%.  ES holding on here to the top of Friday's tall green candle is a good sign, and its stochastic is looking very close to executing a bullish crossover.  Although this chart doesn't look strongly bullish, I'd not be wanting to go short right here.

ES daily pivot: Tonight the pivot barely ticks up from 1405.33 to 1405.67. With ES little changed in the overnight, we remain above the pivot, which is bullish.

Dollar index: After putting in a doji last Thursday just above its 200 day MA on the $USDUPX, the dollar on Friday gave us, yes, another doji, only this one a bit higher for a 0.3% gain.  So not much resolution here.  However, the stochastic just managed to squeak in a bullish crossover, pointing to further gains on Monday.  However, with the dollar becoming somewhat decoupled from the market lately, this isn't necessarily bad for stocks.

Euro: Meanwhile, the dollar's gain on Friday was the euro's loss on a chart that had a bit more clarity, with the euro dropping out of its rising RTC for a bearish setup.  Its indicators all declined for the second day in a row off highly overbought levels and it stochastic completed a bearish crossover.  This all points to continued downside on Monday and the euro is indeed running lower in the Sunday overnight, giving support to this theory.

Transportation: Finally, the trans on Friday poked under the 200 day MA again, and for the second day in a row rallied back to close just above it at 5119 with a doji.  The indicators continue to decline and while not yet oversold, are getting close.  With the 200 MA seemingly acting as support here, the doji indicates at last a possibility of moving higher on Monday.


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  7      5      5           1        .615     -67
 
     And the winner is...

I'm seeing enough bullish signs to believe that last week's slide is over and that we could conceivably see some follow-through to last Friday's gains, though I'm not expecting another 100 point day.  But I am just barely confident enough to call Monday higher.  But this whole week is going to be tough to call.  The wisest course might actually be to just take an early Labor Day vacation.  I don't plan on doing much trading myself this week.

ES Fantasy Trader

Portfolio stats: the account now remains at $168,500 after 58 trades (44 wins, 14 losses) starting from $100,000 on 1/1/12.  Tonight we go long at 1411.50.

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.