Thursday, February 7, 2013

Thursday higher if ES pivot holds

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher if ES pivot holds, else lower.
  • ES pivot 1507.75.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Wednesday's call was for a higher close if the ES pivot held.  Well we broke under in the early morning hours, which doesn't count, then back above right after the open.  There was one quick attempt by the bears to drag 'em under the pivot around 1:30 PM but that failed and we did end the day higher, just barely, with the Dow gaining all of seven points.  Still, following the pivot proved that the selling pressure just wasn't there.  Now let's turn our attention to Thursday.

The technicals (daily)

The Dow: The Dow remains in consolidation mode.  It put in a hanging man candle on Wednesday but that's meaningless as it does not come in the context of an uptrend.  More significant is that it appeared entirely outside the rising RTC for a bearish setup.  But this type of situation requires confirmation.  It's just too unclear to try and make a call off a chart like this.

The VIXBy comparison, I took a pass of the VIX yesterday for similar reasons.  But on Wednesday, the VIX traded down again for a second day, losing 2.26% and this was a bearish RTC trigger.  The stochastic is trying, but has not completed a bullish crossover, so I'd say technically there is more downside to go here.

Market index futures:Tonight the futures are mixed at 1:32 AM EST with NQ up 0.08%, YM up 0.03% but ES down by 0.02%, or one tick.  So call it basically flat.  Like the Dow and  the trans, ES gave us a doji today near the top of its recent trading range.  It remains to be seen if ES can break above resistance at 1507.  With a slowly rising pivot continuing to provide support, it's not out of the question.  If we get BTE jobs numbers on Thursday, that might provide  the needed push.  And depending on what you've been drinking, you might see an ascending triangle in the last three ES candles, which would be bullish.  Overall though, I'm going to wait for a breakout.

ES daily pivot: Tonight the pivot inches up from 1503.08  to 1505.33.  There seems to be some issue going on here with the pivot numbers as pointed out to me by several readers, so tonight I'm taking extra special precautions to verify that the pivot number that eSignal is showing me is in fact correct.  As of 1:09 AM EST, eSignal says the new pivot for Thursday is in fact 1505.33.  Going by that, we see that we were above the old number most of the day and then just nicked the new pivot right at midnight but managed to stay above the new number, just barely.  That puts the pivot in play so we need to watch for any attempts to dive under which would be bearish.

Dollar index:The dollar continues it wayward ways, this time gapping up 0.29% but doing it on a small red candle. .However, that's enough to finally draw a new rising RTC and that, plus rising indicators suggest more upside for the dollar on Thursday.

Euro: I thought the euro could move higher Wednesday but it did not, instead it reversed most of Tuesday's gains.  So much for the bullish piercing pattern.  Like the dollar, the euro is moving in odd ways lately.  As I write this, it's on a tear, going from 1.3514 to 1.3541 in just 90 minutes.  That brings it right up to its own pivot

Transportation:On Wednesday the trans put in a red hanging man.  Unlike the Dow, this one comes in an uptrend, so there's at least a warning of a reversal here.  But we remain solidly in a rising RTC, so this uptrend is still far from over.  Not enough evidence here to call 'em lower Thursday.

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3       0.533

February   1      0      1           2       1.000     149

     And the winner is...

It's another difficult call tonight.  Overall I'm not getting any really great reads off any charts.  My fallback position is the ES pivot so I'm going to go to the well once again and claim that if we can manage to stay above the pivot (which just before 2 AM is still showing 1505.33) then we'll close higher Thursday.  If we break down convincingly below before 11 AM-ish, then we close the day lower.

ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 for 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight with no clear direction we're going to stand aside once again.

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