Tuesday, February 12, 2013

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1513.25.  Holding below is bearish .
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Ho hum.  Same old same old.  With just a 22 point loss (which I'll admit I wasn't expecting), the Dow remains stuck in a narrow range that just seems to drone on and on.  Ho hum.  What's it going to take to get this market off of top dead center?  Let's set the choke and see if we can't get these charts to turn over.

The technicals (daily)

Dow daily
The Dow: At first glance a yawner, I think today's small range is instead really bringing into focus an ascending triangle pattern here.  Take a look and see if you don't agree.  I know, there's that one tail sticking down from three days ago, but if you go by opening and closing prices, this looks really good.   And since these are generally bullish patterns, I'd say that we very well may be looking at some higher prices soon.  This triangle is just about finished, like within a day or two.  Meanwhile the indicators have still yet to reach overbought, so there's potentially still some gas in the tank.  Despite today's 22 point loss, this chart's not looking bearish to me right now.

The VIXAnd as if to underscore that, on a day when the Dow fell, the VIX did too, losing 0.61% to close back below 13 and remain in a descending RTC.  Indicators still not oversold yet.  At least I got this one right.  The VIX is now right at support though, so we're going to have to wait and see if it sinks through that on Tuesday.  No reason why it can't, as I'm not really seeing any bullish impulse here.

Market index futures:Tonight all three futures are lower at 1:42 AM EST with ES down by 0.20%.  On Monday, ES gave us a doji star just above last Friday's green marubozu.  Not quite an evening star though and we remain in the rising RTC.  That said, the overnight action seems to be confirming the doji so far, so this chart is now looking a bit on the bearish side.

ES daily pivot: Tonight the pivot rises from 1510.42  to 1513.25.  This, combined with the overnight sag we're seeing now puts ES below the new pivot, a bearish sign.

Dollar index:I was hesitating on calling the dollar lower for Monday and I'm glad I did, since it gained 0.09% on a bearish evening star.  Coupled with now quite overbought indicators and touching its upper BB for the third straight day, it now looks like we have a better shot at moving lower on Tuesday.

Euro: I always like to check the euro chart independently to see if it agrees with my dollar call.  After a small gain on Monday, the euro opened its new candle higher but has been losing ground ever since, now at 1.3389.  It also remains in a descending RTC.  However, it's now oversold and its stochastic is in prime position to form a bullish crossover.  I think it's due to move higher any day now - if not Tuesday then even more likely on Wednesday.

Transportation:The trans put in a doji on Monday, losing just 0.04%.  So we now have a reversal warning  and overbought indicators but remain in a rising RTC.  Thing is the trans have been so powerful lately, I really want confirmation of this doji before calling them lower.  So we need to see how this one goes on Tuesday.  For the time being, it's not bearish yet.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow                                                                      average  points

January    5      7      6           3       0.533

February   2      1      1           3       0.833     176

     And the winner is...

The charts are not looking particularly bearish to me tonight as op-ex week grinds on.  Kind of like last night.  But my bullish call then didn't work out so hot tonight and I always hate to go against what the futures are telling me in the overnight.  On the other hand, we have that Dow triangle and a VIX in the toilet.  The overall picture seems to be a reflection of the general wayward movement of the market recently, so with no real handle to grab on to, I'm just going to punt and call Tuesday uncertain.  I know J-Trader's going all-in short here, and I admire and respect that, but personally I'm not seeing it.  I could be wrong.

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 and will continue to do so until I see a trend developing one way or the other.

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