Friday, March 1, 2013

Friday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday lower, low confidence...
  • ES pivot 1508.33.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

Darn - if Thursday's session had ended just two minutes earlier, my call for a higher close would have been correct but unfortunately, something spooked Mr. Market in the closing minutes and we ended down 21 points.  What does this mean for Friday?  Let's take a quick look at the charts.

The technicals (daily)

The Dow: The net effect of this sell-off was to give us a big inverted hammer of a candle, one whose tail pierced the upper BB.  Sitting at the top of Wednesday's big run-up, this is looking a bit bearish to me

The VIXI missed the VIX on Thursday too - it rose 5.3% on a green hammer.   However, the indicators continue to move lower, so this chart is mixed - no good call here.

Market index futures:Tonight the futures are mixed at 1:32 AM EST with ES down by 0.12%, YM down 0.02% but NQ up 0.05%,  The indicators are still rising off oversold but with Thursday's red spinning top and the new candle forming below that, this chart is now looking somewhat bearish.

ES daily pivot: Tonight the pivot inches up from 1508.33  to 1515.50.  With ES kind of drifting about in the overnight, this gain now puts us below the new pivot, a bearish sign.

Dollar index:The dollar just popped right back up to its resistance at 56.40 on Thursday to remain in a month-long uptrend.  This canceled what looked like a developing downtrend the last two days and could set the stage for even higher on Friday.

Euro: I missed this one too - the euro did not move higher on Thursday, it completely retraced all of Wednesday's gains and formed a mean-looking bearish engulfing pattern in the process.  The overnight is actually up 0.15% but sitting below the pivot as we are, I'm not too sure how much follow-through there will be into Friday,  So despite oversold indicators, I'm feeling cautious about a rising euro for Friday.

Transportation:And finally, another doji in the trans, which did manage a 0.07% gain on Thursday, hitting their upper BB like the Dow.   After Wednesday's monster move, this seems to suggest that we may be getting ready to retrace on Friday.

Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131

     And the winner is...

Hmm - a tough one.  With the sequester now officially about to start, it's not clear how the market will react.  So far, it hasn't had much of an effect at all, but that was the rumor.  Now it's news.  And the charts have taken a turn for the bearish this evening.  Add to that the fact that the first day of March, unlike most months, is historically weak and I'm afraid I'm going to have to call for Friday lower.

ES Fantasy Trader

I think we had the right idea going long last night but I lost my nerve and bailed out too early around lunch time on Thursday.  The result was still a win, but only half a point.  Oh well.  At least I got out before the afternoon sell-off.

Portfolio stats: the account now rises to $99,375 after 7 trades (6 for 7 total, 3 for 3 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight with the headline risk around the sequester, we're just going to watch from the sidelines.

SLD    10    false    ES    MAR13 Futures     1518.00    USD    GLOBEX    12:24:59
BOT    10    false    ES    MAR13 Futures     1517.50     USD    GLOBEX    01:22:14

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