Thursday, March 28, 2013

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 1554.33.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Well that's what happens when you go out on a limb sometimes - you end up on the floor.  But I wasn't far wrong, with the Dow dropping  just 33 points on Wednesday.  And at least the Nasdaq did finish with a slight gain.  But enough of that, it's time to figure out Thursday - bring back my charts!

The technicals (daily)

The Dow: The Dow took a big dump out the gate on Wednesday only to quickly recover and spend the rest of the day threading about its pivot.  The result was a hanging man around the top of Tuesday's range.  So we now seem to have some support around 14,522, the line that was resistance until two days ago.  Beyond that, it's hard to say.  The only real pattern I can see here is that we're still in this alternating red-green business, now into its eighth day in a row.

The VIXThe VIX gained 2.98% but did it on a red candle, remaining stuck in the 13 1/3 area, a number we've visited for eight days in a row now.  Resistance at 13.75 is proving tough for the VIX to crack.  With indicators continuing to fall there's no sign it's going to be any easier on Thursday.

Market index futures: Tonight all three futures are lower at 12:42 AM EDT with ES down by 0.39%.  Wednesday's red candle in ES makes Tuesday's hanging man look like a top.  This chart  has gone from looking bullish to bearish in one day.

ES daily pivot: Tonight the pivot barely nudges from 1554.25  to 1554.33. With ES drifting lower in the overnight, we broke under at 9:30 PM, a bearish sign.

Dollar index: The dollar made its move on Wednesday, gapping up 0.44% to close right on its upper BB with a little spinning top.  This kind of move generally pulls back in short order.  Look how far we are from the pivot too.

Euro: At least I got this right when I wrote last night "I see no reason why [the euro] can't go lower again".  It completed it break under the 200 day MA on Wednesday to remain struck in it s descending RTC.  We're pretty oversold at this point and the stochastic looks like it's trying to set up a bullish crossover, but nothing yet.  So I'd say the slide's still not done.

Transportation: And finally, some divergence here with the trans gaining 0.16% even as the Dow fell 0.23%.  This hanging man closed just outside the descending RTC so that's a bullish setup.  Add in a nascent bullish stochastic crossover and I'd say we have a shot at more upside on Thursday.

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
March      5      6      5           2        0.538    1

     And the winner is...

Well we've got the week, the month, and the quarter all ending on the same day.  Often that's cause for window dressing but in this case, the end of March is historically quite weak.  And the charts, which looked fairly promising just last night, now seem to be reflecting that weakness  It's a difficult call and I probably should say we're going higher just because the Dow fell on Wednesday, but honestly I'm not feeling the love tonight, baby.  I'll be happy to be proven wrong because I'm always net long, but I'm going to call Thursday lower.  See you all next Sunday night!

ES Fantasy Trader

 Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight we stand aside because I'm not seeing a real trend developing.


  1. First quarter done. The next 3 quarters are all yours. Hang in there and keep rowing that boat. I appreciate your blog.

  2. I know - how time flies. One entire quarter gone. It doesn't seem like a day over three months.


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