Tuesday, March 12, 2013

Tuesday lower if ES pivot fails

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower if we break under ES pivot, else higher.
  • ES pivot 1547.75.  Holding above is bullish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader remains short at 1538.25.

And the hits just keep coming.  The Dow is now on a seven session tear, even longer than the one we got back in January.  They say what goes up must come down, but they never say when.  Let's see if we can't get the charts to tell us.

The technicals (daily)

The Dow: At the risk of sounding like a broken record, this is the third night in a row where all the factors are unchanged.  Just look at last night's analysis and that's it.  Rising RTC, overbought indicators, you know the drill.  So once again, no bears in sight.

The VIXWhile Monday's 0.35% gain in the Dow may have been unremarkable, the VIX took an impressive 8.18% dive on a deep red marubozu to end at 11.56.  I had to back out all the way to the monthly chart to find the last time the VIX was this low - February 2007.  And at this level, it's at the lower end of the range it sat in from 2004 through 2006.  But unlike then the lower BB now just continues to fall away, now down to 6.15!  And while we're looking at the monthly chart, I'll note that so far, March is forming a big bearish engulfing pattern.  I want to say that the VIX has nowhere to go but up from here, and yet I'm not seeing it right now.

Market index futures:Tonight all three futures are lower at 1:14 AM EDT with ES down by 0.08%.  However, like last night, the moves are slight and there's little guidance from the overnight action.  The decent gain in the daily ES though keeps us locked in the rising RTC and climbing the upper BB.  ES is going to have to close below 1547 on Tuesday to initiate even a bearish setup.  With the positive bias of March op-ex week, that seems unlikely.

ES daily pivot: Tonight the pivot rises again from 1547.75  to 1552.92. This now leaves us less than two points above the new pivot, putting it into play.   Unlike last night, the gradual drift lower since around9:30 PM suggests that ES might have some interest in visiting this level.  But it remains bullish unless we break under.

Dollar index: The dollar gave back most of Friday's gains on Monday, dropping 0.18%.on a bearish dark cloud cover.  Nevertheless, we remain in a rising RTC so we need some confirmation on Tuesday before declaring this uptrend over.

Euro: Meanwhile the euro continued its consolidation in the 1.3000-1.3050 neighborhood.  A small gain on Monday, a small retracement in the new overnight, nothing to see here.

Transportation: After a big gain on Friday, the trans put in a small spinning top on Monday, at least warning of a reversal with a tepid 0.12% gain.  But with such strong upward momentum, I hesitate to call them lower on just that basis.

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.

Wk.# Week   % Bullish  % Bearish  NightOwl Poll SPX  Accuracy

  1  12/31      40         48        -      -   1402   0/1

  2  1/7        47         30        +      +   1466   1/2

  3  1/14       52         15        +      +   1472   2/3

  4  1/22       50         21        +      +   1486   3/4

  5  1/28       44         26        +      +   1503   4/5

  6  2/5        40         36        +      +   1513   5/6

  7  2/11       43         25        +      +   1518   6/7

  8  2/19       21         43        -      -   1520
  9  2/25       30         52        -      -   1516
 10  3/4        29         39        -      -   1518
 11  3/11       41         26        +      +   1551     

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.  The "Poll" column is how the majority of participants 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 I voted bullish four weeks ago, so both I and the majority were again correct.   We therefore continue the year with an accuracy of 6  for 7, or 86%. 

And this week I switched my vote from bearish to bullish.   That keeps me in sync with the majority of the poll, which flipped from 29-36 bullish-bearish to 41-26.  My shift was due to the change in the weekly and monthly SPX candles which are now looking quite bullish following the recent run-up.

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      4      2      1           0        0.667    215

     And the winner is...

Little has changed tonight compared to last night.  But I'm becoming a bit concerned about the failure of the trans to make any real headway past 6150 in a week now and at seven straight, this rally is starting to get a little long in the tooth.  We've also got the futures drifting lower tonight and that's different.  Yet there's still no real bearish signs to speak of so I'm going to make a conditional call: if ES remains above its pivot of 1552.92, then we'll close higher Tuesday.  But if ES breaks convincingly below it by mid-morning, we close lower.

ES Fantasy Trader

Today we took a nasty 13.5 point loss following another unproductive round of tape-fighting.

Portfolio stats: the account drops to $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we simply stand aside  and do some head-scratching.

BOT    10    false    ES    MAR13 Futures     1553.00    USD    GLOBEX    12:15:26
SLD    10    false    ES    MAR13 Futures     1538.50    USD    GLOBEX    MAR 7 01:10:51 

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