Friday, April 12, 2013

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1576.08. .  Holding above is bullish..
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

Last night I was thinking we might see a doji on Thursday.  No such luck as the Dow just continued motoring higher to close up another 63 points.  But hey, I'll take it.  I've actually been trading very little lately as I'm just letting my longs run.  But you gotta wonder - just how far can they run?  We now scan the charts for a glimpse of the finish line.

The technicals (daily)

The Dow: OK, so on Thursday the Dow gave us yet another green candle, for a three white soldiers pattern.  Actually four white soldiers by this point, heck it's a whole squad of white soldiers.  But they are marching up a very tight (Pearson's = 0.996) rising RTC.  The indicators are now (finally) overbought, though the stochastic still has yet to begin its bearish crossover.  So I still can't call a top here (I tried that two days ago and got my head handed to me).

The VIXAnd I was right last night to resist the temptation to call the VIX higher just because it had dropped so much.  And sure enough, it went even lower on Thursday, down another 0.97%.  We remain in a descending RTC and the stochastic, while quite low, still isn't interested in a bullish crossover.  Next support coincides with the lower BB at 11.40.  However, the last three VIX downtrends never made it to their lower BB so that pretty much leaves us right where we were last night - still too soon to call the VIX higher.

Market index futures:Tonight all three futures are lower at 1: 38 AM EDT with ES down by 0.19%.  Es traded above its upper BB all day Thursday and put in a stubby spinning top.  The new candle is forming as a dark cloud cover and is sitting right on the edge of the rising RTC.  Any lower and it will become a bearish setup.  The indicators are also now overbought and the stochastic looks ready to do a bearish crossover any minute.  So this chart is now looking ready to roll over.

ES daily pivot: Tonight the pivot rises again from 1576.08  to 1587.17.   This time ES was not able to remain above the new pivot, so the overnight drift lower is now bearish.

Dollar index: Well the dollar did put in a green candle on Thursday, but it came on a gap down, so my call for a higher close was wrong as the dollar lost 0.37% to close on its lower BB.  But that has begun falling away and the overall trend remains down so there's no real reversal signs here tonight.

Euro: And of course since my dollar call was wrong, so was my euro call, as it hit its upper BB again on Thursday and closed just below it at 1.3118.  So we remain in the rising RTC, the upper BB is climbing away,  and the indicators are all broken-overbought.  Ergo it's too soon to call this uptrend over.

Transportation: The trans now have one of those up one day down the next things going.  They lost 0.27% on Thursday after Wednesday's big jump.  But we're still solidly inside a rising RTC and indicators are not yet overbought so it's too early to call a top here either.

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      7      5           2        0.500    121 

April      3      2      2           0        0.600     20

     And the winner is...

We're in a similar situation tonight as last night - a lot of indicators flashing reversal warnings, but ones that require confirmation.  We didn't get it on Thursday, so the result is that things are looking a bit more bearish tonight, but I'm still not comfortable calling for a down day without confirmation.  So unfortunately, I have to call Friday uncertain again.  Perhaps this will be the doji I thought we'd see (but didn't) on Thursday.

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 yet again because of the "uncertain" call.

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