Thursday, April 25, 2013

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1574.58 Holding above is bullish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

After a long period earlier this year where the oscillators weren't it seems that the market is getting back into the swing of things.  On Wednesday the SPX gained a whopping 0.0 points while the Dow lost 43, so there goes my call for the day.  What is the meaning of this sudden onset of dojiosity?  The charts will surely explain it, so let's take a peek.

The technicals (daily)

The Dow: Wednesday's loss was almost but not quite a dark cloud cover.  And the close still keeps us well inside a rising RTC.  And with indicators continuing to rise off oversold it's too early to call this the start of a downtrend.  The chart doesn't really look as bad as a 43 point down day might seem.

The VIXOn Wednesday the VIX put in a baby star, up just 0.96%.  That keeps it in a descending RTC and keeps the indicators falling towards oversold.  The stochastic is also still several days away from being in position to form a bullish crossover so I'd say the reversal indication is weak and requires confirmation.  I'm guessing the VIX will not be able to capitalize on this star on Thursday.

Market index futures:Tonight all three futures are higher at 12:42 AM EDT with ES up by 0.11%.  ES put in a tiny little star on Wednesday which keeps it well inside its rising RTC.  And the modest gains in the overnight are non-confirming that doji.  And while RSI has now turned lower before ever reaching overbought, the stochastic continues to rise but is still not in position to begin a bearish crossover.  So with no resistance until the 1584 area it looks like there's still a bit of gas left in the particular tank for Thursday.

ES daily pivot: Tonight the pivot rises again from 1566.42  to 1574.58.  But even with this jump ES remains above the new pivot for a continuing bullish indication.

Dollar index: After Tuesday's hanging man the dollar gave us an inverted hanging man on Wednesday, losing 0l19% in the process.  But it wasn't enough to exit the rising RTC.  The indicators are now in overbought-broken mode so no help there.  With two days of vacillation and limited guidance, it's too tough to determine where this chart is going on Thursday..

Euro: On Wednesday the euro gave us a nice green hammer that drove RSI oversold.  The overnight seems to be confirming that and is now up 0.15% to just barely exit the descending RTC for a bullish setup.  So this chart looks ready to move higher on Thursday.  If so, that would imply a lower dollar, which is certainly plausible given the two dojis there.

Transportation: Once again, we have a divergence between the Dow, down 0.29% on Wednesday, and the trans which advanced 0.62%.  This keeps them in a rising RTC and while RSI has just gone overbought, the stochastic is still a ways from forming a bearish crossover.  So I'd say more upside is possible here 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      7      5           2        0.500    121 

April      6      3      5           2        0.727    421

     And the winner is...

I know my call last night didn't worm out too well but I'm still seeing the same forces at work tonight.  Rather than shifting my view because of Wednesday's failure, I'm going to stick to my guns.  I note the trans on a roll, the VIX in no hurry to rise, the TLT stuck in consolidation mode, a rising euro, and futures holding onto gains.  So I may regret this, but I'm going to call Thursday higher.

ES Fantasy Trader

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again, for the same reasons as last night.

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