Thursday, April 4, 2013

Thursday higher if ES pivot passed

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher if ES breaks above pivot, else lower.. <- i="">revised at 1:51 AM EDT

  • ES pivot 1557.83.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
  • Recap

    Hey North Korea,
    Wow - you take one day off and all heck breaks loose.  On Wednesday the Dow dove 112 points on a combination of worse than expected economic numbers and to hear tell, the demented ravings of some baby-faced pipsqueak from North Korea by the name of Kim "Mentally" Ill Jong Long Dong or whatever he calls himself.  Hey Kim, you've got no idea whom you're playing with.  The US might have trouble dealing with cowards who blend into civilian populations for defense, but when it comes to dropping nukes on rogue nation-states, we've got no equal - literally.  Ask Tojo how all that belligerent talk worked out for him.  And with that word to the wise, we're back to casting an eagle eye (or owl-eye) on what's in store for Thursday.

    The technicals (daily)

    The Dow: Ahem, the Dow, as we noted, took a big dump on Wednesday, one that broke us out of an admittedly shallow rising RTC while continuing this crazy up-down-up-down pattern.  It's now been  fourteen straight sessions, nearly three weeks, that we've had alternating up and down days.  The last time we had two consecutive up days was March 11th!  But Wednesday was the biggest move since February 25th and that is not to be dismissed lightly.  And this loss didn't even bring us close to oversold on the indicators so more downside is not out of the question.

    The VIXThe VIX spiked 11.19% on Wednesday, traveling from the bottom of its recent range to the top in one day.  After touching its upper BB, it retreated a bit to close at 14.21.  That still leaves a bit of room to run higher as the indicators are only halfway form oversold to overbought.

    Market index futures:Tonight all three futures are barely higher at 12:34 AM EDT with ES up by just a tick, or 0.02%.   Wednesday saw the biggest drop in ES since February 25th, one big enough to exit the rising RTC for a bearish setup, and to form a bearish engulfing pattern.  Only thing is, is that ES has got this red/green thing going on too, having now put in alternating up/down closes for fourteen straight sessions.  On that basis alone, one would be tempted to call ES higher on Thursday even though the overnight is showing little enthusiasm for that so far.  However, the indicators are still falling and technically this chart looks bearish.

    ES daily pivot: Tonight the pivot tumbles from 1562.25  to 1553.42.  And even that wasn't enough to bring ES back above the new pivot, so that remains a bearish sign.

    Dollar index: After a nicely executed evening star last week, the dollar continued moving lower on Thursday even as the Dow dropped too.  This leaves the dollar in a clear descending RTC with indicators moving lower.  More downside possible here.

    Euro: The euro posted a small gain Wednesday but continues to encounter resistance just below its 200 day MA, around 1.2855.  The overnight is just about flat but having just exited a short descending RTC for a bullish setup with rising indicators and now being back above its pivot, the euro just may mount a test of the MA (at 1.2879) on Thursday.

    Transportation: And finally the trans continued lower for the third day in a row, dropping 1.33% to close just above their lower BB and forming a perfect bearish three black crows pattern.  They also broke support at 6027 so this chart is looking rather weak for 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    1

    April      0      0      1           0        0.000      0

         And the winner is...

    With copper in free-fall, the TLT in a month-long uptrend, an ugly-looking trans chart, a VIX that doesn't appear to have topped yet, that lunatic on the loose in North Korea, and some iffy jobs number coming out in the morning, the logical call is Thursday lower.  That said, I'm mindful of the possibility of a DCB the continuatrion of this one day up/one day down business,and the seasonality of the first week of April.  So in light of ES's recent reversal higher since I first published this an hour ago, I'm revising my call and now making it conditional: if ES breaks above its pivot of 1553.42 by mid-morning Thursday, we close higher.  If it bounces off or otherwise fails to pass the pivot, we close lower.

    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 given the current continuing tricky environment.


    1. Good to have you back. Are you trying to take over the tonight show with your monologue?


      1. Well I've certainly already got the right time slot. Next time Jay calls me for car repair advice I'll ask him about doing a guest spot.

        "Do you know the Gettysburg address?"
        "Well not the *exact* address."

        "When did Lincoln give the Gettysbug address?"
        "Umm... 1942?"
        "Ah, no it was a bit earlier than that".

        "How many stars are on that flag over there?"
        "I can't count them, it's waving too fast".


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