Actionable ideas for the busy trader delivered daily right up front
- Wednesday uncertain.
- ES pivot 1666.25. Holding above is bullish.
- Rest of week bias higher technically.
- Monthly outlook: bias higher.
- ES Fantasy Trader standing aside.
|Open wide, Seymour!|
The technicals (daily)
The Dow: We've had three strong rising RTC's this year and the Dow is now well into the third one. this one began April 22nd and has a strong Pearson's of 0.957. And we're still tracking it right up the middle. So as the upper BB continues to rise away, I see no reversal signs on this chart. The only pattern is that lately we've been getting one up day followed by one doji day, but that's not really much to go on.
The VIX: On Tuesday the VIX put in a bullish one white solider pattern with a 2.69% gain for our highest close since May 2nd. It also (finally) retraced 50% of the downside gap created on May 3rd, broke out above its recent consolidation top of 13.25-ish and turned the indicators back northward. So I think this one's looking higher on Wednesday.
Market index futures: Tonight all three futures are higher at 1:20 AM EDT with ES up by 0.06%. We've now seen a pair of spinning tops on the ES daily, but all reversal signs have been notoriously unreliable this year so far. We also remain firmly inside a rising RTC and with ES drifting higher in the overnight, it doesn't seem to be heralding any imminent correction. With the recent pattern of big up days followed by two or three days sideways, Wednesday could be yet another spinning top.
ES daily pivot: Tonight the pivot inches up from 1665.00 to 1666.25. With ES just meandering in the overnight, we broke under the new pivot at midnight, but ES has just punched back through as I write this, and that's always a bullish sign.
Dollar index: Sunday night (recall that Monday was pretty much a lost day for me) I didn't want to believe the clear bearish evening star the dollar was showing. Too bad too, because it fell sharply on Monday and then put in a second red candle on Tuesday, though sitting a bit higher for a 0.13% gain. Still, this chart now looks decidedly bearish. We have a completed bearish stochastic crossover and a bearish RTC trigger. Taken together, these are usually good predictors of a move lower.
Euro: And the euro on Tuesday gave us a complementary bullish RTC trigger with a second consecutive up day. And the overnight is up again, and the indicators are coming off oversold. So I'd say the euro's looking higher on Wednesday which squares with my call for a lower dollar.
Transportation: After a stellar run, the trans have underperformed the Dow for two days running now. Tuesday's doji left us on the edge of the latest rising RTC too. So we're technically still in an uptrend but the momentum is clearly fading. If the trans are going to stay alive, Wednesday is do or die. But we've seen this movie before - I'm going to need some confirmation before I believe we're going seriously lower.
Accuracy (daily calls):
Month right wrong no call conditional batting Dow
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 7 5 5 3 0.667 328
May 1 4 5 4 0.556 -30
And the winner is...
Unlike Sunday night (and who knows what happened to Monday night) we're finally seeing a few bearish signs but nothing too convincing. But it's all moot because Wednesday's going to be a big day, news-wise We've got Uncle Ben talking, home sale numbers, and Fed minutes. Any one of these could jerk the market around. So since Wednesday will be news-driven, can only call the close as uncertain. My guess is that we won't see any big moves either way.
ES Fantasy Trader
Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13. Tonight we stand aside with yet another "uncertain" call.