Friday, June 14, 2013

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1624.58.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader remains short at 1600.25.

June is starting off very badly for the Night Owl, prediction-wise, as I'm now on my worst accuracy streak since I started keeping score over a year ago.  Maybe it's the volatility or the Florida heat, but we're definitely hitting a dead spot here.  And speaking of Florida, the Night Owl is flying back north (and not on Southwest, the Airline of the Damned) next Monday.  That means I'll be taking Sunday and Monday night off, so the next publication won't be until next Tuesday night.  Meanwhile, let's see if we can figure out anything at all from these tricky charts.

The technicals (daily)

The Dow: The Dow staged a big comeback on Thursday, due in part if one is to believe it, a WSJ article about how the Fed is going to stand pat next week.  Well that or not, it effectively stopped what was looking like a developing rout in its tracks and popped us right back out of the descending RTC for a bullish setup, our second in four days.  It also pulled the plug on last night's bearish stochastic crossover and put the Dow back above its pivot with a bullish engulfing pattern.  So just as the sun comes out after a hurricane, this chart is now looking fairly positive compared to last night.

The VIXAs fast as the VIX popped  on Wednesday, that;s how fast the balloon burst on Thursday, completely giving up all those gains and a bit more to close back at 16.41.  I'd been looking for a lower VIX but honestly didn't expect it before Friday.  But now with a bearish harami in VVIX and the VIX falling out of its rising RTC for a bearish setup, it could move lower again on Friday.  I'm certainly not expecting it to jump back to 18+ again.

Market index futures: Tonight the futures are mixed at 1:r45 AM EDT with ES down by 0.06%, YM down 0.05% but NQ up 0.7%.  With such small overnight moves, this isn't much of a surprise.  After tow bad days dragged ES back into its descending RTC, on Thursday one mighty blast pushed it right back out again for another bullish setup.  And like the Dow, this chart is looking much healthier tonight than last.

ES daily pivot: Tonight the pivot rises from 1619.25  to 1624.58.  We remain floating above the new number, so that's bullish.

Dollar index: The dollar remained locked in a straight descending RTC on Thursday, down another quarter percent as it sank further below its 200 day MA.  At least I was right when I wrote last night, "still no sign of a reversal".  And recall that I mentioned 55.38 as support.  Well lookee where the dollar closed on the $USDUPX: 55.3828.  And we closed there on a doji, so for the first time in days, there's at least a possibility of a move higher on Friday, but with so much downward momentum, we have to have confirmation.  Though speaking of momentum, that has actually begun rising, three days ago in fact.  So now I'd say there's at least a chance of a higher close on Friday.

Euro: The euro has now put in two consecutive spindly spinning tops warning of a reversal although it remains stuck in its rising RTC.  However, the overnight is forming as a dark cloud cover.  Unless the euro can close above 1.3376 on Friday, this chart will be looking bearish for Monday.  It is starting to look toppy.

Transportation: Pretty much the same story as the Dow here.  The trans posted a big 1.90% gain, stopping only on resistance at 6346.  With the indicators sort of wandering around now, we'll need to see if the trans can crack this level on Friday.  There seems to be some gas back in the tank, but the way things have been going lately, who knows.

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 Poll

  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   6/8
  9  2/25       30         52        -      -   1516   6/9
 10  3/4        29         39        -      -   1518   6/10
 11  3/11       41         26        +      +   1551   7/11
 13/18       41         37        +      +   1561   8/12
 13  3/25       31         38        +      -   1557   8/13
 14  4/1        38         38        +      x   1569   9/14
 15  4/8        32         50        -      -   1553   9/15
 16  4/15       33         50        +      -   1589   10/16   9/16
 17  4/22       19         63        -      -   1555   10/17   9/17
 18  4/29       33         58        -      -   1582   10/18   9/18
 19  5/6        50         31        +      +   1614   11/19  10/19
 20  5/13       37         37        +      x   1634   12/20  10/19
 21  5/20       50         25        +      +   1667 
 22  5/28       ??         ??        +      ?   1650 (poll data missing)
 23  6/3        29         38        -      -   1631
 24  6/10       38         38        +      x   1643

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 that was right.   However, the poll as a whole was exactly tied, so there is no right or wrong and we therefore skip this week.  Therefore we  continue the year with an accuracy of 12  for 20, or 60%.   The poll as a whole remains 10  for 19 or 53%.

This week, we see that for the third time this year we have an exact tie - 37.5%.  No doubt this reflects the recent increase in volatility which is churning the market as it sends the charts every which way.   And along those lines, after one week bearish, I've now switched my own vote back to bullish.

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      7      5      5           3        0.667    328

May        3      4      6           4        0.636     85

June       1      5      2           0        0.167   -256

     And the winner is...

I've been so wrong lately I'm getting afraid to make any predictions at all.  What I'm expecting now is a typical pause after a big move up, perhaps a doji day, so that simply translates into a call for Friday uncertain.

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 remain short at 1600.25.  This trade started off well enough but went horribly wrong while I was asleep.  By the time I woke up the next morning, the damage was done.  So we'll take a bit of heat and see if the yo-yo will yo back in our favor anytime soon.


  1. I feel for you. You seem to be in the same slump that I was in (in May). I was wrong the entire month. But April and June was (have) been good. My theory is that we all have a certain inner frequency and when the market lines up with that frequency, we know how to react. In my charts, I have created two seperate periods, one for a short bull market and one for a short bear market. Each of them are based on a 30 day cycle, but my slopes/momentum period changes based on the type of market.

    See if that work for you.


    1. Thanks very much for the sympathy. Interesting observation about the different periodicity between bulla nd bear markets - that is certainly true.

      I can't really complain too much as I'm still up just over 13% YTD. But my core REIT holdings have gotten hit hard since Bernanke opened his mouth last month and that's dragging down the bottom line. OTOH, I'm owning those for the dividend, not appreciation.

      Meanwhile, I've just cut back on my actual trading until I can figure out what's going on again.

      Have a great weekend!


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