Tuesday, June 11, 2013

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1641.66.  Holding below is bearish.
  • Rest of the week bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

I was expecting a small gain for Monday and that's what we got - for about the first tow hours.  Then we moved a bit lower and the Dow closed down all of 9.5 points.  That's what I get for not calling "uncertain": when I'm expecting a small move.  But not matter, this result is still interesting and we now investigate what it means for Tuesday.  Read on...

The technicals (daily)

The Dow: On Monday the Dow gave us a doji sitting on top of last Friday's big run up.  While this signals a possible reversal, these haven't been doing too well this year and we're still a long way from overbought on the indicators.  So this is just a flashing yellow light at this point.

The VIXThe VIX surprised me on Monday by not following through on its previous two days of losses, gaining instead 1.98% as its 200 day MA provided some support.  But the indicators continue to fall off overbought and we do now have a bearish RTC trigger so I think any upside moves will be limited.

Market index futures: Tonight all three futures are lower at 1:42 AM EDT with ES down by 0.14%.  Monday's candle was a bearish inverted hammer.  But it came outside the descending RTC and that's a bullish setup.  Also, the indicators are only about halfway from oversold to overbought, so this chart is pretty murky tonight.

ES daily pivot: Tonight the pivot rises from 1633.50  to 1641.66.  This jump, combined with ES's move lower now puts us below the new pivot - a bearish sign.

Dollar index: The dollar put in early gains on Monday only to give them back as they day wore on, leaving behind a red candle sitting above Friday's green for a dark cloud cover.  But - the indicators remain oversold so it's not clear how this will play out..

Euro: I missed this one - rather than going lower, the euro put in a strong bullish engulfing candle on Monday and we're getting some positive pin action in the overnight.  This keeps us inside a rising RTC so despite highly overbought indicators, I can't say I see a move lower here now.

Transportation: The trans on Monday gave us a small red spinning top pretty much as expected.  But it was enough to put a damper on the indicators which actually turned lower before even reaching overbought.  But with a bullish RTC setup the picture on this chart is decidedly mixed.  I'm going to wait & see on this one.

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      3      2           0        0.250     52

     And the winner is...

This is one of those nights where we're seeing a combination of reversal (lower) warnings that require confirmation along with internal conflicts in the charts, at least according to my system of analysis.  Bottom line - there's no real clear-cut direction right now.  So, much as I hate to wimp out because I still see something of a positive bias, the only choice I have in this situation is to call Tuesday 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 stand aside with the "uncertain" call.

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