Tuesday higher if ES pivot holds

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Tuesday higher only if ES stays above pivot, else lower.
  
• ES pivot 1675.58.  Holding above is bullish...
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1643.00.

Recap

So the rally rumbles on, eight days now including two dojis that both came to naught.  But we all know that what goes up must come down - the only question is when.  And that's what the charts will now tell us.

The technicals (daily)

The Dow: Monday's doji was non-confirmed on Tuesday, but not by much, with a 20 point advance on reduced volume.  So although we remain in a rising RTC, the closing prices are now more sideways than higher and the indicators are now hitting extreme overbought levels (RSI = 98.4)  Today's action also took kind of a right angle off the upper BB.  All of this makes me think that we're heading for a down day pretty soon.  Could it be Wednesday?  Maybe, but there's still no solid reversal sign on this chart.

The VIX:  On Tuesday the VIX lost another 0.35% but that drop belies the flow of the candles, which is now more sideways than lower.  And with RSI now at zero for two days in a row, I can't help but think that the VIX is due for a bounce soon.

Market index futures: Tonight the futures are mixed at 1:01 AM EDT with ES down 0.01%, YM up 0.01%, and NQ up 0.06%.  Call if basically unchanged..  However, after Tuesday's nice run, we're not seeing the same amount of follow-through that we've been getting recently at this hour.  And the sideways action in the overnight is pushing us out of the rising RTC for the first time in nine days.  Meanwhile RSI remains pegged at 100 for an impressive five days now.  I'd say the odds are slowly increasing that we may be seeing a down day pretty soon.

ES daily pivot: Tonight the pivot rises once again from 1670.25  to 1675.58  The only difference is that tonight we're only a point and a half above the new number.  Still, as long as we can hold above, that remains a bullish sign.

Dollar index: The dollar tried to do some more gap-filling on Monday but ended up putting in a red candle good for just a 0.05% advance.  The overall look of this chart is the little engine that couldn't.  Although the indicators are still a ways from overbought, I'm thinking the dollar goes lower on Tuesday.

Euro: On Tuesday the euro tried to break down but finally pulled right back to its 200 day MA.  Th3e overnight remains close to it, up just 0.06%.  So the wavering continues.  However, we finally have a bearish crossover on the stochastic, so that favors a move lower on Tuesday.  But then I'm thinking the dollar chart also looks lower - one of those two thoughts is wrong.  At this point, it's a toss-up - there isn't any super clear direction here.

Transportation: After a bearish harami on Monday the trans continued with a bullish engulfing pattern on Tuesday.  That pretty much cancels out with the trans unable to break resistance at 6472.  Today's gain was also not enough to regain the rising RTC, so that's a bearish trigger.  And by the old reliable down/up indicator, Tuesday should be down, since the trans have been alternating between gains and losses for eight days now.

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.  Note that I've corrected the data in the accuracy columns due to a mistake I made in week 13 but only just noticed now.
 

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

 12  3/18       41         37        +      +   1561   8/12

 13  3/25       31         38        +      -   1557   8/13    9/13

 14  4/1        38         38        +      x   1569   9/14    9/13

 15  4/8        32         50        -      -   1553   9/15    9/14

 16  4/15       33         50        +      -   1589   10/16   9/15

 17  4/22       19         63        -      -   1555   10/17   9/16

 18  4/29       33         58        -      -   1582   10/18   9/17

 19  5/6        50         31        +      +   1614   11/19  10/18

 20  5/13       37         37        +      x   1634   12/20  10/18

 21  5/20       50         25        +      +   1667   12/21  10/19

 22  5/28       37         33        +      +   1650   12/22  10/20

 23  6/3        29         38        -      -   1631   13/23  11/21

 24  6/10       38         38        +      x   1643   13/24  11/21

 25  6/17       32         40        +      -   1627   14/25  11/22

 26  6/24       13         46        -      -   1592

 27  7/1        25         42        -      -   1606

 28  7/8        42         29        +      +   1632

 29  7/15       48         22        +      +   1680

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 correct.  However, the majority of the poll voted bearish, so that's a miss for them.   Therefore we  continue the year with an accuracy of 14  for 25, or 56%.   The poll as a whole drops to 11 for 22 or 50%.

This week I remain with the majority in calling the SPX higher in 30 days.  Both the weekly and monthly charts are now looking considerably stronger than they were two weeks ago.

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       6      5      6           0        0.545    543
July       6      1      0           2        0.889    467

     And the winner is...

The current eight day uptrend has featured three doji reversal warnings so far and all three have failed.  The economic news that came out on Monday that I thought would be BTE was kind of mixed but the market went up anyway.  Now we're getting more reversal warnings but once again no real clear bear signal.  And  until I do see that, I can't really call the market lower.  OTOH, it's already been a pretty nice run and I'm not sure how much longer we can go.  So I'm going to make another conditional call: if ES manages to stay above its pivot by mid-morning Tuesday, we'll close higher.  If we break under before then, then we close lower.

ES Fantasy Trader

Portfolio stats: the account remains at $115,000 even after 14 trades (11 for 14 total, 6 for 6 longs, 5 for 8 short) starting from $100,000 on 1/1/13.  Tonight we remain short at 1643.00.  I'm still not quite ready to give up on this one.