Tuesday higher

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

• Tuesday higher, low confidence.
  
• ES pivot 1606.83.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well looks like the tradition of the first day of July held up once again on Monday as the Dow rose 65 points, admittedly well off its intra-day high, but a win nonetheless.  And my call worked out well too, with ES moving above its pivot at 2:25 AM and then making a series of attempts to break back under between 4 and 5:30 AM to no avail.  And up we went from there.  Now we move on to Tuesday in this mid-week holiday shortened week.

The technicals (daily)

The Dow: Despite the Dow's 0.44% gain on Monday, it still counted as a bearish RTC trigger, having closed outside the rising RTC for two days in a row.  The indicators are very close to overbought now and the failure of the Dow to hang onto the 15K level for three days running is somewhat of a bearish sign.

The VIX:  The VIX canceled Friday's bullish setup in emphatic fashion by dropping 2.91% on Monday.  While this also served to depress the indicators further into oversold territory, the stochastic is still not even starting to curve up for a bullish crossover.  And with no further support until 16.10 (we closed at 16.37) there's a good chance the VIX still has room to run a least a bit lower.  I note too that VVIX broke under its 200 day MA on Monday but put in a hammer in the process.  So Tuesday could be a bottoming day for the VIX.

Market index futures: Tonight all three futures are higher at 12:49 AM EDT with ES up by 0.26%.  

ES daily pivot: Tonight the pivot rises from 1602.67  to 1606.83.  But even that wasn't enough to move ES under the new pivot so this data point remains bullish.  ES seems to be having some trouble making up its mind, putting in a third straight spinning top in a row on Monday.  But the late night pin action remains positive right off the top of Monday's candle.  And with indicators not yet overbought, last night's bearish signs are canceled.  There's no resistance now til 1618, so that's not looking out of the question.

Dollar index: Last night I mentioned some impending resistance for the dollar and on Monday it was indeed unable to crack the 57 - 57.10 area, ending down 0.14% in a move that just took it out of its rising RTC for a bearish setup.  That also finally brought the indicators off extreme overbought and just created a bearish stochastic crossover so now I feel more confident in calling the dollar lower for Tuesday..

Euro: Last night I wrote "this chart looks ready to move higher" and that's just what it did, briefly touching its 200 day MA before closing just below at 1.3063.  The overnight is forming a small spinning top but with a big bullish engulfing candle in place and indicators still just beginning to rise off oversold,   I think the euro will be continuing higher from here.  That syncs with my call for a lower dollar.

Transportation: What a difference a day makes.  Last night's bearish indications here were all canceled today by a nice 1.1% gain that just brought the trans back into their latest rising RTC, restoring the uptrend.  And with indicators still rising but not yet overbought, it's now looking like we've got some more room to run.

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

 25  6/17       32         40        +      -   1627 

 26  6/24       13         46        -      -   1592

 27  7/1        25         42        -      -   1606

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 both I and the poll I voted bearish four weeks ago, so we were both right.   Therefore we  continue the year with an accuracy of 13  for 23, or 57%.   The poll as a whole drops to 10  for 20 or 52%.

Interestingly, while bullish sentiment doubled in the past week bearish sentiment dropped only three points.   That may be another consequence of the recent market volatility.

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       0      0      0           1        0.000      0

     And the winner is...

Holiday weeks are always difficult to call and that goes double when the day in question doesn't fall on a Monday or Friday.  Tuesday is historically pretty weak, but with all of the charts looking bullish again and Dr. Copper staging a comeback from its lowest levels since 2009 I think the logical call here is for Tuesday higher.  And that's my final answer.

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 stand aside in anticipation of a tricky low volume day..