Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1682.33 .  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1643.00.

Recap

My conditional call for Monday worked again as ES briefly dipped below its pivot at 4 AM and 5 AM before making a final attack at 10:15 that finally succeeded at 11:05 - and then we closed lower, QED.  So that's that.  But in this game you're only as good as your last call, so let's make another one.  So it's back to the charts we trudge once again for Tuesday's direction.

The technicals (daily)

The Dow: On Monday the Dow dropped 37 points but that still only qualified as more sideways action.  FWIW, we're now well out of the rising RTC and still oversold, so this chart is looking more bearish than it has in six days.

The VIX:  And what of the all-important VIX?  Well on a down day for the market it rose as expected, up a decent 5.27%.  But it did so on an inverted hammer that closed outside the rising RTC for a bearish setup.  Therefore, despite indicators only recently off oversold I have to think the3 VIX might well be headed back down on Tuesday.  VVIX supports this idea, with the mother of all dark cloud covers on Monday.

Market index futures: Tonight all three futures are higher at 1:22 AM EDT with ES up by 0.13%.  Nothing much new on this chart.  ES continues to make intraday stabs lower and they continue to be rejected.  Meanwhile this is driving the indicators closer to oversold and Monday's candle exited the descending RTC for a bullish setup.  So overall, this chart is now looking more bullish than last night.

ES daily pivot: Tonight the pivot inches up from 1682.00  to 1682.33.  After breaking above at the close on Monday we remain above the new pivot so that is bullish.

Dollar index: The dollar put in a small red candle on Monday but because it opened higher, the net result was zip - 0.00% change.  Hovering below the 200 day MA as we are but with oversold indicators, this chart remains too tough to call.  Maybe the euro can provide us with greater clarity....

Euro: On Monday the euro fell out of its rising RTC for a bearish setup and the overnight continues a bit lower though it's been rallying since 11:30 PM.  Still with resistance at the pivot and indicators remaining overbought, this chart may well move lower on Tuesday.

Transportation: Lest anyone accuse me of only tooting my own horn, I will mention that last night I wrote "I'd be looking for further advances on Monday".   Bzzzt!  The trans dropped a big 1.10% on an ugly red marubozu that dropped us right back into the descending RTC.  So much for oversold indicators.  With a candle like this, the trend remains lower.

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

 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   14/26  11/23

 27  7/1        25         42        -      -   1606   14/27  11/24

 28  7/8        42         29        +      +   1632

 29  7/15       48         22        +      +   1680

 30  7/22       42         19        +      +   1692 

 31  7/29       39         17        +      +   1692 

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 majority of the poll voted bearish four weeks ago, so we were all wrong.  Therefore we  continue the year with an accuracy of 14  for 27, or 52%.   The poll as a whole drops to 11 for 24 or 46%.  We are now, embarrassingly enough, beyond coin-flipping territory as far as accuracy goes.

This week we see that little has changed.  Both bullish and bearish sentiment dropped a few points as the head-scratchers decamped for the sidelines.  Personally, I'm sticking with the bulls as I still see nothing on either the weekly or monthly charts suggesting that a trend change might be at hand.  It makes me nervous to say that after such a long rally but it is what it is.


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      10      2      2           4        0.875    486

     And the winner is...

Another mixed picture.  We have the futures guiding higher and the VIX seeming to stall out, but the Dow and the trans are looking lower and we have little guidance from the currencies.  And with some more Fed pronouncements coming soon, this one is just too tricky to call tonight so well have to settle for a Tuesday uncertain.

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 at the stage of not even wanting to look at this trade anymore.