Tuesday lower

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

• Tuesday lower, low confidence.
  
• ES pivot 1658.33..  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well we had a decent rally going on Monday as I had expected.  What I didn't expect was John Kerry opening his mouth to announce that the Syrian government is bad, very bad.  Why the fact that two groups of people (both of which hate the US) are busy killing each other, should drive the Dow down 64 points is beyond me but then that's Mr. Market for you.  In any case, good luck getting The Empty Suit to do anything productive about this admittedly intractable problem.  So let's move on to something far easier, namely figuring out which way the market's going on Tuesday.

The technicals (daily)

The Dow: Monday was one of those days where headline risk trumped the technicals.  In any case, the resulting candle doesn't look too good taking as it did the wind out of the sails of a developing rally.  The pattern now looks like a cross between a one black crow and a bearish ladder.  Either way, this chart isn't looking too healthy.

The VIX:  On Monday the VIX broke right back up through its 200 day MA, just one day after falling below it to gain 7.22%.  Friday's RTC bearish RTC exit didn't work this time (thanks, John).  With VVIX up on Monday too, we could see a higher VIX again Tuesday.

Market index futures: Tonight all three futures are lower at 1:24 AM EDT with ES down by 0.24%.  Monday ended up with a bearish one black crow and the pin action in the overnight continues lower, leaving this chart suddenly bearish.

ES daily pivot: Tonight the pivot barely moves from 1658.25  to 1658.33.  After breaking below on Monday afternoon, we remain below the new pivot and if anything are sinking lower so this data point is clearly bearish now.

Dollar index: After a small doji on Monday the dollar seems bent on continuing its random ways.  Once again, I have no clue where this one is going.  A trend would be nice to see here..

Euro: At least my euro guess was right as it did decline a bit on Monday with a red spinning top.  We're also forming something of a symmetrical triangle here, and since it seems to be near resolution, I'd be expecting a move higher here as early as Tuesday.

Transportation: After a dragonfly doji on Friday, we got the mirror image on Monday - a gravestone doji, and with the indicators now getting pretty overbought, this one is looking more serious.  Though we remain in a rising RTC, a move lower looks likely on Tuesday

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   15/28  12/25

 29  7/15       48         22        +      +   1680   16/29  13/26

 30  7/22       42         19        +      +   1692   16/30  13/27

 31  7/29       39         17        +      +   1692   16/31  13/28

 32  8/5        46         27        +      +   1710 

 33  8/12       32         41        -      -   1691

 34  8/19       23         54        -      -   1656

 35  8/26       23         50        -      -   1664 

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 bullish four weeks ago, so once again we were both wrong.  Therefore we continue the year with an accuracy of 16  for 31, or 52%.   The poll as a whole drops to 13 for 28 or 46%.

This week we find that not much has changed since last week.  Bullish sentiment remains unchanged and bearish sentiment dropped just four points.  Once again I remained in the bear camp this week based on some negative looking weekly and monthly candles on the SPX chart.


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      4           4        0.875    486
August    10      2      5           1        0.845    548


     And the winner is...

Last night I called Monday higher partly on the absence of any bearish signs.  Well tonight I'm seeing those signs, so the logical call now becomes Tuesday lower.  Unless the Syrians suddenly decide to kiss and make up.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside - while I again think we're going higher from here, I'm not sure how long this will last.