Monday, September 30, 2013

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, medium confidence..
  • ES pivot 1687.33.  Holding below is bearish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader remains long at 1695.00.

The market was pretty conflicted last week, being jerked about as it was by every pronouncement, rumor, and news flash out of Washington about [cue spooky music] impending doom!  Sort of like - no, exactly like - all the big hoopla over the "fiscal cliff" and the sequester last December?  Remember that?  OMG, the sky is falling, the end is near, it's the stockopolypse!  And what happened?  At the very last second, our esteemed Congressdroids miraculously managed to kick the can down the road one more time and the next day the markets rallied hard.  I'm now taking bets from anyone who thinks this bizarre political Kabuki theatre is going to be any different this time.

The technicals (daily)

The Dow: So the Dow was down Friday, ending exactly where it ended two days earlier.  But the candle traded outside the descending RTC for a bullish trigger and drove the indicators to quite oversold levels.  I'm sorry but this still looks more bullish than bearish to me.

The VIXAfter bumping up against its 200 day MA all last week, the VIX finally broke through on Friday with a big 10% gap up and drove the indicators straight to overbought.  But this could go either way on Monday.  This move was largely Washington-driven anyway.

Market index futures: Tonight all three futures are substantially lower at 1:05 AM EDT with ES down by 0.67%.  The Chicken Little crowd is obviously out in full force this Sunday night, with a giant gap down star.  This is 2/3 of a bullish morning star and with indicators now well into oversold, that gap is going to be wanting filling.  Maybe not Monday, but soon.

ES daily pivot: Tonight the pivot steps down from 1691.92  to 1687.33..  We remain well below the new pivot, so this indicators remains bearish.

Dollar index: The dollar gapped down on Friday, unable to capitalize on its recent descending RTC exit.  But support at 54.86 held and the candle was a spinning top so it's not at all clear that this signals more downside on Monday..

Euro: The euro on the other hand just continues to consolidate in the 1.3476-1.3527 area.  If you squint, you can sort of see a symmetrical triangle thing going on here so the next move just might be higher from these levels.

Transportation: The trans are looking pretty bearish at this point, now on a six day downtrend.  But Friday gave us a hammer in oversold territory, though with so much downside momentum going, a turnaround may take a few days from these levels.

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    11      3      6           2        0.813    687
September  7      3      3           3        0.769 

     And the winner is...

The last day of September is historically quite bearish anyway, and this year there will be all sorts of wailing and moaning from our sogenante leaders predicting the end of the universe.  So with the fiscal cliff, uh I mean government shutdown having one last day to go, look for a close of Monday lower.  Then when the can gets kicked at 11:59:59 PM Monday night, we'll go higher on Tuesday.  Pass the popcorn.

ES Fantasy Trader

Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16  total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we remain long at 1695.00.

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