Friday higher only if ES pivot passed

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

• Friday higher only if ES breaks above pivot, else lower.
  
• ES pivot 1746.75.  Holding below is bearish..
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last night we had something of a mixed picture but I decided to go with the preponderance of bullish evidence  and goo d thing too as the Dow gained 96 points on Thursday.  This was an interesting development so let's see how Friday may play out.

The technicals (daily)

The Dow: Well that was a close one.  Last night the Dow stood on the verge of a bearish RTC exit but Thursday's gains popped us right back into the channel.  We now have no further resistance until the upper BB at 15,614 and that is now definitely withing striking distance.  There are no bearish signs on this chart right now.

The VIX:  Last night the VIX looked like it might be ready to move higher but VVIX said no so I did not make the call.  And good thing too since the VIX continued lower on Thursday by another 1.64%.  That leaves it teetering on the edge of the rising RTC foe a bearish setup.  However with indicators still oversold, we now have a mixed picture and that's too hard for me, so I'm just taking a pass on this chart tonight.  Could go either way on Friday.

Market index futures: Tonight all three futures are lower at 12:37 AM EDT with ES down by 0.20%.  With an inside harami on Thursday and a dip in the new overnight, the symmetrical triangle I mentioned last night continues to play out as we alternate between daily gains and losses.  RTC-wise, tonight's action is a bearish trigger as the indicators continue to slowly fall off overbought.  Right now this chart seems to have more downside risk than upside potential as resistance stiffens around 1750.

ES daily pivot: Tonight the pivot rises from 1741.92  to 1746.75.   The sudden plunge in ES around 11:30 PM has now dropped it straight through the new pivot, so this indicator turns bearish.

Dollar index: Nothing much new here - the dollar remains stuck in a rut.as it continues dribbling down its lower BB.  Still no sign of a turn-around on this chart.

Euro: And correspondingly, the euro continues on a tear, closing at 1.3820 on Thursday.  Next resistance isn't til 1.4052 and it's showing no signs of slowing down.

Transportation: Last night I wrote "there's no bearish signs here tonight" and indeed there weren't ad the trans gained another 0.88% on Thursday.  That keeps us in a railroad -straight track up the rising RTC into the stratosphere.  Everything I said last night remains true tonight - still no bearish signs.

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   16/32  13/29

 33  8/12       32         41        -      -   1691   17/33  14/30

 34  8/19       23         54        -      -   1656   17/34  14/31

 35  8/26       23         50        -      -   1664   17/35  14/32

 36  9/3        21         54        -      -   1633   17/36  14/33

 37  9/9        35         30        +      +   1655   18/37  15/34

 38  9/16       40         28        +      +   1688   19/38  16/35

 39 9/23        52         36        +      +   1710   20/39  17/36

 40 9/30        39         43        +      -   1692

 41 10/7        30         33        +      -   1691 

 42 10/14       48         22        +      +   1703

 43 10/21       57         30        +      +   1745

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 we were again both right.  Therefore we continue the year with an accuracy of 20 for 39, or 51%.   The poll as a whole rises to 17 for 36 or 47% - it continues to be a tough year for the poll so far.

The next two weeks should be interesting, as we once again have a divergence coming up between the way I voted and the way the majority voted.


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  8      3      3           3        0.800    485
October    6      4      6           1        0.636    602

     And the winner is...

Hmm - tonight is proving to be trickier than I first imagined.  On the one hand we have some bearish signs in the futures, but continued bullishness in the Dow combined with a lack of guidance from the VIX.  The conservative route would be to simply call Friday uncertain, but the fact that ES is hovering just below its new pivot suggests that a conditional call is the way to go.  So let's just say that if ES can break back above 1746.75 by mid-morning Friday, we'll close higher and if not, then lower.  This doesn't always work, but it works often enough to be worth a shot.  That's all, she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17  total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we stand aside.again.