Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1720.92.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last night I wrote that "Thursday could be a doji day" and darned if that isn't exactly what we got with the Dow putting in a classical dragonfly doji.  What does this mean for Friday (particularly since the SPX candle was fairly dissimilar)?  Read on...

The technicals (daily)

The Dow: The Dow ended Thursday down just two points after spending the whole day battling back from a big dump out the gate, largely attributable to IBM.  So we're going to take this doji with a grain of salt.  I think the steady upward trend during the day is more important here.  We are now officially overbought  but the upper BB is still 184 points away.  One more thing though - we did trade outside the rising RTC on Thursday for a bearish setup, so overall this chart is indecisive.

The VIX:  Last night I wrote "the VIX could face more downside on Thursday" and that's what happened as the VIX lost another 8.36% to break uder its 200 day MA.  The failure of the MA to act as support is bearish per se so while we're now officially oversold, the lower BB isn't until 12 and I don't think the VIX is done falling.

Market index futures: Tonight all three futures are higher at 1:22 AM EDT with ES up by a healthy 0.23%.  ES hit a record close on Thursday after breaking through resistance at 1720 and its upper BB at 1724.  But we remain in a clear rising RTC and we're getting decent pin action in the overnight so this chart remains bullish.

ES daily pivot: Tonight the pivot rises again from 1707.17  to 1720.92.  This continues to leave ES safely above the new pivot and so this measure continues bullish.

Dollar index: Last night I wrote "there's a hint of a move lower" Thursday and it looks like the dollar took the hint.as it gapped down a huge 1.05% breaking support at 54.50 and  stopped only by its lower BB at 54.47.  I'd expect some gap-filling or at least a DCB after such a big move.  But the indicators as still just coming off overbought, so there's a chance we might still see a bit more downside on Friday before the dollar can get its act together.

Euro: And the euro put in a corresponding big pop on Thursday to bust right out of its descending RTC for a bullish setup, and then on through its upper BB to close at 1.3679.  This is also a resistance line and we're now overbought so I'd expect the euro to take a break on Friday.  The overnight seems to be supporting that for the moment, down 0.09% right now.

Transportation: The trans posted a small gain on Thursday with a hanging man complementing the Dow's doji.  RSI is now quite overbought at 97, we're real close to the upper BB and we traded outside the rising RTC for a bearish setup.  So all things considered I'd say the trans are gearing up to move lower soon.

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  

 40 9/30        39         43        +      -   1692

 41 10/7        30         33        +      -   1691 

 42 10/14       48         22        +      +   1703

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 19  for 38, or 50%.   The poll as a whole rises to 16 for 35 or 46% - it continues to be a tough year for the poll so far.
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    3      2      6           1        0.800    506

     And the winner is...

I hate to go against history, and history says that this Friday is awful.  I also don't like calling op-ex days but all of the technicals continue to look pretty bullish tonight so I'm just going to go out on a limb and call Friday higher.  See you 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.