Friday, October 4, 2013

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1672.58.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader remains long at 1695.00.

Well not much new on Thursday - just more confusion out of Washington and no substance.  I'm not sure how much it's worth to even look at the charts tonight because the markets are now totally headline-driven, the way they were back during the Greek crisis (anyone remember the Greeks?)  Still, I suppose it can't hurt, and it keeps me off the streets, so let's go.

The technicals (daily)

The Dow: The Dow remains in a Washington-fueled downtrend now back to September 19th.  So nothing to see here.  Moving on ...

The VIXThe VIX has now touched its upper BB for four straight days - that's pretty rare and makes me think it's due to come back any day now.  It did put in an inverted hammer reversal candle.  The action in VVIX was even more dramatic with an inverted hammer with a great big tall tail spiking way above its upper BB.  Technically, this is primed to move lower.  But all it will take to drive it higher again is one word from the Empty Suit about how he's prepared to "listen" but will not compromise.  Hey pal, if you're not compromising, what exactly is it you're listening to?  Old Bee Gees tunes?

Market index futures: Tonight all three futures are lower once again at 1:19 AM EDT with ES down by 0.10%.  ES took a big dump on Thursday and actually closed below its 40 day MA.  The continued negative follow-through in the overnight is forming a bearish stochastic crossover and there's no support until the lower BB at 1659 and  then 1656.  I think we may very well see one or both of those numbers on Friday.

ES daily pivot: Tonight the pivot drops again from 1682.67  to 1672.58.   We remain below the new pivot and widening the gap as I write, so this one continues looking negative.

Dollar index: Like the Dow, the dollar is locked in a descending RTC and with its lower BB falling away, this chart simply continues to look bearish..

Euro: Similarly, the euro continues to look higher, though it is approaching some resistance at 1.3671 and then its upper BB at 1.3690, so that may eventually put an end to this rally in a few days.

Transportation: The trans' abortive rally earlier this week collapsed on Thursday driving them right back into the descending RTC and moving the stochastic into position for a bearish crossover.  Nothing positive on this 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    11      3      6           2        0.813    687
September  8      3      3           3        0.800 

October    0      0      2           1        1.000      0

     And the winner is...

All in all, the charts are looking pretty grim tonight.  Technically, they continue to look bearish.  But all it will take is an announcement from Washington that some sort of deal has been reached to set off a big relief rally.  With that sort of headline risk, there's no way I can commit to a call lower even though it sure looks like that's where we're headed.  Accordingly, I'm simply going to call Friday uncertain.  Se you again Sunday night.

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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