Thursday, October 10, 2013

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1649.00 .  Holding above is bullish.
  • Friday bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader remains long at 1695.00.

Hmm - today was one of those occasions where ES failed to break decisively above the pivot but the market closer higher anyway (though the gains were pretty puny), so that one's a miss for me.  We now move on to Thursday as the Washington DC National Fiddlers Society fiddles on, unable to even decide which key they're playing in.

The technicals (daily)

The Dow: Last night I mentioned that the Dow was "within shooting range of its 200 day MA at 14,720" and that it was "the make-or-break line"  Today's low?  14,719.  Bingo.  By the end of the day we had formed a nice classic spinning top reversal candle and the 200 MA dam held back the tide of bears.  The fact that we had a support line right here helped too  So now there's at least some sign of a reversal, though remaining in a descending RTC as we are, we'll need some confirmation before calling Thursday higher.  But I'd at least not be going short at this point.

The VIXHa - what goes up has to come down - sooner or later.  And the VIX finally did come down 3.64% on Wednesday forming a bearish harami in the process.  The indicators remain pretty overbought and we're still just barely below the upper BB so I'd say there's more downside risk than upside potential from here.

Market index futures: Tonight all three futures are higher at 12:46 AM EDT with ES up by a significant 0.42%.  ES gave us a decent reversal sign in the form of a doji on Wednesday sitting right on its lower BB.  And the indicators have now finally entered oversold territory, and the stochastic just formed a bullish crossover.  So with the move higher overnight confirming the doji, it looks like the tide may be turning here.

ES daily pivot: Tonight the pivot drops from 1656.00  to 1649.00 . That dip combined with ES's overnight advance now puts us above the new pivot by a on-trivial six points.  That means this indicator has now turned bullish.

Dollar index: Last night I wrote "we could see a move higher here on Wednesday" and boy did we ever with a 0.42% pop.  But the gap-up evening star doji is at least a suggestion now that we go back down on Thursday but one that requires confirmation.  Still, that gap is pretty big and will be wanting filling at some point.

Euro: On the other hand, the euro fell out of its recent congestion band with a big drop on Wednesday confirming the bearish RTC exit we just saw, and there's plenty of continuing negative pin action in the overnight, down another 0.20%.  With indicators now traveling down off oversold, this one looks bearish for Thursday.  That leaves us in conflict with my call for the dollar, but I have more confidence in this one.

Transportation: The trans gave us a nice doji star on Wednesday hugging the lower BB that with oversold indicators suggests a bottom may be close at hand.  The sort of candle still requires confirmation, but I'd definitely not be putting on any shorts from here.

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    1      1      3           1        0.667    136

     And the winner is...

Tonight I'm seeing enough technical reversal signs that taken as a whole they make a compelling argument to call Thursday higher, gummint shutdown or no.

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 at 1695.00.

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