Thursday, October 31, 2013

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain.
  • ES pivot 1761.83.  Holding below is bearish.
  • Friday bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Interesting - the Fed spoke on Wednesday, essentially saying nothing new, bu Mr. Market didn't like it anyway, with the Dow finishing the day down 62.  At least with that uncertainty resolved, we can get back to the technicals for Thursday.

The technicals (daily)

The Dow: Despite a late afternoon recovery of sorts, the Dow ended Wednesday with what is basically a dark cloud cover and a bearish stochastic crossover as resistance at the September records proved too much.  That also puts the double bottom thesis in doubt.  So right now, the general tenor of this chart has turned bearish.

The VIXThe VIX remains stuck in a narrow range centered about 14 for nine days now.  It put in an unusual gravestone doji on Wednesday in which an attempt to rally was stymied by the 200 day MA.  That took the indicators overbought and moved the stochastic into position for a bearish crossover so I'd say this one's going lower.

Market index futures: Tonight all three futures are lower at 112:41 AM EDT with ES down by 0.36%.  Wednesday's candle was mostly dark cloud cover and it took us right to the edge of the rising RTC.  The overnight is now trading outside for a bearish setup.  With indicators continuing to move lower off extreme overbought, this chart now looks officially bearish.

ES daily pivot: Tonight the pivot dips from 1763.58  to 1761.83.  We were below from the Fed announcement on and remain below the new pivot so this indicator is now clearly bearish.

Dollar index: On Tuesday the dollar posted a gain that was a bullish RTC trigger and on Wednesday we got the payoff in the form of a 0.21% gain that just took the indicators off oversold and started a new rising RTC..  So more upside looks likely.

Euro: The euro's recent uptrend is now officially over as the currency closed down for the third day running on Wednesday.  And the overnight is running even lower, off another 0.13%.  Indicators still have room to run to oversold so this chart looks continued bearish, which squares with my bullish dollar call (I look at these two charts completely independently).

Transportation: The trans is also stuck behind resistance like the Dow, here at 7055, giving up 0.61% on Wednesday.  That was enough to drop it out of its rising RTC for a bearish setup and start moving the indicators off overbought.  So this chart too is now looking bearish.

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      5      8           2        0.615    601

     And the winner is...

We're had quite a run these past three weeks and the market has been overdue for a pullback of some sort.  With all the technicals looking bearish tonight, it looks like we may be starting that process, so the logical call is for Thursday lower.

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.

No comments:

Post a Comment

Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.