Tuesday, October 22, 2013

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower,  low confidence.
  • ES pivot 1738.50.  Holding below is bearish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Yawn - well both the SPX and the Naz finished Monday higher but the Dow did not, so that counts as a miss - by a whopping seven points.  Oh well.  Not much happened on Monday - but sometimes nothing can mean something.  Is this one of those days?  Read on...

The technicals (daily)

The Dow: Ranges have been compressing for four days now and Monday handed us a nice little red hanging man to go with indicators turning south off overbought.  This chart is now feeling toppy.

The VIXLast night I wrote "the VIX is gearing up for a move higher in the next day or two" and hey presto, it rose 0.92% on Monday confirming Friday's spinning top reversal candle.  With VVIX rising and a bullish stochastic crossover in the offing, I'd say there's more upside to go yet.

Market index futures: Tonight all three futures are modestly lower at 12:23 AM EDT with ES down by 0.07%.  ES put in a little doji right on its upper BB on Monday and although we remain in a rising RTC, with the indicators having peaked two days ago at overbought, this all suggests a short term top is in.  I'd look for lower here on Tuesday.

ES daily pivot: Tonight the pivot inches up from 1734.58  to 1738.50.  That move coupled with ES going nowhere in the overnight puts us below the new pivot for the first time in a few days so this indicator now turns bearish.

Dollar index: The dollar remains in the toilet, unable after three days to even start filling last week's huge gap down.  Indicators now all oversold but Monday's little spinning top really has little to offer.  I'd look for more sideways action for a few days here..

Euro: Meanwhile, the euro hit a wall around 1.3683 on Monday and put in a hanging man that's being nicely confirmed in the overnight, already down 0.09%.  With overbought indicators, this one looks to have topped and I'm thinking the euro's going lower.

Transportation: Probably the most bullish chart of the day, the trans gained another 0.40% on Monday to remain well inside a rising RTC and hug the upper BB in record territory.  Indicators remain broken but with no reversal candles in sight we can't call this one lower yet.

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    4      3      6           1        0.625    527

     And the winner is...

Tonight I'm seeing some definite signs of topping that were not there last night.  We've had quite a run for the past three days so some retrenchment may now be in order.  It's unclear what impact Tuesday's jobs report is going to have but technically, logic dictates a call of Tuesday 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.

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