Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1763.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Wow - I'll admit I was a bit surprised at the strength Mr. Market displayed on Tuesday, pushing to new record highs as it did.  Now with Wednesday being a Fed day, we'll cut right to the chase since as a matter of policy I always call such days as uncertain.  There's just no way to tell when we're going to get a surprise that doesn't match expectations.  So we'll pretty much skip the charts tonight since there's not much point.

The technicals (daily)

The Dow: I will at least mention though that the Dow now has a bullish double bottom pattern in and is right on the cusp of breaking out the right-hand leg of the "W".  If you compare the indicators now to where we were the last time we hit these levels, we're actually in better shape now.  Last time, we'd been climbing the upper BB for six days.  This time we've yet to reach it.  Last time RSI was 96, this time it's 84.  So there's clearly more gas left in the tank for a possible breakout.


ES daily pivot: Tonight the pivot rises from 1757.58  to 1763.58.  We remain reasonably above the new pivot, so this indicator is bullish.


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   20/39  17/36

 40 9/30        39         43        +      -   1692   21/40  17/37

 41 10/7        30         33        +      -   1691 

 42 10/14       48         22        +      +   1703

 43 10/21       57         30        +      +   1745

 44 10/28       59         19        +      +   1760  

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 I voted bullish four weeks ago, however the majority of the poll was bearish so I was right and they were wrong.  Therefore we continue the year with an accuracy of 21 for 40, or 53%.   The poll as a whole drops to 17 for 37 or 46% - it continues to be a tough year for the poll so far.

This week we find more people jumping on the bandwagon as the bullish number rises to 49%, its highest reading YTD and in fact its highest reading in over a year.  And bearish sentiment has dropped to its lowest level since the start of the year.  The last time we had such a big spread was back in September of 2012 - just before the SPX went on a six week losing streak that lasted into the middle of November.  Whenever I see readings get this extended I start thinking we're due for a trend change.  Of course this year we've got seasonality more in our favor but still - this is something to keep in mind.

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      7           2        0.615    601

     And the winner is...

Although the official call is for Wednesday uncertain, technically, the charts continue to look bullish.  Unless the Fed throws some serious cold water on this party, I wouldn't be surprised to see even more records set this week.  And it kind of pains me to say that, since I'm a believer in mean-reversion.

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.