Friday, November 22, 2013

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1788.33.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Well I guess the fourth time's the charm.  After attacking the 16,000 level for four straight days, the Dow finally managed to close above it, just barely.  I was somewhat surprised given that Wednesday's big drop looked like an admission of defeat but hey, it is what it is.  Needless to say, this changes the picture so let's see what the charts have to say about this for Friday.

The technicals (daily)

The Dow: After teetering on the brink of a bearish RTC exit on Wednesday, the Dow popped right back in on Thursday.  But our record close hasn't yet truly broken through the resistance around the 16K level so Friday will be make-or-break day.  Right now, the action of this week so far is trendless so I have no comment on this chart.  It's too tough for me.

The VIXAnd here is perhaps the key to the whole puzzle.  Last night I wrote "I'm thinking the VIX may actually be moving lower from here."   That was perhaps the one good thought I had all day as the VIX dropped 5.52% on Thursday.  Never discount the predictive power of the VIX.  So tonight, with Wednesday's spinning top confirmed, we've got a stochastic just about to make a bearish crossover.  And with no support til 12.41, I say this chart is going lower again on Friday.

Market index futures: Tonight the futures are mixed at 1: AM EST with ES down by 0.07%, YM down 0.03% but NQ up 0.02%.  Thursday's big jump in ES took it out of its descending RTC for a bullish setup.  We also now have a just completed bullish stochastic crossover.  But resistance around 1794 remains strong, so I'm not getting a good read on this chart tonight.

ES daily pivot: Tonight the pivot rises from 1782.83  to 1788.33. We remain above the new pivot, so this indicator is now bullish.

Dollar index: Like the Dow, the dollar took a most unexpected turn on Thursday, jumping right out of its descending RTC for a bullish setup.  It also completed a bullish stochastic crossover and the indicators came off oversold.  The overnight is continuing those gains, so I'd say the dollar is now looking bullish for Friday..

Euro: On the other hand, the euro already had its big tumble on Wednesday and instead gained a bit with a green spinning top on Thursday.  The overnight continues to trade higher but with mixed indicators and a trend end, this chart is too tough for me to call.

Transportation: Wow - what a difference a day makes.  The trans which were looking pretty grim last night came roaring back on Thursday to rocket out of their new descending RTC and stop the indicators dead in their tracks form their march towards oversold.  So this chart now looks bullish again - go figure.

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    7      5      8           2        0.643    674

November   6      6      1           1        0.538    123

     And the winner is...

It's not often we get a picture this murky from the charts but I'm afraid I'm just not seeing it tonight.  I also have a nasty cold which isn't helping  And I'm still somewhat stung from getting Thursday badly wrong so I'm just going to regroup and call Friday uncertain.  See you again Sunday night!

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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