Thursday, November 14, 2013

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1764.42.  Holding above is bullish..
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Well op-ex week rolls on in crazy fashion true to form.  I was expecting a down day Wednesday but what we got instead was a solid 71 point bump in the Dow - go figure.  But that was then and this is now.  Let's see if we can get it right on Thursday.

The technicals (daily)

The Dow: The Dow completely non-confirmed Tuesday's spinning top and broke through resistance at 15,778 on Wednesday.  But this 0.45% advance still hasn't moved the indicators to overbought, or hit the upper BB, or given us a bearish stochastic crossover.  So my expectations for lower were wrong-o and now this chart looks bullish again.  Go figure.

The VIXThe VIX dropped right back to its latest support line at 12.5 on Wednesday and just touched its lower BB.  But with indicators still not yet oversold and a spinning top in VVIX, it's not out of the question that the VIX could run lower at least one more day.  But beware - the VIX generally does a good job of turning once it's hit its lower BB.

Market index futures: Tonight all three futures are lower at 1: AM EST with ES down by %.   We got a strong green candle out of ES on Wednesday that touched its upper BB.  But we're getting some surprisingly resilient pin action in the overnight.  With indicators not yet overbought and another record close on the books, it looks like the sky's the limit.  I see nothing bearish on this chart tonight.

ES daily pivot: Tonight the pivot rises from 1764.42  to 1771.75.  Even with that gain, ES is still comfortably above the new pivot so this indicator now turns bullish.

Dollar index: After two days of noodling around it looks like the dollar has finally decided on a direction, and the direction is down.  Indicators are now on the march off overbought and Wednesday's red candle suggests more downside to come..

Euro: On Wednesday the euro delivered the payoff for Tuesday's bullish RTC trigger, closing at 1.3463.  The overnight gapped up and then gave a bit back though we're still a bit higher at the moment.  But with the indicators still rising and no resistance til 1.3515 it looks like this chart has more room to run higher, and that squares with my call for a lower dollar.

Transportation: Ah - never dismiss bullish divergences in the trans.  We certainly got the warning on Tuesday with a nice gain here, and bada-bing, up we went on Wednesday.  The trans now have a nice four day winning streak going and have cleared resistance at 7127 with another record close.  And we're still not even overbought yet, and the upper BB is still way up at 7194, so there's clearly still more room to run 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    7      5      8           2        0.643    674

November   3      4      1           0        0.429     40

     And the winner is...

Last night I ignored a strong showing in the trans and paid the price on Wednesday.  And what a difference a day makes - all the charts are now suddenly looking bullish so I'll just have to call Thursday higher.

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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