Wednesday, November 6, 2013

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher, low confidence..
  • ES pivot 1757.00.  Holding above is bullish..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Gosh, it feels more like the Dog Days of August all over again rather than the start of November, with another small movement day.  Let's do the charts again to see when we might get some action here.

The technicals (daily)

The Dow: The Dow took a big dump out the gate Tuesday morning but battled back to finish with a tall hammer-type candle, though without a trend, it's not particularly meaningful.  The indicators are in no-man's land, the stochastic is threaded out, and there's a general lack of direction here that's just leaving me scratching my head.

The VIXThe VIX gave us a doji on Tuesday too.  And with RSi moving higher but the stochastic headed lower, this chart is no more informative than the Dow.  Consider that the VIX has touched 13.28 for 12 of the last 14 sessions and you can see the rut we're in.

Market index futures: Tonight all three futures are higher at 12:31 AM EST with ES up by a healthy 0.47%.  We remain in a weak uptrend but the overnight action is definitely encouraging and has already given us a bullish stochastic crossover.  This is probably the clearest chart of the lot tonight and it's now looking vaguely bullish.

ES daily pivot: Tonight the pivot drops from 1760.08  to 1757.00.  We broke above the old pivot earlier this evening and are now even higher above the new one, so this indicator now looks positive.

Dollar index: The dollar remains quite overbought and just completed a bearish stochastic crossover on Tuesday, so I'd say it's headed lower..

Euro: Meanwhile the euro is still finding support at 1.3473, remains quite oversold, and has just formed a bullish stochastic crossover, so it looks good to move higher from here.

Transportation: And we end with more ambiguity as the trans gave us a harami hanging man on Tuesday with RSI headed lower but the stochastic completing a bullish crossover.  No clue...

Accuracy (daily calls): 

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   1      2      0           0        0.5333     3

     And the winner is...

It's not often you see so many ambiguous charts all at once but this is one of those nights.  Interestingly, we're seeing some unusual buying activity in ES this evening with 5,560 contracts going through in the 10:35 PM 5 minute bar and another sudden burst of over 9,300 in one minute at 11:30 PM.  Normal volume at this time of night is usually no more than a few hundred contracts and often only a few dozen per 5-minute bar.

I don't know what's going on here but someone must know something so in the absence of otherwise outright bearish signs, I'm going to go with that and call Wednesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $100,000 as we wait for the right moment to enter our first trade of the year.  While I do think we're going lower on Friday, I still don't have a good enough edge to warrant going short just yet, so we'll just stand aside again.  There's no rush.

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