Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1776.92.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

The technicals worked out nicely on Thursday as the Dow slid another 104 points to extend its losing streak to three.  Will Friday make four?  We now pray, as we do every night, to the Chart Gods for inspiration.

The technicals (daily)

The Dow: With Thursday's drop, the Dow now has a new descending RTC going and three black crows to boot, roosting just below the lower BB.  But the indicators are still not yet oversold and there's no sign of a reversal here.

The VIX:  Last night I wrote " I think any move higher is limited.".   And the VIX was indeed up just 0.78% on Thursday with a candle that was part spinning top, part inverted hammer.  But any way you slice it, with two days now on its upper BB and indicators just short of overbought, the VIX is now looking toppy.


Market index futures: Tonight all three futures are higher at 12:15 AM EST with ES up by a non-trivial 0.20%.  Last night of ES I wrote "further downside is now limited" and we did in fact see the selling abate on Thursday with a stubby spinning top that pushed indicators close to oversold.  The overnight candle is developing as a bullish piercing line after bouncing off the lower BB.  So I'd say at this point this chart is looking bullish again.

ES daily pivot: Tonight the pivot drops once again from 1789.33  to 1776.92.  That dump coupled with a rising ES in the overnight finally puts us back above the new pivot so this indicator has now turned bullish again.

Dollar index: Interesting development with the dollar on Thursday as it busted out of an eight day descending RTC with a 0.27pop for a bullish setup.  A bullish stochastic crossover is now complete and indicators are still oversold but appear to have bottomed so this chart looks ready for higher on Friday..

Euro: Last night I wrote "I'd say a move lower is coming very soon."  Well was Thursday soon enough?  The euro posted its biggest loss in two weeks and just exited its rising RTC for a bearish setup.  Indicators remain highly overbought and a bearish stochastic crossover is now complete so I'd say this one's locking lower for Friday.

Transportation: I was a bit too pessimistic on the trans last night as they put in a nice little spinning top on Thursday with indicators now clearly oversold and the lower BB providing support.  So right now this chart is looking ready to move higher.

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   22/41  17/38

 42 10/14       48         22        +      +   1703   23/42  18/39

 43 10/21       57         30        +      +   1745   24/43  19/40

 44 10/28       59         19        +      +   1760   25/44  20/41

 45 11/4        42         25        +      +   1762   26/45  21/42

 46 11/11       39         39        +      x   1771   27/46  21/42

 47 11/18       52         30        +      +   1798 

 48 11/25       58         29        +      +   1805

 49 12/2        56         26        +      +   1806

 50 12/9        55         30        +      +   1805

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, and so that was correct.  However, the poll as a whole was in a dead-tie, so that makes it a push.  Therefore the Night Owl continues the year with an accuracy of 27 for 46, or 59%.   The poll as a whole  remains at 21 for 42 or 50% - it continues to be a tough year for the poll so far.  And time's up for 2013 calls.  Right now the calls are all for 2014.

This week both I and the poll as a whole once again voted bullish with bullish sentiment barely budging and bearish up a few points.  That's how it looked to me at the end of last week, though I must say I'm seriously considering switching my vote to bearish for next week's poll as it's looking like Mr. Market is running out of gas at these levels.

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      2           1        0.538    123
December   4      3      2           0        0.571    282

     And the winner is...

There are now some pretty good indications of a reversal in the technicals tonight, as much as I dislike calls bottoms (or tops), logic simply dictates a call of Friday higher.  That's all she wrote.  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.