Friday, December 20, 2013

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 1801.25.  Holding above is bullish.  (Now running the "H" contract).
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Ho hum - I'm glad I called Thursday as ":uncertain" because the Dow was up 11 and the SPX was down 1, that's about as uncertain as it gets.  I wrote "I think we could be in for a doji day" and that's what we got.  Since I'm taking a Christmas vacation all next week, this will be my last post until Sunday, December 29th.  I wish all my readers a merry Christmas.  Take some time to be with the ones you love, and tell them you love them, because the time will come when you're no longer able to.  And with that jolly thought, let's hit the charts once again as 2013 grinds to a close.

The technicals (daily)

The Dow: With its small gain, the Dow formed a little spinning top on Thursday.  But not having yet hit the upper BB and with the indicators still not quite to overbought, this reversal indicator require confirmation.  So this chart is too tough to call.

The VIXAnd on Thursday the VIX formed a fat hammer.  But like the Dow, the other confirming factors like indicators and BB's are not present, so we have to take a pass here too.  Thursday's 2.54% gain might simply be a DCB.  I'll also note that the 200 day MA is now directly overhead and with the indicators continuing lower, this lowers the odds of a further rise in the VIX.  We'll see.

Market index futures: Tonight all three futures are higher at 1:18 AM EST with ES up by 0.17%.   On Thursday ES, like just about everything else, put in a doji at the top of Wednesday's big gains.  While the overnight is positive, it still has to break above resistance at 1805.  RSI has just now gone overbought but the stochastic is still a ways from a bearish crossover and the upper BB is now at 1814, so it's not out of the question for ES to move at least a bit higher form here.

ES daily pivot: Tonight the pivot rises from 1790.75  to 1801.25. That still leaves ES above the new pivot so this indicator continues to be bullish. 

Dollar index: On Thursday the dollar gapped up big time, up a monster 0.67% for a bright shining evening star.  The last three times we saw this, the dollar was lower the next day.  And with RSI now officially overbought, I'm thinking that will be the case here too..

Euro: Similarly, the euro gapped down on Thursday and officially went oversold.  But the stochastic isn't yet in position for a bullish crossover and the lower BB is still miles away.  And with the overnight now down another non-trivial 0.16%, it looks like the euro's not done going lower yet.

Transportation: And finally, yet another doji with the trans, down just 0.01% on Thursday.  But it's the same story here too - no overextended indicators or other extremes.  So while this is a reversal warning, it's one that requires confirmation.  I'm not touching this one.

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   5      5      4           0        0.500    160

     And the winner is...

With all the dojis around tonight the cautious thing would be to simply call Friday uncertain.  But given the lack of outright bearish signs and the fact that we're not really badly overbought yet, I'm going to go waaay out on a limb and call Friday higher.  See you again Sunday after next!

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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