Thursday higher

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

• Thursday higher , low confidence
  
• ES pivot 1789.67.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

It was sort of a wild ride on Wednesday - we were up, then we were down and finally the Dow finished with just a 25 point loss, but it didn't really play out the way I had anticipated with my conditional call so I'm counting that as a miss.  It works a lot of the time, but not always.  So now let's move on to Thursday.

The technicals (daily)

The Dow: On Wednesday the Dow put in a tall spinning top doji.  With the indicators now well into oversold territory this is a fairly good reversal warning.  Though we remain in the descending RTC, I'd not be going short at these levels.

The VIX:  On Wednesday the VIX put in an unusual candle with a tall spinning top doji that traded almost entirely above its upper BB.   That's our third close in a row above the upper BB.  Also RSI has now hit 100, the stochastic is within a hair of making a bearish crossover, and we just dropped out of the rising RTC for a bearish setup.  Oh yes, and we had some bearish divergence in VVIX, which fell while putting in a dark cloud cover.  So overall, the VIX now looks ready to move lower on Thursday.  

Market index futures: Tonight all three futures are lower at 12:16 AM EST with ES down by 0.04%.  Wednesday's long spindly doji in ES combined with now-oversold indicators and continuing support around 1793 now point to the possibility of a move higher by the end of the week.

ES daily pivot: Tonight the pivot drops from 1793.17  to 1789.67.  With a fairly flat ES in the overnight, that combines to put us back above the new pivot for the first time in a few days.  So this indicator now turns bullish.

Dollar index: On Wednesday the dollar gained all of 0.01% but did it on a very tall spinning top doji.  With such a big attempt at a rally rebuffed, and remaining inside the descending RTC, I'd just have to say the next move here is likely lower.

Euro: And a tall doji on the euro too which finished Wednesday virtually unchanged.  The euro really seems to like that 1.3589 level.  And in the absence of any other directional forces, I'd have to say that we're in for some more sideways action for a while.

Transportation: Pretty much the same story with the trans as everything else on Wednesday- yet another tall spinning top doji.  The indicators here are not quite down to oversold but the magnitude of the current pullback is now about the same as the previous one last month, so I would cautiously call the trans higher Real Soon Now.

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

 47 11/18       52         30        +      +   1798 

 48 11/25       58         29        +      +   1805

 49 12/2        56         26        +      +   1806

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 along with the majority of the poll so once again we were both right.  Therefore the Night Owl  continues the year with an accuracy of 26 for 45, or 58%.   The poll as a whole improves to 21 for 42 or 50% - it continues to be a tough year for the poll so far, with not much time left for redemption.

This week is little changed from last with both bullish and bearish sentiment decreasing just a couple of points, but the majority remaining decidedly bullish and that was my take on it last Sunday based on the weekly and monthly SPX charts.


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   1      1      1           0        0.500     94

     And the winner is...

On Wednesday the SPX Hi-Lo index ticked up from 80 to 83, a bullish sign.  The NYSE A/D line is also quite low now and its MACD seems to have hit a minimum, also a bullish sign.  Then we have the VIX looking ready to reverse.  And good old Dr. Copper put in a bullish engulfing pattern to break a long slide.  These signs, along with a veritable plethora of spindly dojis all make me think that we will close 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.