Tuesday, December 31, 2013

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1835.58.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

That's one of the hazards of forecasting on holiday weeks.  The technicals looked ripe for a fall but the Dow managed to eke out a 0.16% gain on the penultimate day of the year anyway (thought the SPX did decline a bit).  So here we are - the last day of 2013 is upon us.  Once more into the breech, and then we take a day off.  So Happy New Year to one and all and here's wishing you a safe, happy and prosperous 2014!

The technicals (daily)

The Dow: Monday's gain might have only been 26 points, but it was enough to cancel last Friday's star, particularly since we remain in a rising RTC.  Indicators remain pegged on overbought but we've seen all year how that can just go on and on.  So in the absence of any other bearish signs, this chart resumes bullish.

The VIXAt least I got the VIX right last night when I wrote "this one looks ready to move higher."  And it sure did, with a gap-up green marubozu good for a nearly 9% gain that broke out of the descending RTC for a bullish trigger to go with a completed bullish stochastic crossover.  So with the indicators just barely off oversold, it looks like there's more upside left here.

Market index futures: Tonight all three futures are virtually unchanged at 12:24 AM EST with ES dead flat and YM up a scant 0.02%.  Monday's red spinning top in ES took it outside its rising RTC for a bearish setup.  The new candle will be a bearish trigger unless ES can close above 1845 on Tuesday, which doesn't seem likely.  With resistance at 1837 intact, this chart continues to look like it wants to go lower.

ES daily pivot: Tonight the pivot inches down from 1836.58  to 1835.58.  That still leaves ES below the new pivot so this indicator remains bearish.

Dollar index: On Monday this head-scratcher of a chart gave up all of Friday's gains to finish almost exactly in the same place.  The failure to capitalize on Friday's big move plus indicators now marching lower suggests a lower dollar on Tuesday..

Euro: I did miss the euro though, which moved strongly higher on Monday, not lower.  So while RSI has now entered overbought, the stochastic has only just completed a bullish crossover.  But the euro now faces strong resistance around 1.3805 and is in fact moving lower in the overnight.  So I'm just going to call again for a move lower on Tuesday.

Transportation: Last night I wrote that the technicals "suggests a move lower Monday".  It wasn't a bad suggestion with the trans down just a bit on a nice star.  That makes two dojis in a row now and still leaves us highly overbought and right at the edge of the rising RTC.  This chart continues to look toppy to me.

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   6      6      4           0        0.500    176

     And the winner is...

While the technicals continue to look bearish, Tuesday is New Year's Eve and I'm sure the big players will have already departed for the Hamptons or their ski chalets in Aspen.  So I'm figuring a slow day which could end either way.  Therefore, I'll just end the year with a call of Tuesday uncertain  See you again Wednesday night.

ES Fantasy Trader

Portfolio stats:  the ESFT is closed for 2013.  The account ends the year 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.  We'll reset to $100,000 on New Year's day and start over for 2014.

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