Wednesday, December 11, 2013

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain
  • ES pivot 1805.17.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

I did mention the possibility of an evening star forming last night but decided to ignore it because the indicators were nowhere near overbought.  Oops.  That was a mistake.  Fortunately we don't need to be right every time to still make money.  So we simply move on to Wednesday.

The technicals (daily)

The Dow: Though not a classic evening star Tuesday's red marubozu confirmed Monday's inverted hammer and put an abrupt end to a developing trend..  Though still not overbought, this chart has now turned bearish.

The VIXI also missed the VIX last night.  It looked bearish technically but on Tuesday it gained 3.11%, albeit on a red candle.  But the indicators continue to fall off overbought - go figure.  There's also no RTC right now and this is no pattern I recognize so I'll just have to admit this chart is too tough to call.

Market index futures: Tonight the futures are mixed at 12:38 AM EST with ES up by a scant 0.04% YM up all of 0.01% but NQ down 0.04%.  Overall, things are fairly flat in the overnight but the failure of ES to  capitalize on Monday's gains and touch its upper BB is a bearish sign. We also closed just outside the rising RTC on Tuesday for a bearish setup and the stochastic appears poised to make a bearish crossover very shortly.  So this chart now looks bearish.

ES daily pivot: Tonight the pivot dips from 1808.42  to 1805.17.  We are now below the pivot for the first time in a few days, so this indicator turns bearish.

Dollar index: At least I got the dollar right when I wrote "lower looks likely again" last night as it lost another 0.22% on a gap-down spinning top.  We continue to hug the lower BB and remain in a steep descending RTC.  There's at least a warning of a reversal now but one which requires confirmation.  Overall though, this chart continues to look bearish.

Euro: I also called the euro last night, writing "this upward  move still has a ways to go, possibly all the way to resistance at 1.3800".  And what was Tuesday's high? 1.3796.  Bada-bing!  So with that target now out of the way with an inverted hammer and indicators now highly overbought, it looks like the next move is lower.  So far the overnight isn't rejecting that idea, down just 0.03%.

Transportation: The trans' 0.73% loss on Tuesday provided a quick exit to a short rising RTC.  But the indicators are still well short of overbought.  There's no classical pattern that this matches, so I'm taking a pass on this chart too.

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   3      3      1           0        0.500    178

     And the winner is...

I don't know - we do have some bearish signs out and about tonight but I'd feel a lot happier calling Wednesday lower if the indicators were a bit more overbought.  We also have some news tonight that the Washington Clowns have apparently reached some sort of budget deal and that might move things higher.  So all in all, I think I'm just going to call Wednesday uncertain.

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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