Friday uncertain though technically bullish

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

• Friday uncertain, though technically bullish.
  
• ES pivot 1554.08.  Holding above is bullish
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

The market made quick work of two days of dojis as the Dow climbed once again on Thursday, this time adding on another 84 points to make it ten in a row now and yet another all-time record high close.  And so the party roars on.  So are any guests edging nervously towards the doors yet?  Doesn't look like it but let's check the charts for exit signs anyway - one never knows.

The technicals (daily)

The Dow: Thursday's 0.58% gain canceled the reversal warnings of two days of dojis here.  This is precisely why I refused to call a top the past two nights.  You don't catch the falling knife, and you also don't go for the, what's the opposite of a falling knife, a rising skyrocket?  All this green marubozu accomplished was to make this chart look bullish again and keep us right in the middle of a now 13 day long rising RTC.  One good thing about this - the longer RTC's go on, the easier it becomes to spot the exit - and we're nowhere near there yet.

The VIX:  Last night I wasn't ready to call the VIX lower again on Thursday, but that's where it went anyway, down another 4.48% in a move that averted an exit from the descending RTC.  Given this, and with no bullish pattern in sight and all support now gone, it would not surprise me at all if the VIX didn't visit its lower BB at 10.07 Real Soon Now.

Market index futures:Tonight all three futures are higher at 1:00 AM EDT with ES up by 0.06%.  The strong performance of ES on Thursday helped avert a rising RTC bearish exit.  In fact, tonight's candle is about the same as last night's at this hour - sitting right on the edge of the RTC.  But still no sign of a breakdown yet.

ES daily pivot: Tonight the pivot inches up from 1547.83 to 1554.08.  Once again, above before, above after, looking bullish.  Nothing new here.

Dollar index: On Thursday the dollar took a  substantial 0.34% hit.to close outside its rising RTC for a bearish setup.  As its indicators continue to slowly slide lower, it looks like we could see continued lower here on Friday.

Euro: The Big Sleep award of the week goes to the euro, which is still mired in a tight band centered about 1.3000 going back ten sessions now.  With the overnight inching higher after Thursday's early losses, it looks like just more sideways action here on Friday.

Transportation: And finally, the trans continue to outperform the Dow as they climb their upper BB.  Dow Theorists take note.  And the pause we got last week only dipped the indicators a little, thus putting some more gas iback into the tank.  So this chart is once again looking bullish.


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      4      3      2           0        0.571    212

     And the winner is...

Thursday held true to its historical role of outperforming, but Friday is triple-witching and much more problematic.  While the charts have all turned fairly bullish once again, I hesitate to call Friday higher because of all the expirations going on on Friday.  There's also a number of economic news items coming out that could move the market.  So while the market looks higher technically, in the real world I just have to call Friday uncertain.  I'd still not be putting on any shorts here just yet.  Best to stick with the long pants until the model struts the catwalk.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in the absence of any apparent good overnight trend, as well as the inherent risks around triple-witching.

Thursday uncertain

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

• Thursday uncertain.
  
• ES pivot 1547.83.  No guidance.  Now using  M contract..
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Yawn - another snoozer of a day on Wall St. Wednesday.  I guess my call of "uncertain" was about right, with just tiny moves in all three major averages.  I'm trying to think of something new to say but I'm afraid it's just deja vu all over again.  There is literally almost nothing changed between last night and tonight.  But I'll make a few comments anyway for your reading amusement.

The technicals (daily)

The Dow: The Dow put in a carbon copy doji on Wednesday but remains in the rising RTC, overbought indicators, you know the drill.  These two dojis might be a sign that the Dow's streak is starting to run out of gas, or they may not.  In the face of so much momentum, we need confirmation before calling a top here.

The VIX:  While the VIX dropped 3.59% on Wednesday, that still keeps in inside a consolidation area centered about 12.  All today did was nudge us closer to the edge of the descending RTC for a potential bullish setup - but not yet.

Market index futures: Tonight the futures are mixed at 1:29 AM EDT with ES down by 0.05%, YM down 0.04% but NQ up 0.02%.  Another overnight of little movement and even less guidance..  We got a second hanging man on Wednesday but it remains inside a long-running rising RTC.  But we are finally on the edge.  Any move lower on Thursday would signal a bearish setup and a possible sign that this uptrend is over.  Indeed ES has been unable to make any headway above 1551 for there days now.  But there still isnt' much direction on the daily chart.

ES daily pivot: Tonight the pivot inches up from 1546.67  to 1547.83.  We were above before and remain higher, so that's bullish, although not by much.  Still ES doesn't seem too interested in testing the pivot right now.  Reminder - we're on the M contract now.

Dollar index: On Wednesday the dollar narrowly averted a rising RTC exit with a 0.37% gain.that suggests its upward trend that began way back on February 1st is not over yet.

Euro: And the euro fell out of its recent range, dropping below 1.3000 for the first time since last December 10th.  Last week's bullish RTC exit has apparently come to naught, and with continuing lower in the overnight, a lower close Thursday is a definite possibility.

Transportation: Perhaps the most (heck the only) interesting chart of the day, the trans resumed their march higher on Wednesday, gaining an outsized 1.63% that belied the Dow's flat-lining.  This popped the trans out of their recent consolidation range, stopping only at the upper BB of 6237.  But there's nothing here to suggest anything but further upside in the cards.


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      4      3      2           0        0.571    212

     And the winner is...

So there you have it - same old same old.  And just like last night, there's not much meat to chew on here so I'm just going to have to declare Thursday uncertain.  Seems like everyone's waiting for the big pullback now.  I suppose that with the Dow's winning streak now at nine, it's got to come sooner or later, but I'm just not seeing it quite yet.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in the absence of any apparent good overnight trend..

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1552.58.  No guidance.  Switching to M contract on Wednesday..
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

A late afternoon rally on Tuesday saved the day for the Dow, ending with a win of just under three points.  And while the SPX did end the day lower my call was for the Dow, so that's a miss though not by much.  Too bad the session didn't end three minutes sooner.  I think the basic premise was correct though.  ES dropped below the pivot at 11 AM and was unable to regain it for the rest of the session.  Now let's move on as we continue to wend our way through op-ex week.

The technicals (daily)

The Dow: It was a bumpy small range day on Tuesday that left the Dow's winning streak unbroken, just barely, now at eight straight.  But the resulting doji was the first reversal sign we've seen since February 28th.  That one flopped, but this time we are much more overbought so although we remain solidly inside a rising RTC, I'd pay some attention to this one.  With an RSI at 100 for two days running now, this chart is now looking a bit toppy.

The VIX:  On Tuesday the VIX recovered some of its losses from Monday to close at 12.27.  And while it remains quite oversold, it now faces resistance at 12.3.  And as long as we remain in a descending RTC, it's too early to call the VIX higher.

Market index futures:Tonight all three futures are barely lower at 12:55 AM EDT with ES down by 0.03%.  On Tuesday ES gave us a red hanging man but one that remained inside the rising RTC.  The overnight action is teetering on the edge of this RTC, so we may or may not get a bearish setup on Wednesday.  Just eyeballing it though, this chart, like the Dow, is starting to look toppy to me.

Reminder - I will be switching to the "M" futures contracts on Wednesday, so the numbers will change.

ES daily pivot: Tonight the pivot just barely ticks down from 1552.92  to 1552.58..  After a brief and failed effort to break over the pivot earlier Tuesday evening, we're back below the new number, though just barely.  This is one of those cases where ES is just threading about the pivot looking for a direction.  In situations like this there really isn't any guidance.

Dollar index: Like many other charts on Tuesday, the dollar gave us a doji with a tiny 0.02% gain.  That took it right to the edge of its rising RTC.  One more day of sideways action will give us a bearish setup. With the indicators having peaked at overbought and momentum slowing, it looks like the dollar is poised to move lower too..

Euro: Last night I had nothing really to say about this chart and that's just what the euro delivered on Tuesday - a real yawner as the currency remains range-bound between 1.3000 and 1.3050.  With the overnight action smack in the middle of that range, once again, there's nothing to see here.

Transportation: After Monday's small green spinning top, the trans on Tuesday gave us a bigger red spinning top.  As we remain quite overbought and having now exited the rising RTC, the trans are looking ready to move lower.


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      4      3      1           0        0.571    212

     And the winner is...

According to The Stock Traders Alamanc, March op-ex week is historically strong, and improves as the week goes on.  However, the charts are starting to look a bit toppy to me  But we've seen so many of these one-day declines come to naught so far this year that I'm unwilling to call the market lower on that basis alone.  So with a pretty wishy-washy environment and in the absence of any definitive read one way or another, I'm going to just declare Wednesday uncertain.  My vague guess is that we might see a bit of  down day Wednesday followed by a stronger finish to the rest of the week.

ES Fantasy Trader


Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in the absence of any apparent good overnight trend..

Tuesday lower if ES pivot fails

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

• Tuesday lower if we break under ES pivot, else higher.
  
• ES pivot 1547.75.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1538.25.

Recap

And the hits just keep coming.  The Dow is now on a seven session tear, even longer than the one we got back in January.  They say what goes up must come down, but they never say when.  Let's see if we can't get the charts to tell us.

The technicals (daily)

The Dow: At the risk of sounding like a broken record, this is the third night in a row where all the factors are unchanged.  Just look at last night's analysis and that's it.  Rising RTC, overbought indicators, you know the drill.  So once again, no bears in sight.

The VIX:  While Monday's 0.35% gain in the Dow may have been unremarkable, the VIX took an impressive 8.18% dive on a deep red marubozu to end at 11.56.  I had to back out all the way to the monthly chart to find the last time the VIX was this low - February 2007.  And at this level, it's at the lower end of the range it sat in from 2004 through 2006.  But unlike then the lower BB now just continues to fall away, now down to 6.15!  And while we're looking at the monthly chart, I'll note that so far, March is forming a big bearish engulfing pattern.  I want to say that the VIX has nowhere to go but up from here, and yet I'm not seeing it right now.

Market index futures:Tonight all three futures are lower at 1:14 AM EDT with ES down by 0.08%.  However, like last night, the moves are slight and there's little guidance from the overnight action.  The decent gain in the daily ES though keeps us locked in the rising RTC and climbing the upper BB.  ES is going to have to close below 1547 on Tuesday to initiate even a bearish setup.  With the positive bias of March op-ex week, that seems unlikely.

ES daily pivot: Tonight the pivot rises again from 1547.75  to 1552.92. This now leaves us less than two points above the new pivot, putting it into play.   Unlike last night, the gradual drift lower since around9:30 PM suggests that ES might have some interest in visiting this level.  But it remains bullish unless we break under.

Dollar index: The dollar gave back most of Friday's gains on Monday, dropping 0.18%.on a bearish dark cloud cover.  Nevertheless, we remain in a rising RTC so we need some confirmation on Tuesday before declaring this uptrend over.

Euro: Meanwhile the euro continued its consolidation in the 1.3000-1.3050 neighborhood.  A small gain on Monday, a small retracement in the new overnight, nothing to see here.

Transportation: After a big gain on Friday, the trans put in a small spinning top on Monday, at least warning of a reversal with a tepid 0.12% gain.  But with such strong upward momentum, I hesitate to call them lower on just that basis.

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

  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

  9  2/25       30         52        -      -   1516

 10  3/4        29         39        -      -   1518

 11  3/11       41         26        +      +   1551     

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, so both I and the majority were again correct.   We therefore continue the year with an accuracy of 6  for 7, or 86%. 

And this week I switched my vote from bearish to bullish.   That keeps me in sync with the majority of the poll, which flipped from 29-36 bullish-bearish to 41-26.  My shift was due to the change in the weekly and monthly SPX candles which are now looking quite bullish following the recent run-up.



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      4      2      1           0        0.667    215

     And the winner is...

Little has changed tonight compared to last night.  But I'm becoming a bit concerned about the failure of the trans to make any real headway past 6150 in a week now and at seven straight, this rally is starting to get a little long in the tooth.  We've also got the futures drifting lower tonight and that's different.  Yet there's still no real bearish signs to speak of so I'm going to make a conditional call: if ES remains above its pivot of 1552.92, then we'll close higher Tuesday.  But if ES breaks convincingly below it by mid-morning, we close lower.

ES Fantasy Trader

Today we took a nasty 13.5 point loss following another unproductive round of tape-fighting.

Portfolio stats: the account drops to $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we simply stand aside  and do some head-scratching.

BOT    10    false    ES    MAR13 Futures     1553.00    USD    GLOBEX    12:15:26
SLD    10    false    ES    MAR13 Futures     1538.50    USD    GLOBEX    MAR 7 01:10:51 

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1547.75.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1538.25.

Recap

And so the long bubble-up goes on unabated.  On Friday the Dow gained another 68 points to extend its winning streak to six in a row on the heels of some decent jobs numbers.  Can we make it a lucky seven?  We roll the charts and see what tumbles for Monday.

The technicals (daily)

The Dow: The three white soldiers I mentioned last week just keep right on marching.  In fact, they're been joined by three more.  We now have a whole platoon intent on taking the Dow to new heights.  In fact, nothing has changed on Sunday night from last Thursday night.  Same rising RTC, same broken overbought indicators, same lack of any bearish signs.  So I can only draw the same conclusion - this chart looks bullish.

The VIX:  In contrast, there are a few bullish signs on the daily VIX which dropped another 3.59% on Friday.  This brought it to 12.59 just above its last year-long support level of 12.40.  But the candle was a classic gravestone doji.  And the stochastic is close to forming a bullish crossover from quite oversold levels.  So though we should wait for confirmation, there is at least a suggestion here of a higher VIX on Monday.

Market index futures:Tonight the futures are mixed at 1:05 AM EDT with ES dead flat, NQ down 0.02% and YM up by 0.08%.  So no guidance there.  And little else new here - the daily chart remains locked into its rising RTC and the indicators are all pegged at overbought (RSI is now 100).  And yet still no sign of a pullback.  But remember that ES spent most of January equally overbought without pulling back.  So I guess it ain't over til it's over.

ES daily pivot: Tonight the pivot inches up from 1541.92  to 1547.75.  Once again, we were above the old pivot and remain above the new one, though only by two points, so the pivot is definitely in play on Monday.  But as long as we remain above, it's a positive sign.

Dollar index: After a big drop Thursday, the dollar put in en equally big gain on Friday to remain inside a rising RTC now going back to February 1st.  The indicators have been overbought almost constantly since that time so they're now useless. The only pattern, if there is one, is that since that date, the dollar has paused tow of the last three times it made big one day gains.  But here too, in the absence of any real bearish signs, it is premature to call the dollar's recent run over.

Euro: And while the dollar rose, the euro sank on Friday, giving back almost all of its gains from last Thursday.  But that still kept it out of the descending RTC, so that's now a bullish trigger.  But one has to wonder if there's a bullet in the gun, because the euro is moving lower in the overnight, trading just under its pivot at 1.3031 and showing no interest in challenging it.  My best guess is that the euro will trade around that level on Monday.

Transportation: After a fake-out breakdown on Wednesday and Thursday, the trans regained all their lost ground on Friday with a 1.02% green marubozu that out performed the Dow.  It also marked the first time they were able to close above 5875, last week's resistance line.  However, Friday's close wasn't enough to regain the rising RTC, so that's a bearish trigger despite the green candle.  And the indicators have all peaked at overbought re begun moving lower.  It's not clear that the trans will be able to advance further from here, but their performance has been unstoppable so far this year and this is one bus I don't want to stand in front of.  So I'm going to wait until I see a move lower before declaring this uptrend over.


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      3      2      1           0        0.600    165

     And the winner is...

It's really getting almost nerve-wracking.  There's really only one shred of hope for the bears tonight in the form of the VIX and that one's not all that great.  So in the absence of anything more substantial, and with the Monday of March op-ex week being historically strong, logic dictates a call of Monday higher.


ES Fantasy Trader

Portfolio stats: the account remains $99,375 after 7 trades (6 for 7 total, 3 for 3 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we remain short at 1538.25 and take the heat.  I'm giving this one one more day to come in and then I'm giving up on it.  That'[s what I get for trying to play the counter-trend hero and not waiting for a regression trend exit.