Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1576.08. .  Holding above is bullish..
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night I was thinking we might see a doji on Thursday.  No such luck as the Dow just continued motoring higher to close up another 63 points.  But hey, I'll take it.  I've actually been trading very little lately as I'm just letting my longs run.  But you gotta wonder - just how far can they run?  We now scan the charts for a glimpse of the finish line.

The technicals (daily)

The Dow: OK, so on Thursday the Dow gave us yet another green candle, for a three white soldiers pattern.  Actually four white soldiers by this point, heck it's a whole squad of white soldiers.  But they are marching up a very tight (Pearson's = 0.996) rising RTC.  The indicators are now (finally) overbought, though the stochastic still has yet to begin its bearish crossover.  So I still can't call a top here (I tried that two days ago and got my head handed to me).

The VIX:  And I was right last night to resist the temptation to call the VIX higher just because it had dropped so much.  And sure enough, it went even lower on Thursday, down another 0.97%.  We remain in a descending RTC and the stochastic, while quite low, still isn't interested in a bullish crossover.  Next support coincides with the lower BB at 11.40.  However, the last three VIX downtrends never made it to their lower BB so that pretty much leaves us right where we were last night - still too soon to call the VIX higher.

Market index futures:Tonight all three futures are lower at 1: 38 AM EDT with ES down by 0.19%.  Es traded above its upper BB all day Thursday and put in a stubby spinning top.  The new candle is forming as a dark cloud cover and is sitting right on the edge of the rising RTC.  Any lower and it will become a bearish setup.  The indicators are also now overbought and the stochastic looks ready to do a bearish crossover any minute.  So this chart is now looking ready to roll over.

ES daily pivot: Tonight the pivot rises again from 1576.08  to 1587.17.   This time ES was not able to remain above the new pivot, so the overnight drift lower is now bearish.

Dollar index: Well the dollar did put in a green candle on Thursday, but it came on a gap down, so my call for a higher close was wrong as the dollar lost 0.37% to close on its lower BB.  But that has begun falling away and the overall trend remains down so there's no real reversal signs here tonight.

Euro: And of course since my dollar call was wrong, so was my euro call, as it hit its upper BB again on Thursday and closed just below it at 1.3118.  So we remain in the rising RTC, the upper BB is climbing away,  and the indicators are all broken-overbought.  Ergo it's too soon to call this uptrend over.

Transportation: The trans now have one of those up one day down the next things going.  They lost 0.27% on Thursday after Wednesday's big jump.  But we're still solidly inside a rising RTC and indicators are not yet overbought so it's too early to call a top here either.


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      3      2      2           0        0.600     20

     And the winner is...

We're in a similar situation tonight as last night - a lot of indicators flashing reversal warnings, but ones that require confirmation.  We didn't get it on Thursday, so the result is that things are looking a bit more bearish tonight, but I'm still not comfortable calling for a down day without confirmation.  So unfortunately, I have to call Friday uncertain again.  Perhaps this will be the doji I thought we'd see (but didn't) on Thursday.

ES Fantasy Trader

Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight we stand aside yet again because of the "uncertain" call.

Thursday uncertain

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

• Thursday uncertain.
  
• ES pivot 1576.08. .  Holding above is bullish..
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Ha - I should listen to my own advice.  Last night after noting a bunch of reversal signs that all required confirmation, I decided to ignore all that and call Wednesday lower anyway.  So naturally the Dow jumped 129 points for its best day in over a month and another record close.  That's what I get for trying to be the heroine and picking the top.  But since I'm always net long, I made money anyway so I can't complain.  We now move on to Thursday where I will try to be a bit more conservative.

The technicals (daily)

The Dow: The Dow has had a great three day run, leaving all that wishy-washy indecision from the second half of March in the dust.  In fact, Wednesday closed above its upper BB of 14,730.  This also brings the RSI into overbought territory although the stochastic has a way to go before even beginning a bearish crossover.  So the candlesticks are pretty bullish but I'm concerned about closing above the upper BB and the fact that we're now fairly extended from the Dow's pivot of 14,663.  Still, I'm not going to repeat last night's mistake by calling the Dow lower before seeing a good reversal sign, and I don't see one yet.

The VIX:  On Wednesday the VIX didn't just break support at 12.74, it jumped right under it, gapping down for a 3.74% loss to put it below last month's consolidation range.  The VIX now has a steep descending RTC going and still isn't oversold.  And with the lower BB at 11.33 there's still a lot of room to run lower.  Only thing is that where we stopped on Wednesday is another support line - 12.36.  Still, without a reversal candle, I'm not calling the VIX higher yet.

Market index futures: Tonight the futures are mixed at 1:13 AM EDT with YM up 0.05%, NQ down 0.12% and ES dead even.  On Wednesday ES simply pulverized its upper BB at 1573, and the overnight continues to trade above the new BB at 1578.  The conventional wisdom is that upon hitting the upper BB, a chart will reverse.  But one only has to look back one month to see how ES crawled up its upper BB for six straight days before peeling off.  And with so much positive momentum and indicators that still haven't even hit overbought, I'm not ready to call ES lower just yet.

ES daily pivot: Tonight the pivot pops from 1562.58  to 1576.08.  Although that jump cuts into our distance from the pivot, ES remains comfortably above the new number so that's a positive sign.

Dollar index: Last night I warned of a possible reversal for the dollar and on Wednesday we got the confirmation I was looking for as the dollar bounced off its lower BB and gained 0.27%.  In fact this leaves us with a fairly good morning star pattern so with indicators looking to have bottomed at oversold, I'd say odds are good for more upside here on Thursday.

Euro: After hitting its upper BB on Tuesday, the euro touched it again on Wednesday before retreating to form a classic bearish inverted hammer in harami position.  It's sort of wandering in the overnight but with no real follow-through to the upside and the overbought indicators, I'd say there's a good chance of a move lower on Thursday, which squares with my call for a higher dollar.  Oh, and right now at 1.3073 we're right on the edge of the rising RTC.  Any lower and it's a bearish setup.

Transportation: The trans continued their winning ways on Wednesday, outperforming the Dow once again with a 1.79%  pop to remain inside a nice rising RTC.  With indicators having only just left oversold,I see nothing here preventing more upside action on Thursday.


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      3      2      1           0        0.600    149

     And the winner is...

The pattern lately has been for big up days to be followed by some consolidation.  And with a continuing absence of any real bearish signs, I can't really call the market lower at this point.  But we may need a breather here so I'm expecting a doji day.  Accordingly, I can only call Thursday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight we stand aside yet again because of the "uncertain" call.

Wednesday lower

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

• Wednesday lower, low confidence.
  
• ES pivot 1562.58. .  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Looks like last night's logic prevailed as the positive looking charts rewarded us on Tuesday with a 60 point gain for the Dow, and finally broke that record streak of alternating up and down days at an amazing 17 in a row.  So can we build on this or will the bears reassert themselves on Wednesday.  We consult the charts for inspiration.

The technicals (daily)

The Dow: On Tuesday the Dow ground steadily higher most of the day to close right on its upper BB at 14,673 after a brief excursion even higher.  But we're still not overbought on the indicators and the bullish stochastic crossover I mentioned last night is now complete.  Today's close also broke last week's resistance at 14,662 so this chart remains bullish tonight.

The VIX:  Meanwhile the VIX fell again, dropping 2.65% right back down to its support level around 12.75.  The indicators are middling, the inverted hammer isn't the best reversal indicator and the stochastic is still a few days away from a bullish crossover.  I'd call the VIX lower again but for the support line.  It's not clear how much more downside is available here.

Market index futures:Tonight all three futures are lower at 12:42 AM EDT with ES down by 0.06%.  On Tuesday ES gave us a gap-up spinning top that pierced its upper BB intraday, failing to crack resistance at 1565.  The developing overnight candle is a dark cloud cover though the stochastic isn't really near forming a bearish crossover and the indicators are kind of wandering about between overbought and oversold.  So the overall impression is weakly bearish, and certainly not as good looking as it was last night.

ES daily pivot: Tonight the pivot inches up from 1555.00  to 1562.58. This move combined with a sagging ES now puts us below the new pivot, just barely, but still a bearish sign.

Dollar index: The dollar on Tuesday completed its trip from upper to lower BB with a gap down 0.55% loss that drove RSI oversold and flattened out the stochastic at a low level.  The stubby inverted hammer at least warns of a possible reversal higher, but requires confirmation..

Euro: And as the dollar hit its lower BB, on Tuesday the euro hit its upper BB with a fifth consecutive gain.  But that may be the end of the line as RSI is now quite overbought, the stochastic looks ready for a bearish crossover and the overnight is trading down 0.10% so far.  A move lower here would square with my guess for a higher dollar on Wednesday.

Transportation: The trans have been working well as a leading indicator lately and on Tuesday they dropped 0.31% even as the Dow rose 0.41%.  But we remain in a rising RTC, have a recently completed bullish stochastic crossover and rising indicators.  The only bearish sign here is Tuesday's stubby red spinning top, but that requires confirmation.

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   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

 13  3/25       31         38        +      -   1557 

 14  4/1        38         38        +      x   1569

 15  4/8        32         50        -      -   1553

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 correct.   We therefore continue the year with an accuracy of 7  for 11, or 64%. 

This week we find a small drop in bullish sentiment but a big jump in bearish as a number of participants switched over to bearish, me included.   I can't speak to everybody else, but I'm seeing some strong resistance on the weekly SPX chart and a developing dragonfly doji on the monthly.  Both of those are becoming increasingly overbought 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      3      1      1           0        0.750    149

     And the winner is...

Tonight we've got a bunch of vaguely bearish signs on the charts but most of them require confirmation.  Adding to the mix are Fed minutes due out on Wednesday.  My personal expectation is that the market may not be too happy with that.  And even though the conservative route would be to call Wednesday uncertain, I do think there are enough bearish signs tonight to call for a lower close Wednesday.

ES Fantasy Trader

Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight we stand aside yet again because of the uncertainty revolving around the Fed minutes.  I know, if it's not one thing, it's another.

Tuesday higher

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

• Tuesday higher, low confidence.
  
• ES pivot 1555.00 .  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Once again the market opened down but then spent the rest of the day floating back up to the surface - the "rubber ducky" market as I call it.  You can push him underwater but he always pops right back up.  Quack quack.  Now let's see about making a (duck) call for Tuesday.

The technicals (daily)

The Dow: Monday was very similar to last Friday - an initial dive followed by retracement.  Only this time the Dow managed to finish in positive territory by 48 points thereby keeping the one up/one down streak alive, now up to, gosh, it seems like 147 days by now.  They were even talking about it on CNBC.  Anyway, Monday gave us a second hammer in a bullish engulfing configuration as well as a stochastic just a hair away from a bullish crossover.  So the chart is back to looking bullish.

The VIX:  Last night I wrote "I'd be quite surprised to see the VIX move higher from here on Monday."  And indeed there was no surprise on Monday  as the VIX dropped 5.24%.  So - rejected by the 200 day MA, two red candles, bearish stochastic crossover, no support until 12.71 - it all spells lower again to me.

Market index futures:Tonight all three futures are higher at 1:42 AM EDT with ES up by 0.11%.  Monday's big green candle in ES confirmed Friday's hammer and formed a bullish engulfing pattern.  It also brought us just back into the rising RTC.  The overnight seems to be providing follow-through ad with a freshly completed bullish stochastic crossover, I see no reason why ES can't visit its upper BB at 1565.79 on Tuesday.  That also happens to mark resistance from last week.

ES daily pivot: Tonight the pivot vaults from 1544.83  to 1555.00 even.  We were above before and remain well above the new pivot, so this remains bullish.

Dollar index: Last night I wrote "the dollar at least has a shot at moving higher from here."  Well the shot was a bullseye on Monday as the dollar jumped 0.32% to confirm Friday's hammer and very nearly give us a bullish stochastic crossover.  Interestingly, the dollar and the market which for a long time had been inversely correlated, now appear to be moving in sync.  And this chart looks ready to move higher again on Tuesday.

Euro: After putting in a simple star on Monday the euro resumed its advance overnight and is now close to its upper BB at 1.3094.  This move also has the indicators quite overbought and the stochastic is flattening out for a bearish crossover.  However, we remain inside a rising RTC, so while there's at least a chance of a move lower on Tuesday, it's not a sure thing.

Transportation: The trans continue to outperform, gaining 0.90% on Monday to the Dow's 0.33%.  We also now have a completed bullish stochastic crossover, an oversold RSI, and a bullish RTC trigger.  Looks like more upside in store here on Tuesday.


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      2      1      1           0        0.500     89

     And the winner is...

I'm seeing essentially no bearish signs tonight.  Now I almost hate to say it because it would end the one up/one down pattern, but it sure looks like the logical call is for Tuesday higher.  I feel like I'm going way out on a limb saying it, but sometimes that's a good thing.

ES Fantasy Trader

 Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight we stand aside yet again because even though everything is looking bullish, I can't shake off that one day wonder thing we've got going.

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1544.83.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

I was patting myself on the back when the Dow tanked right out the gate on Friday morning because I had called the close lower - and then spent the rest of the day second-guessing myself as the market clawed back from a triple digit decline to finish just 41 points down.  I find that sort of resilience most interesting and worthy of further investigation.  And so without further ado, we investigate further.  Bring on the charts!

The technicals (daily)

The Dow: On Friday the Dow put in a classic hammer but it doesn't mean much as it's not coming at the end of a trend.  What we have here is more sideways movement but that has caused an exit to the rising RTC, so we now have a bearish trigger for the Dow.  Increased volume and indicators declining off overbought support this notion.  So this chart looks bearish tonight.

VIX, daily

The VIX:  The numbers don't really tell the full story here.  The VIX gained 0.22% on Friday but just look at how it did it.  Note on this chart the giant red marubozu, the biggest since March 4th, forming this time the mother of all dark cloud covers.  And note how the VIX gapped up at the open, right to its 200 day MA of 15.63 on the dot.  That's also way above its upper BB at 14.85.  That now makes three days running that the VIX has touched its upper BB.  And while the indicators have not yet reached overbought, I'd be quite surprised to see the VIX move higher from here on Monday.


Market index futures: Tonight all three futures are higher at 1:14 AM EDT with ES up by 0.10%.  On Friday ES gave us a hammer but remained in its descending RTC.  However, the small overnight gains so far are enough to swing the indicators back to rising mode and the stochastic is very close to forming a bullish crossover.  So Friday's decline seems to have wrung a lot of bearishness out of this chart.  And while it's a bit premature to call it higher on Monday, the stage is at least set for that.

ES daily pivot: Tonight the pivot drops from 1552.67  to 1544.83.   That, combined with the slight gain in ES has now pushed us above the new pivot, a bullish sign.

Dollar index: And another hammer on this chart too.  This time, its tail.just tickled its lower BB before rebounding.  There's no RTC for guidance here but the stochastic appears to be gearing up for a bullish crossover in a day or two.  This pattern requires confirmation, but I'd say the dollar at least has a shot at moving higher from here.

Euro: And in the "what was I thinking" department, I blew this one badly last Thursday night.  The euro did not decline on Friday, instead it posted a second day of healthy gains - so healthy in fact that they drove RSI to officially overbought. And I'll note that it's been all downhill since early Friday afternoon, with the Sunday overnight already down 0.22%.  So there are at least some signs that the euro may move lower on Monday and that would correlate with my guess of the dollar moving higher.

Transportation: In one of the largest divergences I've seen in a while, the trans gained 0.46% on Friday when the Dow was down 0.28%.  And while the trans put in a similar-looking candle to the Dow, this one was a clear hammer.  In addition, it closed just outside the declining RTC for a bullish setup.  And the stochastic completed a bullish crossover.  And RTC went oversold and momentum bottomed and is now rising.  Those all point to continued higher for the trans on Monday.


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      1      1      1           0        0.500     41

     And the winner is...

Call me crazy, but with copper seemingly finding support, the TLT putting in a huge gap-up evening star, the trans outperforming, the VIX readying a move lower, no major economic news on Monday to potentially torpedo the market, ES back above its pivot and showing no sign of wanting to follow through Friday's decline, I'm going to vote for a close of Monday higher, despite the currencies and the fact that Monday is historically weak.  That's all she wrote.

ES Fantasy Trader

 Portfolio stats: the account remains at $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight we stand aside yet again because this isn't really quite the setup I'm looking for.  It might be by tomorrow night.