Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1647.25.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well we finally did close lower on Thursday but it wasn't nearly as bad as I had been thinking it would be last night.  After a big dump out the gate, the buyers reappeared and retraced all those losses as the day wore on, with a late-afternoon mini-dip finally putting us marginally back into the red.  So two interesting candles in a row.  What does this bode for Friday?  Let's figure it out.

The technicals (daily)

The Dow: The Dow showed surprising resilience in bouncing back from its morning lows on Thursday.  The net result was a tall spindly long-legged doji that in itself considerably diminishes the ongoing case for the bears.  We did, however, close outside the long-running rising RTC, just barely, so that's a bearish setup.  The indicators are also looking bearish now, having finally come off their extreme overbought positions.  But Friday will tell the tale and we do need to see that confirmation of both the doji and the RTC before making any further assumptions on market direction.

The VIX:  Last night I wrote "I'm guessing now that the VIX has no more than one up day left".  ANd the VIX delivered just that, starting the day with a huge gap up, skipping its upper BB entirely and continuing right to its 200 day MA -  and then bouncing right back off again like the sledgehammer gong at the country fair.  The end result was an odd red marubozu suspended in space between the 200 MA and the upper BB entirely above Wednesday's action.  It also drove the VIX overbought and moved the stochastic into position for a bearish crossover.  It also formed a definite exponential run-up over the past four days and we know how those always end - lower.  So all the signs are in place for a lower VIX on Friday.

Market index futures: Tonight all three futures are lower at 1:14 AM EDT with ES down by 0.17%.  Wednesday provided us with a classic hammer but also a bearish RTC exit, officially ending the uptrend.  In fact, I'm starting a new descending RTC right here.  With the continued negative follow-through in the overnight and indicators continuing to fall towards oversold, this chart continues to look bearish for Friday.

ES daily pivot: Tonight the pivot dives from 1662.58  to 1647.25.  Interesting action tonight.  The sharply lower pivot allowed ES to move above it at midnight.  Then ES took a quick dump below the new number but then just as quickly pushed back up again.  As I write, ES appears to be threading about the pivot, not quite sure which direction to go.  So until it decides, there's no predictive power here.

Dollar index: I was looking for a higher dollar on Thursday but it was not to be, with Thursday's real body trading entirely below Wednesday's for a big 0.78% loss on a fat little red spinning top.  With this sort of choppy indeterminate action, there's no point in trying to make a call, so I won't.

Euro: The euro meanwhile is acting a little better behaved, regaining all of Wednesday's losses and then some on Thursday to close at 1.2933.  That's a bit better than the plain sideways I'd been looking for, and with the overnight hanging around the upper end of that candle, plus rising indicators, further gains on Friday are possible.

Transportation: Once again we find the trans diverging from the Dow, ending Thursday up 0.21% to the Dow's 0.08% loss.  The candle is also a classic hammer on increased volume.  The indicators are now halfway back to oversold but momentum has actually turned higher already.  So this chart looks set to move higher on Friday.

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

 14  4/1        38         38        +      x   1569   9/14

 15  4/8        32         50        -      -   1553   9/15

 16  4/15       33         50        +      -   1589   10/16   9/16

 17  4/22       19         63        -      -   1555   10/17   9/17

 18  4/29       33         58        -      -   1582 

 19  5/6        50         31        +      +   1614 

 20  5/13       37         37        +      x   1634

 21  5/20       50         25        +      +   1667 

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 both the majority and I voted bearish four weeks ago, so we were both wrong.   Therefore we  continue the year with an accuracy of 10  for 17, or 57%.   The poll as a whole meanwhile  drops to 9  for 17 or 53%.

This week we see that after sitting on the fence last week, the majority decided to join me and vote bullish once again by a considerable margin.  Only two other times this year has bullish sentiment been greater.  I voted bullish once again because I'm still not seeing any meaningful trend changes on either the SPX weekly or monthly 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        2      4      6           4        0.600    -17

     And the winner is...

Here's the thing.  We have the Dow looking not too bad, the VIX looking good (as in ready to move lower, implying good for stocks), ES looking weak, the trans looking strong and the currencies doing their own thing.  And also Friday is the last trading day before Memorial Day.  As usual, lots of people will be leaving early for the long weekend, so we can look for some twists and turns on light volume.  So this one is just plain too tough to call, ergo Friday uncertain.

Happy Memorial Day to all.  Reminder - I'm taking some time off next week though I do expect to post at least Monday night for Tuesday's session.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again with another "uncertain" call.

Thursday lower

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

• Thursday lower, medium confidence.
  
• ES pivot 1662.58.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night's call was "uncertain".. And talk about uncertain - first we were up triple digits, then we were down, then we were up again, and finally the Dow closed off 80 points, mostly courtesy of Uncle Ben.  At least Wednesday wasn't the same old same old.  So let's see how this yo-you day changed the charts as we plot our course towards Thursday.  Steady as she goes...

The technicals (daily)

The Dow: When all the dust had cleared, the Dow finished Wednesday with a giant inverted hammer, the most bearish looking candle I've seen in two months.  But even that wasn't enough to drop us out of the rising RTC though we're now flirting with the edge.  I'll note again that it's been over a month since the Dow put in more than one down day in a row but from the looks of it right now, Thursday may make two.

The VIX:  Last night I wrote "I think this one's looking higher on Wednesday." and almost like I knew what I was talking about, the VIX rose 3.37% on Wednesday on an interesting spinning top that poked through its upper BB before falling back  a bit.  This also drove the indicators overbought for the first time since April 16th and took the stochastic back to levels from which bearish crossover form.  So I'm guessing now that the VIX has no more than one up day left, if that.

Market index futures: Tonight all three futures are lower at 1:32 AM EDT with ES down by 0.51%.  This is the first night in quite some time that the futures have not been basically flat at this hour of the night, and ES is down substantially.  Wednesday's candle just barely squeaked out a bearish RTC setup and the overnight follow-through is providing the bearish trigger.  We also got a bearish stochastic crossover so it looks like this uptrend is finito.  This chart is looking quite bearish - down technically but not enough to make it look due for a quick snap back.

ES daily pivot: Tonight the pivot drops from 1666.25  to 1662.58.  After crashing through the pivot at 2 PM Wednesday, ES has been unable to reclaim it and is now even further below the new pivot - not a good sign at all.

Dollar index: Uncle Ben also torpedoed my call for the dollar, which jumped 0.60% on Wednesday to close at its highest level since last July.  This move canceled the bearish RTC trigger and sent the stochastic curving back around for a bullish crossover from a high level - generally a good sign of higher to come for a day or two.

Euro: After a brief scouting patrol above its 200 day MA on Wednesday, the euro finally decided it was having none of it and sank right back to 1.2844, giving up all its gains of the past two days.  It's still technically a bullish RTC exit but as they say in Scotland, "Iy ha' me doots".  Bottom line, it looks like the sideways action in the euro will continue for a while longer, with support around 1.2835 and resistance at 1.2910.

Transportation: Last night I wrote "the momentum is clearly fading.  If the trans are going to stay alive, Wednesday is do or die."  Well, it was pretty clearly "die" as the trans tumbled 1.58% tripling the Dow's 0.52% loss.  This tall red candle dropped us clear out of the rising RTC for a bearish trigger, formed a bearish stochastic crossover and sent all the indicators headed south.  A DCB on Thursday is not out of the question, but this one's looking ugly, folks.


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        1      4      6           4        0.556    -30

     And the winner is...

Tonight I'm afraid I've got to hand it to the bears.  If Mr. Market manages to laugh this one off, I'll be quite surprised.  I'm seeing a bunch of reversal signs that I've not seen in a while now, so I'm just going to cut to the chase and call Thursday lower.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside because I'm afraid we missed the boat.  The time to go short was Wednesday afternoon.  With ES down already half a percent since the close, I think most of the downside has already occurred.  There's nothing worse than calling the close lower and being right, but going short and losing money anyway.  It's all about timing.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1666.25.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Open wide, Seymour!

Holy moly, I feel like I got run over by a truck with that whole wisdom tooth business yesterday.  It's the first time I've ever had that done and I sure hope it's the last.  In the meantime, nothing much seems to have changed in Marketland with the Dow up yet another 52 points as the CNBC talking heads were all over the fact that we're now up 19 Tuesdays in a row.  Today's advance was propelled by more Fed guys (how many of them are there anyway?) this time talking about how maybe things aren't all that great after all.  Now that I'm feeling a little better we march on to Wednesday.  Will this rally never end?  Let's figure it out.


The technicals (daily)

The Dow: We've had three strong rising RTC's this year and the Dow is now well into the third one.  this one began April 22nd and has a strong Pearson's of 0.957.  And we're still tracking it right up the middle.  So as the upper BB continues to rise away, I see no reversal signs on this chart.  The only pattern is that lately we've been getting one up day followed by one doji day, but that's not really much to go on.

The VIX:  On Tuesday the VIX put in a bullish one white solider pattern with a 2.69% gain for our highest close since May 2nd.  It also (finally) retraced 50% of the downside gap created on May 3rd, broke out above its recent consolidation top of 13.25-ish and turned the indicators back northward.  So I think this one's looking higher on Wednesday.

Market index futures: Tonight all three futures are higher at 1:20 AM EDT with ES up by 0.06%.  We've now seen a pair of spinning tops on the ES daily, but all reversal signs have been notoriously unreliable this year so far.  We also remain firmly inside a rising RTC and with ES drifting higher in the overnight, it doesn't seem to be heralding any imminent correction.  With the recent pattern of big up days followed by two or three days sideways, Wednesday could be yet another spinning top.

ES daily pivot: Tonight the pivot inches up from 1665.00  to 1666.25.  With ES just meandering in the overnight, we broke under the new pivot at midnight, but ES has just punched back through as I write this, and that's always a bullish sign.

Dollar index: Sunday night (recall that Monday was pretty much a lost day for me) I didn't want to believe the clear bearish evening star the dollar was showing.  Too bad too, because it fell sharply on Monday and then put in a second red candle on Tuesday, though sitting a bit higher for a 0.13% gain.  Still, this chart now looks decidedly bearish.  We have a completed bearish stochastic crossover and a bearish RTC trigger.  Taken together, these are usually good predictors of a move lower.

Euro: And the euro on Tuesday gave us a complementary bullish RTC trigger with a second consecutive up day.  And the overnight is up again, and the indicators are coming off oversold.  So I'd say the euro's looking higher on Wednesday which squares with my call for a lower dollar.

Transportation: After a stellar run, the trans have underperformed the Dow for two days running now.  Tuesday's doji left us on the edge of the latest rising RTC too.  So we're technically still in an uptrend but the momentum is clearly fading.  If the trans are going to stay alive, Wednesday is do or die.  But we've seen this movie before - I'm going to need some confirmation before I believe we're going seriously 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      5      7      5           2        0.500    121 
April      7      5      5           3        0.667    328
May        1      4      5           4        0.556    -30

     And the winner is...

Unlike Sunday night (and who knows what happened to Monday night) we're finally seeing a few bearish signs but nothing too convincing.  But it's all moot because Wednesday's going to be a big day, news-wise  We've got Uncle Ben talking, home sale numbers, and Fed minutes.  Any one of these could jerk the market around.  So since Wednesday will be news-driven,  can only call the close as uncertain.  My guess is that we won't see any big moves either way.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside with yet another "uncertain" call.

Tuesday - no call

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

• Tuesday no call.
  
• ES pivot 1665.00.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Canceled

One of my rules is to never commit TWI - that's Trading WHile Ill, and the Night Owl had a wisdom tooth extracted today and is not feeling very good at all tonight.  So here's as far as I got.  Hopefeully, we'll be feeling better tomorrow.

Recap

Well Monday was looking pretty good for my call for a higher close until some other Fed guy (this time from Chicago I think) opened his mouth.  And just like last week when that SF guy felt the need to publicize his existence, down we went.  The damage was limited to a 19 point dip in the Dow but it still counts as a miss.  Nevertheless, the ESFT managed to pull out a win.  So onward to Tuesday.

The technicals (daily)

The Dow:

The VIX:  The VIX took a big jump, relatively speaking on Monday, up 4.58% to go from below its recent trading range to just above.  This had the effect of starting to look like a bearish megaphone pattern as we alternate between lower lows and higher highs.  This alone makes me think that the VIX is likely to fall in the next day or two.

Market index futures: 

ES daily pivot: Tonight the pivot inches up from 1659.00  to 1665.00.

Dollar index: .

Euro:

Transportation:


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        1      4      5           4        0.556    -30

     And the winner is...

no call

ES Fantasy Trader


Well I guess it paid to have the courage of mty convictions last night as our long play netted a nice 5 1/4 points, and we left very little lying on the table befre ES headed back down.

Portfolio stats: the account now rises to $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we

SLD    10    false    ES    JUN13 Futures     1668.75    USD    GLOBEX    11:41:47   
BOT    10    false    ES    JUN13 Futures     1,663.500    USD    GLOBEX    01:35:01

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1659.00.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader going long at 1663.50.

Vacation note

The Night Owl is flying down to her southern next next week so I expect that I will be skipping publication of the blog for a few days while I get all my files transferred and computers updated down there.  Anyway, it's Memorial Day week then so it won't be a bad time to take a bit of vacation.

Recap

Once again I was surprised on Friday by how robust the recent advance has been.  I was too skeptical to back this horse and as a result got left in the dust of a 121 point gain and another record close for the Dow.  Now with the uncertainty of op-ex week behind us, let's get down to business for Monday and see what's cooking on the grill.

The technicals (daily)

The Dow: Friday's move brought the Dow right back to the left edge of its rising RTC, keeping the trend very much alive.  The indicators remain useless and the upper BB is now at 15,404, and the weekly chart looks even stronger so I'd say there's still room to run here on Monday.

The VIX:  After spending a week unsuccessfully trying to climb above 13.5 and getting smacked back every time, the VIX finally gave up on Friday and dropped 4.74% to fall out of its recent trading range.  Our close at 2.45 also made the indicators peak and brought us to within inches of a bearish stochastic crossover.  With the lower BB still at 12.06 (which is also the next support line), the VIX still has room to run lower on Monday.

Market index futures: Tonight the futures are mixed at 1:23 AM EDT with both ES and YM up by 0.02% but NQ down 0.03%.  So it's another basically flat night.  Like the Dow, ES on Friday broke through resistance and closed on the left edge of its rising RTC.  With an upper BB now at 1675, there's more room to run here too

ES daily pivot: Tonight the pivot advances from 1650.92  to 1659.00 .  We spent all of Friday above the old number and even with this gain remain above the new pivot, so this indicator is bullish.

Dollar index: Wow - the dollar is going like gang busters.  Every time I predicted a reversal last week I was wrong.  And on Friday the dollar gapped up for the third time in the last five to close just above its upper BB.  The indicators are broken here too and I'm not going to call it lower until I see it fall out of the steeply rising RTC it's in now.

Euro: And as the dollar rose, so the euro fell, down to 1.2831 on Friday as it continues to track down its lower BB.  Last Thursday night I wrote "I'd expect to see it hit support at 1.2783 sometime next week.  I  really see no strength here." and that remains true tonight.  Although the euro is actually up 0.16% in the overnight so far, it remains in its descending RTC and I don't think the sell-off is over, though it's closer to the end than the beginning.

Transportation: The trans continue to outperform the Dow, gaining an impressive 1.26% on Friday to the Dow's 0.80%.  But like the Dow, the indicators are broken and we're still under the upper BB.  Friday's move also continued the pattern of one-off down days recently.  So there's nothing really bearish on this chart 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      7      5      5           3        0.667    328
May        1      3      5           4        0.625    -16

     And the winner is...

With no bearish reversal signs on the daily charts, good support on the weekly charts, the TLT's ill-fated rally attempt last week cut short, copper looking about ready to put in a bottom, and no major economic news coming out to torpedo the markets, the logical call is for Monday higher.

ES Fantasy Trader

Portfolio stats: the account remains at $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we go long at 1663.50.  Although it makes me a bit nervous to hop on a moving bus, given the current picture I think I've about run out of excuses not to.