Friday higher

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

• Friday higher, medium confidence.
  
• ES pivot 1636.42.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Interesting trace of ES last night.  Around 2 AM it decided to move above the pivot.  Then it made an attempt to dive under just before the open but that was quickly rebuffed and then we did indeed close higher, confirming my conditional call.  Now on to Friday, potentially perplexing because we're ending the week and the month, and next week is holiday-shortened.  But the chartsd will see us through as always.

Note: this stupid Blogspot spell checker is on strike again tonight so I apologize in advance for any typos I missed.

The technicals (daily)

The Dow: After a impressive start, the Dow kind of gave up some gains to finish with almost an inverted hammer.  It was enough to just bring us off oversold but we remain inside the descending RTC so we need to be a bit cautious here, Friday-wise.

The VIX:  Thursday was one of those unusual days whe both the market and the VIX are up  But I wouldn't read too much into it because it was only up 1.94%.  More important, I think, is that it put in a big long-legged doji, the third doji in thre days in fact, and this one failed to touch the upper BB.  This has caused momentum to peak.  It also traded outside the rising RTC for a bearish trigger so I'd say the VIX goes lower on Friday.

Market index futures: Tonight all three futures are higher at 1:32 AM EDT with ES up by an impressive 0.47%.  ES now seems to have some positive momentum building after a decent up day Thursday.  The good follow-through in the overnight is forming a bullish stochastic crossover and moving the indicators higher so I'd say this one is looking bullish for Friday.

ES daily pivot: Tonight the pivot bumps up from 1632.08  to 1636.42.  But with ES on something of a tear in the overnight, we're now a good nine points above the new pivot, definitely a positive sign for Friday.

Dollar index: Another day, another doji.  The dollar just can't figure out where the heck it wants to go, and neither can I.  'Nuff said..

Euro: After two fairly large down days, the euro has found some supprot around 1.3240.    With oversold indicators ad the lower BB close at hand, I'd say further downside for the euro is now limited and I would expect to see a move higher either Friday or next Tuesday.

Transportation: Support around 6300 held on Thursday as the trans put in an inverted hammer for a 0.26% gain that confirmed Wednesday's doji.  Looks like more upside here on Friday.


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      2      6           2        0.867    718

     And the winner is...

After watching the charts turn incermentally more positive for the past two nights, I'm now seeing some definite bullish signs tongiht, enough so to simply call Friday higher.  That's all she wrote.  Happy Labor Day one and all.  See you again next Monday night.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside - this time because I feel like I missed the entry with ES having already posted a good size move this evening.

Thursday higher if ES above pivot

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

• Thursday higher only if ES stays above pivot, else lower..
  
• ES pivot 1636.67.  Direction of break is critical.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

I wasn't quite sure where we were headed on Wednesday but I refrained from calling the day lower on the basis of the late-nite futures action, despite otherwise gloomy-looking charts.  Good thing too, because the Dow posted a middling 48 point gain.  A DCB perhaps, but hey, a win is a win.  So as the dog days of August wind down, let's sniff out where Thursday is headed.  Arf arf.

The technicals (daily)

The Dow: The Dow managed to stem its two day decline on Wednesday, robbing the bears of their momentum and turning the indicator back upward, just coming off oversold.  Still, this isn't any reversal pattern I know of and we remain inside a descending RTC, so this chart remains bearish.

The VIX:  On Wednesday we got the confirmation I was looking for last night.  While the VIX declined only 1.67%, it did it on a big bearish engulfing pattern that spanned the upper BB but closed below it and in fact traded entirely outside the rising RTC for a bearish setup.  So I'd say the VIX is ready to move lower again Thursday.

Market index futures: Tonight the futures are mixed at 1:51 AM EDT with ES dead flat but YM up 0.04% and NQ up 0.14%.  On Wednesday, ES put in a DCB but it at least demonstrated that the market is finding some footing here.  The meandering drift higher in the overnight so far is encouraging too so this chart is now looking a bit more positive than last night.

ES daily pivot: Tonight the pivot dips from 1636.67  to 1632.08.  As I write, ES is threading about the new pivot, trying to find direction.  This definitely puts the pivot in play and at the moment it's too close to call.

Dollar index: A long-legged doji for the dollar on Wednesday reflects the continuing indecision here - there's no telling where this one's going on Thursday..

Euro: The euro has been similarly undecided, alternating between gains and losses for five days now, Wednesday's drop taking it back to 1.3339.  And the overnight is continuing lower, down another 0.16% so far.  With the bearish RTC exit complete, I'd say the euro still has lower to go.

Transportation: The trans didn't quite match the Dow's advance on Wednesday, losing 0.10% on a small doji sitting at the bottom of Tuesday's marubozu.  But this suggests a reversal is possible, though we should wait a day for confirmation.


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      2      6           1        0.857    718

     And the winner is...

Well if all those hot-heads in the middle East can manage to stave off Armageddon one more day, it looks like we might have a chance to see a bit more upside on Thursday.  The charts are looking a bit more encouraging tonight than last night but with all the headline risk about in the world right now, we're faced with a difficult task.  So I'm going to make a conditional call: if ES finally decides to break above the pivot by mid-morning, we'll close Thursday higher.  However, if we make a definitive break lower, then we close lower.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside - while I again think we're going higher from here, I'm not sure how long this will last.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1636.67.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

The debt ceiling, the latest Syrian crisis, the phase of the moon, whatever, all this "news" just gives me a pain.  That's why I like technical analysis.  I told you all last night the market was going lower on Tuesday without consulting any of that booshwa.  And it did, with the Dow taking a 170 point dump.  So there!  Now let's see where Wednesday is headed.

The technicals (daily)

The Dow: Tuesday's big red marubozu was enough to derail the indicators and send them lower even though they were still oversold - that's pretty unusual.  It also just formed a bearish stochastic crossover at a low level, also unusual.  And it keeps us firmly inside a descending RTC.  Next support is at 14,670, not too far away.  Then note that the 200 day MA is finally coming into view, now at 14,404 - just three more days like Tuesday and we're there.  So this chart continues to look bearish tonight.

The VIX:  Last night I wrote "we could see a higher VIX again Tuesday" and we did, this time up nearly 12% on a big gap-up evening star.  However, unlike last week's evening star this time we're not yet overbought and in fact just completed a bullish stochastic crossover.  We did close above the upper BB though and like I always say, the VIX rarely spends more than a day or two at those levels before falling.  But VVIX is looking even more bullish so I hesitate to call the VIX lower on the basis of an incomplete chart pattern.  I'm afraid we need one more day here for confirmation.

Market index futures: Tonight all three futures are a just bit lower at 12:55 AM EDT with ES and YM both down 0.02%, and NQ down 0.03%   On Tuesday, ES broke support at 1635 with a tall red marubozu to end at session lows just touching its lower BB  and completing a bearish stochastic crossover.  So although the downward momentum seems to have petered out at the moment, the night is yet young and this chart overall remains bearish.

ES daily pivot: Tonight the pivot plunges from 1658.33  to 1636.67.  We were so far below the old number that even with ES flat in the overnight, we're still below the new pivot by  a good nine points so this one remains bearish once again.

Dollar index: The dollar is now in a mini-downtrend within a longer-term downtrend.  With a 0.30% loss on Wednesday on a bearish engulfing candle that formed a bearish stochastic crossover, more downside seems possible for Wednesday.

Euro: The triangle I wrote about last night kind of fell apart on Wednesday as the euro simply put in a hanging man type doji for a small gain.  The overnight is wandering erratically so I won't hazard a guess as to where this currency is headed on Wednesday.. 

Transportation: The trans took a big hit on Tuesday, down 2.59% on a tall red marubozu that crashed out of their rising RTC for a bearish setup, confirmed Monday's gravestone doji, sent the indicators moving lower off overbought, broke support at 6331, and completed a bearish stochastic crossover.  So this one continues to look nothing but negative for Wednesday.


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      2      5           1        0.857    718

     And the winner is...

Wednesday was pretty much a confirming day of Tuesday's sea change and it established some degree of momentum to the downside.  That said, the SPX Hi-Lo index has not come off 100 and the AD line has now declined close to levels from which reversals occur.  And Wednesday for some reason is also historically quite bullish.  The charts show that there is still plainly at least some room to run lower and I'm not seeing any real bullish reversal signs yet, but if you look at the hourly chart of ES, you'll see that it seems to have found some support right at 1627, and it is in fact now on something of a mini-rally, going from down 0.03% to up 0.18% in the time it took me to write this post.

And I never like going against the futures, particularly when they start to diverge from the other technicals.  This raises the possibility of a DCB or a doji on Wednesday.  Therefore, unfortunately the only logical call is Wednesday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside - while I again think we're going higher from here, I'm not sure how long this will last.

Tuesday lower

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

• Tuesday lower, low confidence.
  
• ES pivot 1658.33..  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well we had a decent rally going on Monday as I had expected.  What I didn't expect was John Kerry opening his mouth to announce that the Syrian government is bad, very bad.  Why the fact that two groups of people (both of which hate the US) are busy killing each other, should drive the Dow down 64 points is beyond me but then that's Mr. Market for you.  In any case, good luck getting The Empty Suit to do anything productive about this admittedly intractable problem.  So let's move on to something far easier, namely figuring out which way the market's going on Tuesday.

The technicals (daily)

The Dow: Monday was one of those days where headline risk trumped the technicals.  In any case, the resulting candle doesn't look too good taking as it did the wind out of the sails of a developing rally.  The pattern now looks like a cross between a one black crow and a bearish ladder.  Either way, this chart isn't looking too healthy.

The VIX:  On Monday the VIX broke right back up through its 200 day MA, just one day after falling below it to gain 7.22%.  Friday's RTC bearish RTC exit didn't work this time (thanks, John).  With VVIX up on Monday too, we could see a higher VIX again Tuesday.

Market index futures: Tonight all three futures are lower at 1:24 AM EDT with ES down by 0.24%.  Monday ended up with a bearish one black crow and the pin action in the overnight continues lower, leaving this chart suddenly bearish.

ES daily pivot: Tonight the pivot barely moves from 1658.25  to 1658.33.  After breaking below on Monday afternoon, we remain below the new pivot and if anything are sinking lower so this data point is clearly bearish now.

Dollar index: After a small doji on Monday the dollar seems bent on continuing its random ways.  Once again, I have no clue where this one is going.  A trend would be nice to see here..

Euro: At least my euro guess was right as it did decline a bit on Monday with a red spinning top.  We're also forming something of a symmetrical triangle here, and since it seems to be near resolution, I'd be expecting a move higher here as early as Tuesday.

Transportation: After a dragonfly doji on Friday, we got the mirror image on Monday - a gravestone doji, and with the indicators now getting pretty overbought, this one is looking more serious.  Though we remain in a rising RTC, a move lower looks likely on Tuesday

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    9/13

 14  4/1        38         38        +      x   1569   9/14    9/13

 15  4/8        32         50        -      -   1553   9/15    9/14

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

 17  4/22       19         63        -      -   1555   10/17   9/16

 18  4/29       33         58        -      -   1582   10/18   9/17

 19  5/6        50         31        +      +   1614   11/19  10/18

 20  5/13       37         37        +      x   1634   12/20  10/18

 21  5/20       50         25        +      +   1667   12/21  10/19

 22  5/28       37         33        +      +   1650   12/22  10/20

 23  6/3        29         38        -      -   1631   13/23  11/21

 24  6/10       38         38        +      x   1643   13/24  11/21

 25  6/17       32         40        +      -   1627   14/25  11/22

 26  6/24       13         46        -      -   1592   14/26  11/23

 27  7/1        25         42        -      -   1606   14/27  11/24

 28  7/8        42         29        +      +   1632   15/28  12/25

 29  7/15       48         22        +      +   1680   16/29  13/26

 30  7/22       42         19        +      +   1692   16/30  13/27

 31  7/29       39         17        +      +   1692   16/31  13/28

 32  8/5        46         27        +      +   1710 

 33  8/12       32         41        -      -   1691

 34  8/19       23         54        -      -   1656

 35  8/26       23         50        -      -   1664 

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 I and the majority of the poll voted bullish four weeks ago, so once again we were both wrong.  Therefore we continue the year with an accuracy of 16  for 31, or 52%.   The poll as a whole drops to 13 for 28 or 46%.

This week we find that not much has changed since last week.  Bullish sentiment remains unchanged and bearish sentiment dropped just four points.  Once again I remained in the bear camp this week based on some negative looking weekly and monthly candles on the SPX chart.


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    10      2      5           1        0.845    548


     And the winner is...

Last night I called Monday higher partly on the absence of any bearish signs.  Well tonight I'm seeing those signs, so the logical call now becomes Tuesday lower.  Unless the Syrians suddenly decide to kiss and make up.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside - while I again think we're going higher from here, I'm not sure how long this will last.

Monday higher

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

• Mmday higher, low confidence.
  
• ES pivot 1658.25..  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Woof woof - the dog days of August bark on as the Dow finished up an unimpressive 47 points on Friday.  Nevertheless it was a win, and we'll take it.  But  subjective impressions are just that.  We now dive into the objective technicals to determine the direction Monday may go.

The technicals (daily)

The Dow: It wasn't much of a gain, but it was a gap-up Friday on a hanging man style candle.  However, the indicators remain considerably oversold and while we remain inside a fairly long-running descending RTC, the preponderance of evidence here now leans towards the bullish for Monday.  If we can get just 20 more points that would be enough to give us a bullish RTC setup.

The VIX:  Last Thursday night I wrote "I'm looking for more downside on Friday" and that's just what we got with the VIX down another 5.28% on a gap-down inverted hammer that just sliced right back under the 200 day MA and marked the payoff of the preceding evening star pattern.  But while the indicators have come down a bit, they're still overbought and the bearish stochastic crossover is still playing out.  With a modicum of support around 13.61, I'd say there's probably at least that much more downside to go here on Monday.

Market index futures: Tonight all three futures are higher at 1:00 AM EDT with ES up by a respectable 0.23%.  Friday's green candle gave us a bullish RTC trigger and though not large was impressive nonetheless considering the size of Thursday's gains.  The bullish pin action in the Sunday overnight is forming a three white soldiers pattern and with indicators just coming out of oversold and moving higher, I'd say this chart continues to look bullish.

ES daily pivot: Tonight the pivot steps up from 1648.00  to 1658.25.  The move up in the Sunday overnight has helped keep us comfortably above the new pivot, so this measure remains bullish tonight.

Dollar index: The dollar fooled me on Friday by dropping 0.17% on a move that for once was not a gap down.  Given that the indicators are in no-man's land between oversold and overbought and the fact that there's no RTC here, I freely admit I have no clue where this chart is going on Monday..

Euro: And of course I got the euro wrong on Friday too when it put in a long spinning top to just barely remain inside its rising RTC.  The Sunday overnight is down just a tad but with the indicators appearing to have topped just at overbought, my guess is that we could go lower form here, but that's just a guess.

Transportation: On Friday the trans gained 0.11% on a dragonfly doji marking some indecision, or just plain resting after Thursday's big run-up.  Since the indicators are only about halfway to overbought and we are now in a new rising RTC, I'd expect further gains 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      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    10      1      5           1        0.917    612
 
     And the winner is...

We do seem to have developed some positive momentum of the past couple of days and that has helped turn the charts bullish.  Not blazingly so mind you, but enough that in the absence of any truly bearish signs, logic dictates a call of Monday higher.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside - while I again think we're going higher from here, I'm not sure how long this will last.