Friday uncertain

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

• Friday higher, low confidence.
  
• ES pivot 1719.17.  Holding below is bearish.
• Next week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1695.50.

Recap

The market was unable on Thursday to push further into record territory, instead spending most of the day just slowly dribbling lower and taking my prediction along with it.  Not much excitement compared to Wednesday, that's for sure.  So let's move on to yet another Friday as the treacherous month of September rolls on.

The technicals (daily)

The Dow: The Dow's lackluster 40 point down candle on Wednesday doesn't do much for me.  It's not really a dark cloud cover or any sort of doji, and it's still well inside the rising RTC.  Just two things here: the indicators have started to come alive again, moving off extreme overbought, and we now have a new resistance line at 15,693.  So while it looks like we might be in for a pause, it looked that way on the 12th too, and that didn't work out.  The current environment is quite similar.

The VIX:  I figured the VIX could go lower on Thursday but I was surprised at a 3.16% gap down.  And of course it's unusual for the VIX to fall at the same time as the markets.  So we now have an inverted hammer but we've yet to touch the lower BB, which is now falling away, currently 12.81.  And there's also an unusual bearish stochastic crossover from a low level.  Those are often good for a day or two.  So my guess is that the VIX might just go lower again on Friday.

Market index futures: Tonight all three futures are lower at 1:23 AM EDT with ES down by 0.12%.  With a doji on Thursday, the overnight  peeling away from the upper BB and guiding lower, and the indicators beginning to move off extreme overbought, this chart is now looking bearish.

ES daily pivot: Tonight the pivot jumps again from 17111.42  to 1719.17.  But that move let ES cross under the new pivot at midnight, so this one is now bearish.

Dollar index: Small DCB here on Thursday, good for 0.14%.  The trend remains lower but we could be seeing a reversal next week..

Euro: The euro continued higher on Thursday, climbing the upper BB.  The overnight candle is up another 0.03% and that leaves it just outside the rising RTC for a bearish setup.  This suggests a possible move lower on Friday for the euro.

Transportation: Interesting divergence here as we gained 0.31% to the Dow's 0.26% loss on Thursday.  This is particularly impressive coming on the heels of Wednesday's big move.  So this one continues to look 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      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  5      3      2           1        0.667    239

     And the winner is...

Tonight the charts are looking pretty uniformly bearish.  However, Friday is a quadruple witching day, and the Dow is up eight in a row and nine of the last 10 according to The Stock Trader's Almanac.  That is pretty good odds.  So faced with this sort of contradiction, the only reasonable call is for Friday uncertain.  See you again Sunday 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 remain short at 1695.50.  

Thursday higher

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

• Thursday higher, low confidence.
  
• ES pivot 1711.42.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1695.50.

Recap

Wow - I'm sure glad I called Wednesday as "uncertain" because I never expected that Uncle Ben was going to take the long-awaited taper, that has been the number one topic of conversation since May, off the table.  Not that I'm complaining mind you, as my account which is heavy on REIT's had its best day in months, up two and a quarter percent.  But it could easily have gone the other way - there's a thin line between hero and zero on the Street.  So how does this change the picture?  Let's warm up the iron to attack this latest wrinkle in the charts.

The technicals (daily)

The Dow: After some indecision on Tuesday, the Dow had a Fed-fueled shot of nitrous that left the bears in the dust with a 147 point rocket ship for a new record close.  That keeps the rising RTC strongly in place and puts all the indicators out of commission, pegged at overbought.  With a chart like this, there really isn't anything bearish to say about it.

The VIX:  The VIX made a feeble attempt to get past its 200 day MA on Wednesday until the Fed put a big nail in that coffin and it sank 6.47% breaking support at 13.83 and killing a nascent rising RTC almost before it had a chance to get going.  But with the lower BB nearly touched, I think the downside is limited from here, though I'm not expecting a major advance on Thursday.

Market index futures: Tonight all three futures are higher at 1:02 AM EDT with ES up by 0.09%.  Es remains solidly inside a rising RTC back to September 3rd and the indicators are all useless, stuck on overbought like everywhere else.  And despite a close six points above the upper BB, we're continuing higher in the overnight.  I can't really call this chart lower for Thursday.

ES daily pivot: Tonight the pivot pops from 1695.25  to 1711.42.   And even with that move we remain above the new pivot, so that's bullish.

Dollar index: The dollar reacted strongly to the Fed on Wednesday, suffering its biggest loss in months, down 1.14% on a big reg marubozu that crashed through support at 55.20 and then the lower BB at 55.10 before finally stopping at 54.85.  This drove the indicators to extreme oversold levels (RSI is now nearly zero).  While a DCB is not out of the question, with o support til 54.44 now, it's not inconceivable that we could be headed there next.

Euro: And of course it was up, up and away for the euro on Wednesday with a big gain to  close above its upper BB at 1.3509 in a move that made last weeks rising RTC exit look like a fake-out.  The indicators are now broken at extreme overbought but there's nothing bearish above these candles.  And the overnight is continuing higher, up another 0.19% already so it's looking good for the euro on Thursday.

Transportation: The trans did even better than the Dow on Wednesday, up 1.54% to the Dow's 0.95% for their own record close.  That keeps their rising RTC intact and this chart remains quite 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      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  5      2      2           1        0.750    279

     And the winner is...

This is a tough one, as is any day when the market gets a big jolt, either positive or negative.  There's always a chance for a Fibonacci retracement on profit-taking.  But for the life of me, I just don't see that happening given the overall gestalt of these charts.  Therefore I just have to follow what I see and that is Thursday 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 remain short at 1695.50.  Well this is one of those times I'm glad this is just paper trading because this trade was effectively torpedoed by the Fed.  I guess we'll just hang on until some mean-reversion kicks in, as it must eventually.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1695.25.  Holding above is bullish.  Now following Z contract.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remaining short at 1695.50.

Recap

Hmmm - curious.  It was sure looking to me like Tuesday was going lower.  I don't know if this was a failure of technical analysis or just of my analysis.  At least one reader has suggested that there's a bunch of short covering going on.  Well that was then, this is now.  And tonight we're going to forgo the chart by chart rundown because I always call Fed days uncertain anyway.  But this particular Fed day is going to be watched especially closely as Mr. Market waits to see it we get the taper, the taper-lite, or the same old same old.

The technicals (daily)

Of course I still did look over the charts and I have to say they now look fairly bullish, with the one exception of the VIX which may be about to break over its 200 day MA.

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   16/32  13/29

 33  8/12       32         41        -      -   1691   17/33  14/30

 34  8/19       23         54        -      -   1656   17/34  14/31

 35  8/26       23         50        -      -   1664 

 36  9/3        21         54        -      -   1633

 37  9/9        35         30        +      +   1655

 38  9/16       40         28        +      +   1688

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 bearish four weeks ago, so this time we were both wrong.  Therefore we continue the year with an accuracy of 17  for 34, or 50%, back to coin-flipping.   The poll as a whole drops to 14 for 31 or 45% - it's been a tough year for the poll so far.

This week I remained with the majority in voting positive once again.  Bullish sentiment continues to rise for the third week in a row while bearish sentiment has been cut in half in the same time period.  As much as I can't ignore the fact that October is historically a dreadful month, so far I'm not seeing in on either the weekly or monthly SPX charts.  I guess we'll find out 30 days from now.

Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  5      2      1           1        0.750    279

     And the winner is...

There's no call tonight because I have no way to know what the Fed will announce and obviously that is what will move the markets.  So this is one of those times where you just put your feet up, grab a cold one, and do some spectating.  Bottom line - 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 remain short at 1695.50.  I knew it - I don't know what's wrong with me.  I feel like Charlie Brown with the football, and yet I still go after these shorts.  Well let's give it one more day - the market is still looking quite overbought and the current rally has been going on for quite a while already.

Tuesday lower

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

• Tuesday lower, low confidence.
  
• ES pivot 1701.08.  Holding below is bearish.  Switching to the Z contract on Tuesday.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader going short at 1695.50.

Recap

I just love it when Mr. Market throws me a lollypop.  Today's (lolly)pop in the Dow was obvious by the time I began last night's post.  Thanks, Larry!  Tonight though, it looks like we're back to the usual grind so let's round up the usual suspects.

The technicals (daily)

The Dow: Monday's big gain tightened the rising RTC and closed on the upper BB, forcing the indicators to extreme overbought levels (RSI now 93.6).  While the candles remain bullish, we did get a bearish stochastic crossover.  That, plus the BB hit, plus the fact that we stopped right at a resistance line makes me wonder if the Dow might not be doing a bit of retracing on Tuesday.

The VIX:  Most interesting - while the Dow had a big gain, the VIX was also up, by 1.55% on Monday.  That's quite rare.  In fact, the candle was a bullish engulfing pattern.  And while the 200 day MA still represents resistance, the indicators now seem to have bottomed at oversold.  And Friday's candle was a bullish RTC trigger so it's looking like the VIX is ready for further gains on Tuesday.  And VVIX has already hit its lower BB, supporting this idea.

Market index futures: Tonight all three futures are lower at 12:51 AM EDT with ES down by 0.13%.  This is perhaps the3 most telling chart of the night.  ES put in a big gap-up evening star on Monday that pushed right through the upper BB before closing right on it.  And the stochastic  has just formed a slow rounded bearish crossover.  So with indicators still very overbought, this chart is looking toppy tonight.

ES daily pivot: Tonight the pivot just leaps from 1686.50  to 1701.08   The drift lower in the overnight in ES was enough to run right into that wall and put us below the new pivot right at midnight, so this indicator now turns bearish.  On Tuesday with the U contract expiring soon, we will switch to the Z contract.

Dollar index: An unusual setup in the dollar on Monday.  It put i a tall green marubozu, but because it gapped down hard at the open, it was still a 0.23% loss on the day..  And that drove the indicators hard oversold (RSI now just 1.0) so I'd say the $ is getting ready to move higher on Tuesday.

Euro: The euro had the same unusual pattern as the dollar, in mirror image.  And this one dropped it out of its rising RTC for a bearish setup.  Indicators remain highly overbought we just got a bearish stochastic crossover and the overnight is following lower, so it's looking likely that the euro will close lower on Tuesday.

Transportation: Like the Dow, the trans hit their upper BB on Monday, breaking through resistance at 6587.  But unlike the Dow, they fell back to close off their highs.  We remain in a rising RTC and 6587 is now support but with indicators continuing overbought, there's something of a mixed picture here.  With the trans prone to quick one day reversals, Tuesday might be one such.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  5      1      1           1        0.857    314

     And the winner is...

Tonight the charts are all pretty much looking like they're ready to retrace at least some of Monday's big gains.  In fact I no longer see any of the bullish signs that were around last week so the logical call is for Tuesday lower.  I suspect some traders may be wanting to lock in Monday's gains ahead of the expected Fed taper announcement on Wednesday.

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 go short at 1695.50.  These counter-trend trades have been risky all year and have cost me dearly, so I'm not planning on holding this one for long, but I think it just might make us some money.

Monday higher

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

• Monday higher, medium confidence.
  
• ES pivot 1685.42.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well now that was interesting, wasn't it?  It sure looked to me anyway like we were headed lower on Friday.  But instead, the Dow gained 75 points, possibly on Syrian news about No-bomba.  Whatever, I'll just chalk this up to one of those days where technical analysis simply didn't work.  But TA is like playing blackjack in Vegas.  You can play a perfect Basic System and still get wiped out unless you can take the heat and are prepared to stay in the game for the long haul.  And the Night Owl is nothing if not a long-hauler.  So perhaps we'll have better luck on Monday - let's get right to it.

The technicals (daily)

Hmm, you know what, I think we're going to skip the chart-by-chart rundown tonight for several reasons, mostly having to do with news that came out over the weekend.  With the one-two combo of the Rooskie Syrian peace deal and Larry Summers taking a powder on the Fed, the futures are up over one percent in the overnight already.  This kind of makes an analysis of Friday's charts out of date, although they were pretty much starting to look bullish again anyway.  So let's just save some time and cut straight to the chase.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  4      1      1           1        0.833    195

     And the winner is...

Mr. Market got a double dose of good news over the weekend in the form of the Putin Present and the Summers Sayonara so it looks like he's ready to do some buying on Monday.  Therefore I am simply going to call Monday higher.  That's all she wrote.

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're standing aside because once again, the big move happened earlier in the evening.  Oh well.