Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1672.58.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains long at 1695.00.

Recap

Well not much new on Thursday - just more confusion out of Washington and no substance.  I'm not sure how much it's worth to even look at the charts tonight because the markets are now totally headline-driven, the way they were back during the Greek crisis (anyone remember the Greeks?)  Still, I suppose it can't hurt, and it keeps me off the streets, so let's go.

The technicals (daily)

The Dow: The Dow remains in a Washington-fueled downtrend now back to September 19th.  So nothing to see here.  Moving on ...

The VIX:  The VIX has now touched its upper BB for four straight days - that's pretty rare and makes me think it's due to come back any day now.  It did put in an inverted hammer reversal candle.  The action in VVIX was even more dramatic with an inverted hammer with a great big tall tail spiking way above its upper BB.  Technically, this is primed to move lower.  But all it will take to drive it higher again is one word from the Empty Suit about how he's prepared to "listen" but will not compromise.  Hey pal, if you're not compromising, what exactly is it you're listening to?  Old Bee Gees tunes?

Market index futures: Tonight all three futures are lower once again at 1:19 AM EDT with ES down by 0.10%.  ES took a big dump on Thursday and actually closed below its 40 day MA.  The continued negative follow-through in the overnight is forming a bearish stochastic crossover and there's no support until the lower BB at 1659 and  then 1656.  I think we may very well see one or both of those numbers on Friday.

ES daily pivot: Tonight the pivot drops again from 1682.67  to 1672.58.   We remain below the new pivot and widening the gap as I write, so this one continues looking negative.

Dollar index: Like the Dow, the dollar is locked in a descending RTC and with its lower BB falling away, this chart simply continues to look bearish..

Euro: Similarly, the euro continues to look higher, though it is approaching some resistance at 1.3671 and then its upper BB at 1.3690, so that may eventually put an end to this rally in a few days.

Transportation: The trans' abortive rally earlier this week collapsed on Thursday driving them right back into the descending RTC and moving the stochastic into position for a bearish crossover.  Nothing positive on this 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    11      3      6           2        0.813    687
September  8      3      3           3        0.800    485
October    0      0      2           1        1.000      0

     And the winner is...

All in all, the charts are looking pretty grim tonight.  Technically, they continue to look bearish.  But all it will take is an announcement from Washington that some sort of deal has been reached to set off a big relief rally.  With that sort of headline risk, there's no way I can commit to a call lower even though it sure looks like that's where we're headed.  Accordingly, I'm simply going to call Friday uncertain.  Se you again Sunday night.

ES Fantasy Trader

Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16  total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we remain long at 1695.00.

Thursday uncertain

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

• Thursday uncertain.
  
• ES pivot 1682.67.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains long at 1695.00.

Recap

ES dropped below its pivot shortly after I finished my post last night and that was the end of that.  By noon we were still under the pivot and so we closed lower on Wednesday by 59 points on the Dow.  So as the government shutdown rolls on and the sun still somehow manages to rise in the east every morning, let's see what Thursday might bring.

The technicals (daily)

The Dow: The Dow, which Monday gave us a bullish RTC trigger, put in a big bullish hammer on Wednesday.  With the previous trend now over, support continuing to kick in at 15,130, and indicators remaining oversold, this looks bullish to me.

The VIX:  Ah, that tricky VIX.  I thought it would move lower on Wednesday but instead it gained 6.82%.  But that touched its upper BB again and with a spinning top, overbought indicators and a now-completed bearish stochastic crossover, it all suggests that a move lower next is more likely.

Market index futures: Tonight all three futures are lower at 12:51 AM EDT with ES down by 0.12%.  My bullish expectations for this chart did not play out on Wednesday as the dark cloud cover that developed at this time last night remained in place putting the bullish RTC exit i jeopardy.  The indicators reflect this confusion, all Washington-inspired as ,momentum and money flow are moving lower while the stochastic is rising and RSI is flat.  But tonight's overnight candle is forming up as a bullish hammer, so we'll have to see.

ES daily pivot: Tonight the pivot drops from 1685.67  to 1682.67. After spending Wednesday below the old number we remain below the new pivot though by a lot less.  Still this indicator remains bearish.

Dollar index: After some consolidation lat week, the dollar has clearly resumed its march lower, losing another 0.33% on Wednesday not that that helped the markets any.  And that keeps it straight in a new descending RTC even as the indicators fall back to oversold.  Net net, this chart looks bearish again.

Euro: On Wednesday the euro had its best day ion a couple of weeks after looking too tough to call last night.  It broke through resistance at 1.3552 leaving just resistance at 1.3659 all the way back to January of this year.  Meanwhile, Wednesday's move establishes an admittedly weak rising RTC, as well as driving the indicator overbought.  But without a reversal candle, one can only call the euro higher again on Thursday.

Transportation: On Wednesday's the trans gave back a third of Tuesday's gains with a classic hanging man.  But indicators are only now just off oversold and Wednesday's candle was a bullish RTC trigger.  So we have to think there's more upside from here.


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  8      3      3           3        0.800    485
October    0      0      1           1        1.000      0

     And the winner is...

Tonight we have to balance the technicals with the news.  And the news on Wednesday is that the Empty Suit invited the leading clowns of the Clown Congress to his humble abode on Penn Silly Vain Ia Ave., presumably just to tell them that he wasn't interested in talking.  With the predictable (non) results.  It' beginning to look like this nonsense will drag on right up to the debt ceiling deadline at 11:59 PM on October 17th.  Now I'll admit I really thought the clowns would come to some sort of agreement on the budget to avert a gummint shutdown, and that didn't happen.  But this next showdown will be a lot more serious.  Are these idiots all really ready to commit national hiri-kiri out of sheer willful stubbornness?  Until this week, I wouldn't have thought it possible.  Now I'm not so sure.

In the meantime, we've got both the VIX and VVIX rising (but possibly topping) while the SPX Hi-Lo indicators and the A/D line aren't looking particularly bearish.  I'm thinking we're in for a period of congestion that is going to last until we get some decisive action out of Washington.  So given the mixed picture in the charts tonight, the only thing I can think to do is to call Thursday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16  total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we remain at 1695.00.

Wednesday higher only if ES pivot holds

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

• Wednesday higher only if ES stays above pivot by mid-AM, else lower.
  
• ES pivot 1685.67.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains long at 1695.00.

Recap

Hey Mikey!  He likes it!  Go figure - Mr. Market apparently approves of the government shutdown (actually just a partial shutdown) with a nice 62 point bounce in the Dow on Tuesday.  And while we're talking about government shutdowns, why is it that the venal clowns on Capitol Hill continue to collect their paychecks for not doing their jobs, while thousands of ordinary citizens are now going without?  Something's not right here.  So upon that jolly note, let's move on to the charts once again.  But first...

Southwest Airlines Goes Down

Is this any way to run an airline?

I just heard from the credit card dispute department.  You may recall how the Night Owl got suckered into paying a business class fare for steerage class service on Southwest Airlines (LUV, 14.73 +0.17)  back in June.  When I asked them for a refund of the difference, their whole attitude was basically "tough luck, sucker".  Well it seems that karma has intervened and after reviewing the evidence I presented describing Southwest's deceptive advertising practices, the credit card company agreed with me and Southwest has now officially thrown in the towel on this whole unfortunate matter.  Night Owl 1, Southwest zilch, zero, nothing, nada.

The technicals (daily)

The Dow: After  a politically induced drop on Monday, the Dow rebounded on Tuesday with a bullish  inside harami worth 62 points.  While we remain inside the descending RTC, the indicators have now clearly bottomed and begun rising off oversold.  So this chart is now looking bullish.

The VIX: On Tuesday, the VIX dropped 6.39% on a highly unusual bearish kicking pattern.  It also came off its upper BB after just one day, as is its custom.  Indicators remain overbought but have now peaked so this one looks ready to move lower again on Wednesday.

Market index futures: Tonight all three futures are lower at 12:36 AM EDT with ES down by 0.16%.  After a strong showing Monday that caused a bullish RTC trigger the new candle is developing as a dark cloud cover.  Still, we have a freshly completed bullish stochastic crossover and rising indicators just now off oversold, so the general gestalt of this chart remains bullish.

ES daily pivot: Tonight the pivot jumps from 1674.00  to 1685.67.  With a slow drift lower in ES since Tuesday's close, that still leaves us above the new pivot, but just barely.  It's bullish, but only as long as ES can avoid falling through.

Dollar index: The dollar remains in a strange downtrend, putting in the third of three successively larger green candles that are moving steadily lower.. So the trend wins out and you have to imagine that there's more downside to come here.

Euro: The euro put in a giant inverted hammer on Tuesday in a failed attempt to escape the gravitational attraction of 1.3529.  That leaves us at the upper end of an almost two week long trading range now.  The indicators are kind of wandering around in no-man's land between oversold and overbought, so no guidance there.

Transportation: Dow Theorists take note - on a day the Dow was up 0.41%, the trans jumped 1.36% on Tuesday with a jolly green marubozu that popped right out of a descending RTC for a good bullish setup.  The stochastic also formed a bullish crossover and the indicators have now clearly bottomed at oversold.  So everything is pointing to more upside here on Wednesday.

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   17/35  14/32

 36  9/3        21         54        -      -   1633   17/36  14/33

 37  9/9        35         30        +      +   1655

 38  9/16       40         28        +      +   1688

 39 9/23        52         36        +      +   1710  

 40 9/30        39         43        +      -   1692

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 for the fourth week in a row we were both wrong.  Therefore we continue the year with an accuracy of 17  for 36, or 47%.   The poll as a whole drops to 14 for 32 or 42% - it continues to be a tough year for the poll so far.

This week, for the fourth time this year we find that I diverge from the majority.  While they have now shifted to bearish, I remain bullish.  We'll see.

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  8      3      3           3        0.800    485
October    0      0      1           0        0.000      0

     And the winner is...

The first week of October is historically pretty weak, however we currently have a bit of positive momentum going in tonight's charts.  That said, the futures do seem to be guiding lower.  Therefore, I'm going to make a conditional call - if ES can stay above its pivot by mid-morning Wednesday, we'll close higher, if not, then lower.

ES Fantasy Trader

Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16  total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we remain at 1695.00.

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1675.50.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains long at 1695.00.

Recap

And so the Ringling Bros. Obamum and Boehnly circus rolls on.  There's no shortage of elephants and donkeys, but mostly clowns.  Lots and lots of clowns.  Ha ha.  See them point giant oversized clown fingers at each other.  Ha ha.  See them trip over their big baggy egos.  Ha ha.  What would we do for amusement were it not for the 500 odd idiots in Washington who we sent there in the misguided belief that they could accomplish anything productive. 

Why do I even bother doing the technicals?  Obviously the clowns are in control.  And so, in protest, tonight I refuse to look at the charts.  All you need to know about the market will come from the Senate floor.  Or the House floor.  Or the cutting room floor.  Who know, who cares.  A pox on both their houses.  Foo.

The technicals (daily)

The Dow: xxx

The VIX:  xxx

Market index futures: xxx

ES daily pivot: Tonight the pivot drops from 1687.33  to 1675.50.  xxx

Dollar index: xxx.

Euro: xxx

Transportation: xxx


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  8      3      3           3        0.800    485

     And the winner is...

No one.  The charts are all bollixed up from the shenanigans going on in Washington.  At the moment the futures are actually running higher but who knows.  One thing I've learned about doing technical analysis is when to pack it in and tonight is one of those nights.  I think I'll just take some time off until this latest piece of stupidity blows over.  So it's Tuesday uncertain for me.

ES Fantasy Trader

Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16  total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we remain at 1695.00.

Monday lower

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

• Monday lower, medium confidence..
  
• ES pivot 1687.33.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains long at 1695.00.

Recap

The market was pretty conflicted last week, being jerked about as it was by every pronouncement, rumor, and news flash out of Washington about [cue spooky music] impending doom!  Sort of like - no, exactly like - all the big hoopla over the "fiscal cliff" and the sequester last December?  Remember that?  OMG, the sky is falling, the end is near, it's the stockopolypse!  And what happened?  At the very last second, our esteemed Congressdroids miraculously managed to kick the can down the road one more time and the next day the markets rallied hard.  I'm now taking bets from anyone who thinks this bizarre political Kabuki theatre is going to be any different this time.

The technicals (daily)

The Dow: So the Dow was down Friday, ending exactly where it ended two days earlier.  But the candle traded outside the descending RTC for a bullish trigger and drove the indicators to quite oversold levels.  I'm sorry but this still looks more bullish than bearish to me.

The VIX:  After bumping up against its 200 day MA all last week, the VIX finally broke through on Friday with a big 10% gap up and drove the indicators straight to overbought.  But this could go either way on Monday.  This move was largely Washington-driven anyway.

Market index futures: Tonight all three futures are substantially lower at 1:05 AM EDT with ES down by 0.67%.  The Chicken Little crowd is obviously out in full force this Sunday night, with a giant gap down star.  This is 2/3 of a bullish morning star and with indicators now well into oversold, that gap is going to be wanting filling.  Maybe not Monday, but soon.

ES daily pivot: Tonight the pivot steps down from 1691.92  to 1687.33..  We remain well below the new pivot, so this indicators remains bearish.

Dollar index: The dollar gapped down on Friday, unable to capitalize on its recent descending RTC exit.  But support at 54.86 held and the candle was a spinning top so it's not at all clear that this signals more downside on Monday..

Euro: The euro on the other hand just continues to consolidate in the 1.3476-1.3527 area.  If you squint, you can sort of see a symmetrical triangle thing going on here so the next move just might be higher from these levels.

Transportation: The trans are looking pretty bearish at this point, now on a six day downtrend.  But Friday gave us a hammer in oversold territory, though with so much downside momentum going, a turnaround may take a few days from these levels.


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  7      3      3           3        0.769    356

     And the winner is...

The last day of September is historically quite bearish anyway, and this year there will be all sorts of wailing and moaning from our sogenante leaders predicting the end of the universe.  So with the fiscal cliff, uh I mean government shutdown having one last day to go, look for a close of Monday lower.  Then when the can gets kicked at 11:59:59 PM Monday night, we'll go higher on Tuesday.  Pass the popcorn.

ES Fantasy Trader

Portfolio stats: the account remains at $110,000 after 16 trades (12 for 16  total, 6 for 6 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we remain long at 1695.00.