Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1720.92.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last night I wrote that "Thursday could be a doji day" and darned if that isn't exactly what we got with the Dow putting in a classical dragonfly doji.  What does this mean for Friday (particularly since the SPX candle was fairly dissimilar)?  Read on...

The technicals (daily)

The Dow: The Dow ended Thursday down just two points after spending the whole day battling back from a big dump out the gate, largely attributable to IBM.  So we're going to take this doji with a grain of salt.  I think the steady upward trend during the day is more important here.  We are now officially overbought  but the upper BB is still 184 points away.  One more thing though - we did trade outside the rising RTC on Thursday for a bearish setup, so overall this chart is indecisive.

The VIX:  Last night I wrote "the VIX could face more downside on Thursday" and that's what happened as the VIX lost another 8.36% to break uder its 200 day MA.  The failure of the MA to act as support is bearish per se so while we're now officially oversold, the lower BB isn't until 12 and I don't think the VIX is done falling.

Market index futures: Tonight all three futures are higher at 1:22 AM EDT with ES up by a healthy 0.23%.  ES hit a record close on Thursday after breaking through resistance at 1720 and its upper BB at 1724.  But we remain in a clear rising RTC and we're getting decent pin action in the overnight so this chart remains bullish.

ES daily pivot: Tonight the pivot rises again from 1707.17  to 1720.92.  This continues to leave ES safely above the new pivot and so this measure continues bullish.

Dollar index: Last night I wrote "there's a hint of a move lower" Thursday and it looks like the dollar took the hint.as it gapped down a huge 1.05% breaking support at 54.50 and  stopped only by its lower BB at 54.47.  I'd expect some gap-filling or at least a DCB after such a big move.  But the indicators as still just coming off overbought, so there's a chance we might still see a bit more downside on Friday before the dollar can get its act together.

Euro: And the euro put in a corresponding big pop on Thursday to bust right out of its descending RTC for a bullish setup, and then on through its upper BB to close at 1.3679.  This is also a resistance line and we're now overbought so I'd expect the euro to take a break on Friday.  The overnight seems to be supporting that for the moment, down 0.09% right now.

Transportation: The trans posted a small gain on Thursday with a hanging man complementing the Dow's doji.  RSI is now quite overbought at 97, we're real close to the upper BB and we traded outside the rising RTC for a bearish setup.  So all things considered I'd say the trans are gearing up to move lower soon.

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   18/37  15/34

 38  9/16       40         28        +      +   1688   19/38  16/35

 39 9/23        52         36        +      +   1710  

 40 9/30        39         43        +      -   1692

 41 10/7        30         33        +      -   1691 

 42 10/14       48         22        +      +   1703

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 we were again both right.  Therefore we continue the year with an accuracy of 19  for 38, or 50%.   The poll as a whole rises to 16 for 35 or 46% - it continues to be a tough year for the poll so far.
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    3      2      6           1        0.800    506

     And the winner is...

I hate to go against history, and history says that this Friday is awful.  I also don't like calling op-ex days but all of the technicals continue to look pretty bullish tonight so I'm just going to go out on a limb and call Friday higher.  See you Sunday night!

ES Fantasy Trader

Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17  total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we stand aside.again.

Thursday uncertain

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

• Thursday uncertain - doji possible.
  
• ES pivot 1707.17.  Holding above is bullish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well Hallelujah!  In what is now fast becoming a Washington tradition, the odd Kabuki play called "Kick the Can" was acted out once again, coming to its usual slow motion climax Wednesday night just in time to catch Leno on TV.  And so now all the good little Demicans and Republicrats can go to bed and sleep soundly in the illusion that they have accomplished something productive.  At least one more bit of uncertainty has been taken off the table - until the next production of KtC, winter edition, when we get to do it all over again.  Now maybe we can get back to doing some technical analysis.

The technicals (daily)

The Dow: Mr. Market clearly liked the clank of the can clattering down the road one more time as he propelled the Dow up 206 on Wednesday to remain inside the rising RTC.  We have now retraced better than half of the debt ceiling worries from last month.  However, we're now real close to a resistance line at 15,404, the indicators are now overbought again, and the stochastic has just formed a bearish crossover.  o my take here is cautious optimism for Thursday.
 
The VIX:  On Wednesday, the VIX did a cliff dive of Acapulco-like proportions down a massive 21.17% in response to the debt deal.  And even with that, the indicators are still not oversold, though the stochastic just eked out a bullish crossover.  With the 200 day MA just below us at 14.41 and the lower BB not til 11.93, the VIX could face more downside on Thursday.

Market index futures: Tonight all three futures are modestly lower at 12:51 AM EDT with ES down by 0.09%.  ES came very close to its record high from September 19th on Wednesday, and also very close to its upper BB at 1721.45.  But this move also drove it overbought and formed a flattish bearish stochastic crossover.  That we're not seeing any follow-through in the overnight indicates that some profit-taking may kick in on Thursday.  At the current level of 1711.75, we're now just outside the rising RTC, which is a bearish setup.

ES daily pivot: Tonight the pivot jumps from 1697.08  to 1707.17.  That still leaves us above the new pivot, though by a lot less.  But it's still bullish for now.

Dollar index: The dollar didn't react much on Wednesday, finishing exactly flat on the day, though the inverted hammer played out largely below Tuesday's.gap-up red candle neatly filling the gap.  With indicators now overbought, there's a hint of a move lower, though with the way the dollar has been getting yanked about lately, who can tell.

Euro: And the euro remains stuck in its trading range of 1.3525 - 1.3582 pretty much as I expected Monday night.  And I still see no sign that the sideways movement is over just yet.

Transportation: The trans did even better than the Dow on Wednesday, closing at record highs just short of their upper BB at 6765.  The indicators have just gone overbought and the stochastic has just formed a bearish crossover, so Thursday might be a topping day here though we remain in a rising RTC.


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    3      2      5           1        0.800    506

     And the winner is...

Hmm - while we ow have this messy debt ceiling business off the table for a while at least, we're also nearing the end of op-ex week.  While the charts still look at least a little bullish, they're also closing in on some resistance points that make me think further upside is going to be limited.  In fact, I'm thinking now that Thursday could be a doji day so I'm just going to have to call Thursday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17  total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we stand aside.again.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1697.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well the Circus rolls on as we all now await the exciting high-wire finale in just a couple of days.  I'm glad I called Tuesday as "uncertain" because there was no way to predict that Monday's optimism would evaporate on Tuesday like it was never there.  Tuesday's big dump was entirely politically driven.  Now since this is a technical blog and not a political one, I am officially declaring surrender.  Let's cut to the chase and simply say that Wednesday (and Thursday too for that matter) are completely uncertain, depending as they are entirely on the whims of Emperor "I Won't Budge" Obama and his 500-odd bickering stooges up on Capitol Clown Hill.

The technicals (daily)

The Dow: Doesn't matter.

The VIX:  Meaningless.

Market index futures: Tonight all three futures are higher at 1:10 AM EDT with ES up by 0.44%.  This simply reflects the latest round of can-kicking going on down in DC.

ES daily pivot: Tonight the pivot ticks down from 1697.25  to 1697.00.  We are now above the pivot so technically, this is bullish.

Dollar index: No point..

Euro: Why bother.

Transportation: Whatever.


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    3      2      4           1        0.800    506

     And the winner is...

TBD.  Wednesday uncertain.  That's all she wrote.

ES Fantasy Trader

Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17  total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we stand aside once again amid the continuing insanity down  in Clownington DC.

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1697.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Turns out some positive sounding blather from the Washington Clowns helped the Dow end the day in the green on Monday as the market continues to discount the possibility of a federal default.  Personally, I have to agree.  I don't think this bunch of venal politicians can really be so stupid as to torpedo the entire country just to save their own jobs ... could they?  Well we can't control that, but we can look at the charts, so let's see where Tuesday's headed.

The technicals (daily)

The Dow: We now have a decent three white soldiers rising RTC going on the Dow.  We're now near overbought but still a long way from the upper BB.    Monday's candle was a hanging man but with no resistance til 15,424, there's no reason to believe this chart won't continue higher.

The VIX:  Monday was a very odd day for the VIX.  First, it rose 2.23% even as the broader market was also up.  But it did that with a tall red candle in bearish dark cloud cover position that leaves the overall downward gestalt intact.  Indicators have also yet to reach oversold so overall, this chart remains bearish.

Market index futures: Tonight all three futures are barely higher at 1:39 AM EDT with ES up by 0.03%. Monday's action in ES was quite positive, keeping us in a new rising RTC.  However, the overnight is forming as a topping inverted hammer that has the indicators peaking just short of overbought.  After three strong days, we could be in for a pause.

ES daily pivot: Tonight the pivot rises from 1690.75  to 1697.25. We remain above the new pivot so this indicator remains positive.

Dollar index: On Monday the dollar continued its reluctant filling of last weeks' big gap up with yet another doji, the fourth in a row good for a 0.17% gap down.  Indicators are now almost overbought so I'd be wary of calling this one higher just yet.  More downside seems more probably at this point.. Oh, and the stochastic just formed a bearish crossover, helping that thesis along.

Euro: Meanwhile the euro put in a fat little spinning top on Monday but failed to break out of a now week long trading range.  Even with this sideways action we remain in a larger descending RTC so it looks like more of the same is in store for a day or two.

Transportation: On Monday the trans gave us a hanging man, though still well inside the rising RTC.  Indicators have yet to hit overbought too and we're nowhere near the upper BB, so this is the sort of warning that requires confirmation.  I can't call this chart lower just yet.


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    3      2      3           1        0.800    506

     And the winner is...

The power of the headlines was evident Monday as the markets managed to erase an early gap down and close higher on more vague news of a "possible deal" coming soon... maybe.  So with the debt deadline of the 17th fast approaching I think there's not too much point in relying on the technicals.  I don't really see any bearish signs right now but with the continuing uncertainty, that's the call - Tuesday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $110,625 after 17 trades (13 for 17  total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we stand aside once again amid the continuing insanity down  in Clownington DC.

Monday lower

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

• Monday lower, low confidence.
  
• ES pivot 1690.75.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains long at 1695.00.

Recap

As I suspected last Thursday night the market wasn't quite out of gas, having enough left in the tank to propel the Dow up another 111 points on Friday.  We now attempt to disentangle the Washington political circus from the technicals in the charts tonight and see where Monday's semi-holiday might be going.

The technicals (daily)

The Dow: Friday's healthy advance gave us a bullish trigger on the descending RTC exit, officially closing last month's downtrend.  The two white soldiers pattern is also bullish and indicators continue marching towards overbought but are not there yet.  In purely technical terms, this chart looks bullish.

The VIX:  Last Thursday I wrote that the VIX had "plenty of room to run lower on Friday".  And that's just what it did, down another 4.61%.  That move left us with a bearish trigger on exiting the previous rising RTC.  The indicators continue to fall off overbought but are not yet near oversold so this chart continues to look bearish.

Market index futures: Tonight all three futures are significantly lower at 12:25 AM EDT with ES down by 0.72%.  Last weeks big gains were enough to move ES out of its descending RTC for a bullish trigger and while the indicators are higher, they're still not even overbought yet.  Thhe overnight gapped down on the open on news of yet another an impasse down in Clown Town but even that only erased Friday's gains, not Thursday's.  And ES has been slowly drifting higher all evening.  Still, I think the odds of moving back to Friday's close of 1699 on Monday are slim.

ES daily pivot: Tonight the pivot jumps from 1673.58  to 1690.75.  This gain combined with ES's overnight fall put us below the new pivot right at midnight, so this indicator is now bearish.

Dollar index: After last Tuesday's big gap up, the dollar spent the rest of the week putting in reversal candles - but not reversing.  Friday's was an inverted hammer that did manage to close down 0.08%, but there's a lot of retracing left to do.  With indicators near overbought now, I'd say continued downside is a possibility on Monday..

Euro: On Friday the euro confirmed Thursday's doji and closed up at 1.3565.  That move also just gave us a bullish stochastic crossover.  With the overnight trading higher again, I'd say the euro looks good to close Monday higher.

Transportation: The trans continues to mimic the Dow though Friday's 0.56% advance was a bit lower than the Dow's 0.73%.  Still with no resistance til 6675, this chart looks 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  8      3      3           3        0.800    485
October    3      1      3           1        0.800    570

     And the winner is...

Technically, last Thursday and Friday's big moves in the market look quite bullish, but I think they have to be taken with a grain of salt since they were largely due to nothing more than "hope" than the Clowns  in Washington would come to some sort of agreement on the debt ceiling.  With that hope now apparently dashed and the Head Clown's position being "I'm not budging" (a direct quote), it's back to reality for Mr. Market.

The charts that closed Friday all look pretty bullish but the Sunday overnight real-time data is bearish, so I'm afraid I'm going to have to go with that.  Unless some sort of major piece of good news comes out on Monday, like maybe the Emperor and all of Congress announcing they're resigning in shame, it's looking like Monday lower.

ES Fantasy Trader













Once again patience proved to be a virtue.  After taking some not inconsiderable heat on this latest trade, last week's closing rally propelled us (finally) into a profit position small though it may have been.  I decided at that point not to tempt fate any further and got out while the getting was good.  For the time being, that seems to have been a prudent decision.  But I'll take a 1.25 point win over a 20 point loss any day.


Portfolio stats: the account rises to $110,625 after 17 trades (13 for 17  total, 7 for7 longs, 6 for 10 short) starting from $100,000 on 1/1/13.  Tonight we .stand aside.  I don't like nights like this when there's a big gap right off the open.  It calls into question whether or not we'll see retracement or follow-through.  I'll just sit this one out.

SLD    10    false    ES    DEC13 Futures     1696.25    USD    GLOBEX    OCT 11 12:53:21