Friday higher only if ES pivot passed

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

• Friday higher only if ES breaks above pivot, else lower.
  
• ES pivot 1746.75.  Holding below is bearish..
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last night we had something of a mixed picture but I decided to go with the preponderance of bullish evidence  and goo d thing too as the Dow gained 96 points on Thursday.  This was an interesting development so let's see how Friday may play out.

The technicals (daily)

The Dow: Well that was a close one.  Last night the Dow stood on the verge of a bearish RTC exit but Thursday's gains popped us right back into the channel.  We now have no further resistance until the upper BB at 15,614 and that is now definitely withing striking distance.  There are no bearish signs on this chart right now.

The VIX:  Last night the VIX looked like it might be ready to move higher but VVIX said no so I did not make the call.  And good thing too since the VIX continued lower on Thursday by another 1.64%.  That leaves it teetering on the edge of the rising RTC foe a bearish setup.  However with indicators still oversold, we now have a mixed picture and that's too hard for me, so I'm just taking a pass on this chart tonight.  Could go either way on Friday.

Market index futures: Tonight all three futures are lower at 12:37 AM EDT with ES down by 0.20%.  With an inside harami on Thursday and a dip in the new overnight, the symmetrical triangle I mentioned last night continues to play out as we alternate between daily gains and losses.  RTC-wise, tonight's action is a bearish trigger as the indicators continue to slowly fall off overbought.  Right now this chart seems to have more downside risk than upside potential as resistance stiffens around 1750.

ES daily pivot: Tonight the pivot rises from 1741.92  to 1746.75.   The sudden plunge in ES around 11:30 PM has now dropped it straight through the new pivot, so this indicator turns bearish.

Dollar index: Nothing much new here - the dollar remains stuck in a rut.as it continues dribbling down its lower BB.  Still no sign of a turn-around on this chart.

Euro: And correspondingly, the euro continues on a tear, closing at 1.3820 on Thursday.  Next resistance isn't til 1.4052 and it's showing no signs of slowing down.

Transportation: Last night I wrote "there's no bearish signs here tonight" and indeed there weren't ad the trans gained another 0.88% on Thursday.  That keeps us in a railroad -straight track up the rising RTC into the stratosphere.  Everything I said last night remains true tonight - still no bearish signs.

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   20/39  17/36

 40 9/30        39         43        +      -   1692

 41 10/7        30         33        +      -   1691 

 42 10/14       48         22        +      +   1703

 43 10/21       57         30        +      +   1745

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 20 for 39, or 51%.   The poll as a whole rises to 17 for 36 or 47% - it continues to be a tough year for the poll so far.

The next two weeks should be interesting, as we once again have a divergence coming up between the way I voted and the way the majority voted.


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    6      4      6           1        0.636    602

     And the winner is...

Hmm - tonight is proving to be trickier than I first imagined.  On the one hand we have some bearish signs in the futures, but continued bullishness in the Dow combined with a lack of guidance from the VIX.  The conservative route would be to simply call Friday uncertain, but the fact that ES is hovering just below its new pivot suggests that a conditional call is the way to go.  So let's just say that if ES can break back above 1746.75 by mid-morning Friday, we'll close higher and if not, then lower.  This doesn't always work, but it works often enough to be worth a shot.  That's all, she wrote.  See you again 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 higher

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

• Thursday higher,  low confidence.
  
• ES pivot 1741.92.  Holding above is bullish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Logic prevailed and the market did go lower on Wednesday as I had expected, so persistence paid off.  Nothing earth-shaking but it did change the picture a bit.  Let's see how this alters the technical view of the charts.

The technicals (daily)

The Dow: On Wednesday the Dow opened down and that was pretty much that.  We gave back most of Tuesday's gains with a candle that's almost a dark cloud cover that stopped right on the edge of the rising RTC - call it a bearish setup.  Indicators are now clearly trending lower off overbought, so I'm thinking the top may be in now.

The VIX:  After bumping around the 13 level for three days the VIX put in a small 0.68% gain on Wednesday but did it on an inverted hammer.  Still, that's enough to set up a new rising RTC and with indicators all just off oversold, it looks like the VIX is gearing up to test its 200 day MA at 14.39 soon.  But it may not be on Thursday as VVIX was actually significantly lower Wednesday.

Market index futures: Tonight all three futures are higher at 12:35 AM EDT with ES up by 0.26%.  

ES daily pivot: Tonight the pivot steps down from 1746.67  to 1741.92.  The main effect of that is to put us back above the new pivot once again, so this indicator flips back to bullish.  On Wednesday ES gave back about half of Tuesday's gains but the overnight is heading back up again.  This is forming a nice symmetrical triangle so that is a bullish sign even though the indicators appear to have peaked two days ago on overbought.  I wouldn't count this chart out just yet.

Dollar index: The dollar actually eked out a tiny 0.05% gain on Wednesday though you'd never know it looking at the candles.  It's just a blip at the bottom of Tuesday's action as the dollar pretty much remains in the toilet now at a two-year low.

Euro: Last night I refused to call the euro lower based on a developing doji and it's good I held off, since that's just how Wednesday ended - with a perfect star.  That doesn't seem to be getting confirmed in the new overnight though as the euro remains solidly in its rising RTC and is now up another 0.07%.  So still no bearish signs here either.

Transportation: In a bit of bullish divergence, the trans were up 0.69% on a Dow the Dow lost 0.35%.  That green marubozu keeps them solidly inside their rising RTC as we continue climbing the upper BB further into record territory..  With the indicators all still broken on overbought, there's no bearish signs here tonight.


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    5      4      6           1        0.600    506

     And the winner is...

The market continues to look toppy to me candlestick-wise but I see enough positive signs in the trans, the currencies, the futures, and the VIX to call Thursday higher.  I'm not so sure about Friday though.

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 lower

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

• Wednesday lower,  low confidence.
  
• ES pivot 1746.67.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Huh - well I sure didn't see that one coming - the Dow was up 75 points on Tuesday when I thought it would go lower.  In hindsight, I guess the uptrend ain't over until it's over.  So let's be a bit more stringent tonight as we look for the elusive top.

The technicals (daily)

The Dow: On Tuesday the Dow rose 0.49% to finish just about on a resistance line around 14,484.  Nut this was a big non-confirm of Tuesday's doji, despite indicators which continue to fall off overbought.  With the next resistance not until the upper BB at 15,567, there really isn't anything bearish about this chart tonight.

The VIX:  We had another one of those unusual days when the VIX and the market were positively correlated with a 1.29% gain.  We also now have a bullish RTC trigger, suggesting the latest descending trend is over.  With indicators still just off oversold, I'd say odds favor more upside for the VIX on Wednesday.

Market index futures: Tonight all three futures are lower at 12:31 AM EDT with ES down by a non-trivial 0.33%.  After yet another solid up day on Tuesday, this is the biggest reversal we've seen at this hour in a while now, big enough to take us right to the edge of the rising RTC for a bearish setup.  Of course, I thought this chart was looking toppy last night and clearly ES still had room to run but the bearish signs are a bit stronger this time so perhaps this will be one of those cases where I was just a day early.  Either way, I continue to believe we're due for at least a one day move lower on Wednesday.

ES daily pivot: Tonight the pivot rises from 1738.50  to 1746.67.  That bump combined with the overnight sag in ES now puts us below the new pivot so this indicator becomes bearish, just like last night.

Dollar index: On Tuesday the dollar continued its march towards zero, down another 0.58%.and breaking year-long support at 54.39 on the $USDUPX.   The stochastic is admittedly flattening out in anticipation of a bullish crossover, but we ain't there yet.  As we continue to dribble down the lower BB, this chart remains bearish.

Euro: And the euro defied my expectations on Tuesday, gaining big to close at 1.3785, well above its upper BB and canceling Monday's hanging man.  Tonight we have another sign of a reversal but fool me once, etc. so I'm not buying it this time.  I'm going to wait and see on this chart.

Transportation: On Tuesday the trans continued outperforming the Dow, up another 0.82% to remain on the left edge of their rising RTC.  Indicators all remain pegged at overbought and are now useless for predictions.  We do have an inverted hammer suggesting the possibility of a reversal, but one that requires confirmation so I can't really call this one 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    4      4      6           1        0.556    452

     And the winner is...

Hmm - I think my underlying thesis for a move lower last night was valid, but some pesky good news just got in the way on Tuesday.  The bearish technical signs I was seeing then are pretty much still there so I'm just going to stick to my guns and call Wednesday lower.

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.

Tuesday lower

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

• Tuesday lower,  low confidence.
  
• ES pivot 1738.50.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Yawn - well both the SPX and the Naz finished Monday higher but the Dow did not, so that counts as a miss - by a whopping seven points.  Oh well.  Not much happened on Monday - but sometimes nothing can mean something.  Is this one of those days?  Read on...

The technicals (daily)

The Dow: Ranges have been compressing for four days now and Monday handed us a nice little red hanging man to go with indicators turning south off overbought.  This chart is now feeling toppy.

The VIX:  Last night I wrote "the VIX is gearing up for a move higher in the next day or two" and hey presto, it rose 0.92% on Monday confirming Friday's spinning top reversal candle.  With VVIX rising and a bullish stochastic crossover in the offing, I'd say there's more upside to go yet.

Market index futures: Tonight all three futures are modestly lower at 12:23 AM EDT with ES down by 0.07%.  ES put in a little doji right on its upper BB on Monday and although we remain in a rising RTC, with the indicators having peaked two days ago at overbought, this all suggests a short term top is in.  I'd look for lower here on Tuesday.

ES daily pivot: Tonight the pivot inches up from 1734.58  to 1738.50.  That move coupled with ES going nowhere in the overnight puts us below the new pivot for the first time in a few days so this indicator now turns bearish.

Dollar index: The dollar remains in the toilet, unable after three days to even start filling last week's huge gap down.  Indicators now all oversold but Monday's little spinning top really has little to offer.  I'd look for more sideways action for a few days here..

Euro: Meanwhile, the euro hit a wall around 1.3683 on Monday and put in a hanging man that's being nicely confirmed in the overnight, already down 0.09%.  With overbought indicators, this one looks to have topped and I'm thinking the euro's going lower.

Transportation: Probably the most bullish chart of the day, the trans gained another 0.40% on Monday to remain well inside a rising RTC and hug the upper BB in record territory.  Indicators remain broken but with no reversal candles in sight we can't call this one lower 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    4      3      6           1        0.625    527

     And the winner is...

Tonight I'm seeing some definite signs of topping that were not there last night.  We've had quite a run for the past three days so some retrenchment may now be in order.  It's unclear what impact Tuesday's jobs report is going to have but technically, logic dictates a call of Tuesday lower.

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.

Monday higher

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

• Friday higher, low confidence.
  
• ES pivot 1734.58.  Holding above is bullish.
• Resrt of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well the bears made two attempts to knock 'em lower Friday morning but ultimately to no avail.  The Dow ended up another 0.18% while the SPX gained a healthy 0.65%.  But that was then and this is now.  So let's get right to it and figure out where Monday may be going.

The technicals (daily)

The Dow: Thursday's dragonfly doji came to naught on Friday as we added on another 28 points.  I've noticed that despite its whimsical name and rather dramatic appearance, the dragonfly doji isn't the best reversal indicator.  So with rising volume and a strong rising RTC, it looks like this chart remains bullish despite being fairly overbought at this point.

The VIX:  Last Thursday I wrote "I don't think the VIX is done falling."  And it wasn't, down another 3.26% on Friday.  But it was  on a green spinning top.  Combined with now oversold indicators and a modicum of support in the immediate vicinity, we've got at least a hint that the VIX is gearing up for a move higher in the next day or two.  A rise in VVIX supports this idea.

Market index futures: Tonight all three futures are higher at 12:56 AM EDT with ES up by 0.13%.  ES continued marching up its upper BB on Friday despite indicators that are now pretty overbought.  But it remains well inside its rising RTC and with a three white soldiers pattern this chart continues to look bullish.

ES daily pivot: Tonight the pivot rises from 1720.92   to 1734.58.  We remain above the new pivot so this indicator remains positive.

Dollar index: On Friday the dollar put in a skinny little doji to arrest its  recent decline.  The indicators are now oversold as we continue to hug the lower BB, but it doesn't look like the downtrend is over just yet..

Euro: After last Thursday's massive gains, the euro took a breather on Friday with a little spinning top on top of Thursday's giant marubozu.  Some retracement seems to be in order here and it looks like the overnight is starting to provide it.  I'd be hesitant about going long the euro right now.

Transportation: On Friday the trans outperformed the Dow, up a big 1.23% to close well above their upper BB  That leaves us well inside the rising RTC.  The indicators meanwhile are pegged on overbought so have lost their predictive power.  Therefore this chart 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  8      3      3           3        0.800    485
October    4      2      6           1        0.710    534

     And the winner is...

Once again the charts continue to look bullish technically.  Simply being overbought or bumping the upper BB is not enough to call the market lower.  There is one note of caution though and that is that the Morningstar Market Fair Value Index has hit 1.05, tied for its YTD high, last set on May 20th.  And that very day marked the end of a month-long rally.  So I'm a bit cautious about the next few weeks but for now given the lack of bearish signs, logic dictates calling Monday higher.

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.