Friday higher if ES pivot passed

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

• Friday higher only if ES pivot passed, else lower..
  
• ES pivot 1755.08.  Breaking above is bullish..
• Next week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Logic prevailed as Wednesday night's bearish technicals translated into a 73 point loss for the Dow on Thursday.  So on this Halloween, we ponder whether this trick will be followed by a treat on Friday or more of the same.

The technicals (daily)

The Dow: Intraday, the Dow kind of meandered on Thursday but the candle ended at session lows as an ugly red marubozu.  Despite two straight losing days, we're still (just) inside the rising RTC, so it's too early to pull the plug on this rally.  But Friday is do or die for the Dow.  And right now, it's looking grim.

The VIX:  The VIX continues to be plagued by indecision.  After Wednesday's monster gravestone doji, we got a big red spinning top on Thursday that belied the meager 0.73% advance.  That also left us overbought so while the general motion lately is vaguely upwards, it's by no means clear we're going higher on Friday.

Market index futures: Tonight all three futures are higher at 12:24 AM EDT with ES up by a modest 0.06%.  As bad as Thursday's gap-down red candle looked, it wasn't enough to drive the indicators oversold.  But it did drop us out of the rising RTC so that's a bearish setup.  The new overnight candle is forming as a harami, which is bullish, but you can't really read too much into half-baked candles.  Overall though, this chart continues to look bearish.

ES daily pivot: Tonight the pivot drops again from 1761.83  to 1755.08.  We're still below the new pivot but with ES stabilizing in the overnight, it's only by a couple of points.  So this remains bearish for the time being, but we'll have to watch for any attempts to break above.

Dollar index: Last night I wrote "more upside looks likely" for the dollar and .that paid off nicely with a 0.53% gap-up pop on Thursday.  We're around some resistance right now and there is that gap that may want filling.  The indicators are also now quite overbought but there's still not a clear reversal warning here so I'm going to just punt this chart tonight.

Euro: And last night I also wrote, "this chart looks continued bearish" which proved to be an understatement as the euro suffered its biggest drop on Wednesday since the start of July, down to 1.3592.  While this was enough to drive th3e indicators oversold, we're still nowhere near the lower BB and the stochastic is still not ready to start forming a bullish crossover.    So we remain in a downtrend and the overnight confirms that, down another 0.24% so far leaving this chart looking continued bearish.

Transportation: Last night I wrote "this chart too is now looking bearish" and indeed we dropped another 0.48% here on Thursday.  With indicators still (just) overbought, and no nearby support in sight, this chart continues to look bearish.


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    7      5      8           2        0.643    674

     And the winner is...

Friday is the first of a new month and while those are generally bullish, that isn't historically true for November, although the first week of November as a whole is positive.  Now while the charts continue to look bearish. they actually don't look as bad as last night.  I'll note too that the NYSE A/D line actually moved higher on Wednesday from a low level and the Hi-Lo index remains at 100 - not the sort of behavior you'd expect if you were about to fall off a cliff.

So there's enough doubt here to preclude a simple call for Friday lower.  Instead we'll start the new month off with a conditional: if ES can break back above its pivot of 1755.08 by mid-morning Friday, we'll close higher, else lower.  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 lower

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

• Thursday uncertain.
  
• ES pivot 1761.83.  Holding below is bearish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Interesting - the Fed spoke on Wednesday, essentially saying nothing new, bu Mr. Market didn't like it anyway, with the Dow finishing the day down 62.  At least with that uncertainty resolved, we can get back to the technicals for Thursday.

The technicals (daily)

The Dow: Despite a late afternoon recovery of sorts, the Dow ended Wednesday with what is basically a dark cloud cover and a bearish stochastic crossover as resistance at the September records proved too much.  That also puts the double bottom thesis in doubt.  So right now, the general tenor of this chart has turned bearish.

The VIX:  The VIX remains stuck in a narrow range centered about 14 for nine days now.  It put in an unusual gravestone doji on Wednesday in which an attempt to rally was stymied by the 200 day MA.  That took the indicators overbought and moved the stochastic into position for a bearish crossover so I'd say this one's going lower.

Market index futures: Tonight all three futures are lower at 112:41 AM EDT with ES down by 0.36%.  Wednesday's candle was mostly dark cloud cover and it took us right to the edge of the rising RTC.  The overnight is now trading outside for a bearish setup.  With indicators continuing to move lower off extreme overbought, this chart now looks officially bearish.

ES daily pivot: Tonight the pivot dips from 1763.58  to 1761.83.  We were below from the Fed announcement on and remain below the new pivot so this indicator is now clearly bearish.

Dollar index: On Tuesday the dollar posted a gain that was a bullish RTC trigger and on Wednesday we got the payoff in the form of a 0.21% gain that just took the indicators off oversold and started a new rising RTC..  So more upside looks likely.

Euro: The euro's recent uptrend is now officially over as the currency closed down for the third day running on Wednesday.  And the overnight is running even lower, off another 0.13%.  Indicators still have room to run to oversold so this chart looks continued bearish, which squares with my bullish dollar call (I look at these two charts completely independently).

Transportation: The trans is also stuck behind resistance like the Dow, here at 7055, giving up 0.61% on Wednesday.  That was enough to drop it out of its rising RTC for a bearish setup and start moving the indicators off overbought.  So this chart too is now looking bearish.


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      5      8           2        0.615    601

     And the winner is...

We're had quite a run these past three weeks and the market has been overdue for a pullback of some sort.  With all the technicals looking bearish tonight, it looks like we may be starting that process, so the logical call is for Thursday 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.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1763.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Wow - I'll admit I was a bit surprised at the strength Mr. Market displayed on Tuesday, pushing to new record highs as it did.  Now with Wednesday being a Fed day, we'll cut right to the chase since as a matter of policy I always call such days as uncertain.  There's just no way to tell when we're going to get a surprise that doesn't match expectations.  So we'll pretty much skip the charts tonight since there's not much point.

The technicals (daily)

The Dow: I will at least mention though that the Dow now has a bullish double bottom pattern in and is right on the cusp of breaking out the right-hand leg of the "W".  If you compare the indicators now to where we were the last time we hit these levels, we're actually in better shape now.  Last time, we'd been climbing the upper BB for six days.  This time we've yet to reach it.  Last time RSI was 96, this time it's 84.  So there's clearly more gas left in the tank for a possible breakout.


ES daily pivot: Tonight the pivot rises from 1757.58  to 1763.58.  We remain reasonably above the new pivot, so this indicator is bullish.


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   21/40  17/37

 41 10/7        30         33        +      -   1691 

 42 10/14       48         22        +      +   1703

 43 10/21       57         30        +      +   1745

 44 10/28       59         19        +      +   1760  

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 I voted bullish four weeks ago, however the majority of the poll was bearish so I was right and they were wrong.  Therefore we continue the year with an accuracy of 21 for 40, or 53%.   The poll as a whole drops to 17 for 37 or 46% - it continues to be a tough year for the poll so far.

This week we find more people jumping on the bandwagon as the bullish number rises to 49%, its highest reading YTD and in fact its highest reading in over a year.  And bearish sentiment has dropped to its lowest level since the start of the year.  The last time we had such a big spread was back in September of 2012 - just before the SPX went on a six week losing streak that lasted into the middle of November.  Whenever I see readings get this extended I start thinking we're due for a trend change.  Of course this year we've got seasonality more in our favor but still - this is something to keep in mind.

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      5      7           2        0.615    601

     And the winner is...

Although the official call is for Wednesday uncertain, technically, the charts continue to look bullish.  Unless the Fed throws some serious cold water on this party, I wouldn't be surprised to see even more records set this week.  And it kind of pains me to say that, since I'm a believer in mean-reversion.

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 uncertain

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

• Tuesday uncertain but bias lower.
  
• ES pivot 1757.58.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Ho hum - another Day of Nothing.  I figured the Dow could move at least a bit higher on Monday, and we were indeed up early on until some afternoon selling brought us right back to where we started.  So that call was wrong - by all of one point.  And the SPX actually was up a little.  So let's move on to Tuesday.  Unfortunately, we're going to have to make it fast as the Night Owl has to do something I absolutely detest - get up early Tuesday morning.  Ugh.

The technicals (daily)

The Dow: Monday's doji probably reflects indecision ahead of the Fed so doesn't necessarily imply a top.  Upper BB continues to climb away.

The VIX:  Remains stuck in a nervous range with a small gain Monday - not much of a pattern here.  But with VVIX at support, the next move in the VIX may be higher.

Market index futures: Tonight all three futures are lower at 12:27 AM EDT with ES down by 0.13%.  Three white soldiers look bullish, rising RTC intact but declining indicators suggest a possible pause on Tuesday.

ES daily pivot: Tonight the pivot inches up from 1750.83  to 1757.58.  That leaves us below the new pivot, so now turns bearish.

Dollar index: Short term RTC exit for bullish setup but intermediate term downtrend intact..

Euro: After fourth doji in a row, definitely feeling toppy.  Overnight down 0.22% confirming that.

Transportation: Modest gains on Monday keep us in a rising RTC.  Friday's hanging man not confirmed - still too soon to call a top.


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      5      6           2        0.615    601

     And the winner is...

Some charts now looking toppy, NYSE A/D line's been putting in lower highs and lower lows lately so the bias looks negative.  However, with an upcoming Fed day on Wednesday I expect a lot of sitting on hands on Tuesday similar to what we got Monday.  Accordingly, I'm calling 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.again.

Monday higher

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

• Monday higher.
  
• ES pivot 1750.83.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Zzzz...zz...zzz...huh?  Oh wait - is it the end of October already?  Sorry, I must have dozed off there for a minute.  But hey, if I had to choose between last week's boring action and the summer of 2011 when the ability of the Greeks to pay their bills or not would determine the end of the universe, and well give me boring every time.  So will Rip Van Market slumber his way through the rest of the month or is he going to suddenly wake with a start?  We can find out by doing some chart peeping.  So grab your late-nite (or early morning) extra double triple espresso and let's get cracking.  Yum!

The technicals (daily)

The Dow: As my Scottish cousin Owl McTavish would say about the Dow's ability to rise further, "Ee ha' me doots".  But doubters are losers and we gained another 61 points on Friday to remain inside the rising RTC.  The upper BB continues to fly away, now 15,659, so there's still room to run here.

The VIX:  The VIX only fell 0.03% on Friday but that was enough for a bearish RTC trigger.  The inverted hammer isnt' a great reversal candle and with the lower BB way down to 11.16 now and no support til 12.86, there's still room to run lower on Monday.

Market index futures: Tonight all three futures are higher at 12:26 AM EDT with ES up by a decent 0.31%.  After some resistance earlier last week, ES has now cleared the 1750 hurdle as it continues to march into record territory.  With the developing overnight candle we now have a three white soldiers pattern and with the upper BB at a patriotic 1776, it looks like ES may be interested in taking a peek at it.

ES daily pivot: Tonight the pivot rises from 1746.75  to 1750.83. The move up in ES earlier this evening keeps us comfortably above the new pivot and keeps this indicator bullish.

Dollar index: The dollar finished Friday dead flat after a failed rally attempt.  So the downtrend remains intact though it appears the buck is trying to find some footing at these levels.  There's no clear direction here for Monday..

Euro: The euro likewise seems to have encountered some resistance in the 1.3810 area.  With the Sunday overnight currently up just 0.02% and indicators just starting to budge off extreme overbought, it looks like the next move may be lower.

Transportation: Here's a bit of bearish divergence - on Friday the trans lost 0.20% to the Dow's 0.39% gain with a classic red spinning top.  We're still well inside the rising RTC but this is at least a suggestion of a reversal - though one which requires confirmation.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  8      3      3           3        0.800    485
October    6      4      6           2        0.667    602

     And the winner is...

With the lone exception of the trans (and that one isn't confirmed) the charts continue to look bullish tonight, so logic dictates a call of 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.