Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1754.00.  Holding below is bearish..
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

We had a bit of excitement here at Night Owl Central last night revolving around a corrupted Windows directory.  Suffice it to say that if you're missing a few files out of the 28 bazillion in there, if they're the right files then you're dead in the water.  Recovery eventually involved pulling the boot drive, attaching it to another PC, and copying the entire Windows backup from the file server back onto the drive.  That took hours.  What a pain.  But nothing can stop the Night Owl for long and we're back, baby!  So we didn't miss much - we're a bit lower than we were two days ago.  But let's see how the intervening candle changed the picture for Friday.

The technicals (daily)

The Dow: The Dow on Thursday gave back all of Wednesday's gains and then some to form a classic bearish engulfing pattern after just touching its upper BB.  That, plus a new bearish stochastic crossover and declining indicators all looks bearish for Friday.

The VIX:  After moving lower on Wednesday, the VIX had a big 9.79% pop on Thursday to bring it right back to recent resistance and break it decisively out of its descending RTC for a bullish setup.  We also got a bullish stochastic crossover so it looks like more upside is possible.  A test of the 200 day MA at 14.40 is not out of the question for Friday.

Market index futures: Tonight all three futures are higher at 1:09 AM EST with ES up by 0.13%.  A big loss on Thursday dropped us out of a wide rising RTC for a bearish setup and sent the indicators lower almost to oversold.  After a big move like this it's not uncommon to see a DCB and that's what the overnight is looking like right now.  Note too the presence of support at 1742.

ES daily pivot: Tonight the pivot drops from 1763.75  to 1754.00.  That still leaves us below the new pivot by a fair amount, so that's bearish.

Dollar index: After equivocating some on Wednesday the dollar put in a funny gap up on a tall red candle that opened on the upper BB and moved lower from there.  With indicators still overbought, more downside is possible..

Euro: On Thursday the euro put in a tall hammer that pierced the lower BB but that isn't getting confirmed i the overnight, now down another 0.28%.  Though indicators remain oversold, this doesn't bode well for the euro.  But obviously either this or my dollar call is wrong.  Both charts look bearish to me, but one of them will be higher on Friday.  I'm a bit more confident in the dollar.

Transportation: The trans got slammed Thursday with a deep red marubozu that broke support at 6977 on accelerating losses.  Indicators are now near but not at oversold.  With no reversal candle and no further support til 6737, this chart looks 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
November   2      2      0           0        0.500    122

     And the winner is...

Right now the charts are still looking technically bearish.  However, there's a slew of economic news coming out on Friday along with some yakking from Fed heads, including Uncle Ben.  Any of these has the potential to derail the technicals, so it's best to just let this one play out.  Therefore, the call is for Friday uncertain.  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 canceled

I apologize to my readers but the Night Owl will not be able to publish tonight due to a massive disk corruption this evening that left my entire system unusable.  No data was lost but restoring it from backup will take hours.  Check back again tomorrow.

Wednesday higher

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

• Wednesday higher, low confidence..
  
• ES pivot 1757.00.  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Gosh, it feels more like the Dog Days of August all over again rather than the start of November, with another small movement day.  Let's do the charts again to see when we might get some action here.

The technicals (daily)

The Dow: The Dow took a big dump out the gate Tuesday morning but battled back to finish with a tall hammer-type candle, though without a trend, it's not particularly meaningful.  The indicators are in no-man's land, the stochastic is threaded out, and there's a general lack of direction here that's just leaving me scratching my head.

The VIX:  The VIX gave us a doji on Tuesday too.  And with RSi moving higher but the stochastic headed lower, this chart is no more informative than the Dow.  Consider that the VIX has touched 13.28 for 12 of the last 14 sessions and you can see the rut we're in.

Market index futures: Tonight all three futures are higher at 12:31 AM EST with ES up by a healthy 0.47%.  We remain in a weak uptrend but the overnight action is definitely encouraging and has already given us a bullish stochastic crossover.  This is probably the clearest chart of the lot tonight and it's now looking vaguely bullish.

ES daily pivot: Tonight the pivot drops from 1760.08  to 1757.00.  We broke above the old pivot earlier this evening and are now even higher above the new one, so this indicator now looks positive.

Dollar index: The dollar remains quite overbought and just completed a bearish stochastic crossover on Tuesday, so I'd say it's headed lower..

Euro: Meanwhile the euro is still finding support at 1.3473, remains quite oversold, and has just formed a bullish stochastic crossover, so it looks good to move higher from here.

Transportation: And we end with more ambiguity as the trans gave us a harami hanging man on Tuesday with RSI headed lower but the stochastic completing a bullish crossover.  No clue...


Accuracy (daily calls): 

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
November   1      2      0           0        0.5333     3

     And the winner is...

It's not often you see so many ambiguous charts all at once but this is one of those nights.  Interestingly, we're seeing some unusual buying activity in ES this evening with 5,560 contracts going through in the 10:35 PM 5 minute bar and another sudden burst of over 9,300 in one minute at 11:30 PM.  Normal volume at this time of night is usually no more than a few hundred contracts and often only a few dozen per 5-minute bar.

I don't know what's going on here but someone must know something so in the absence of otherwise outright bearish signs, I'm going to go with that and call Wednesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $100,000 as we wait for the right moment to enter our first trade of the year.  While I do think we're going lower on Friday, I still don't have a good enough edge to warrant going short just yet, so we'll just stand aside again.  There's no rush.

Tuesday higher

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

• Tuesday higher, low confidence..
  
• ES pivot 1760.08.  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

With little in the way of economic news out on Monday Mr. Market kind of took a nap, with the Dow ending all of 24 points higher on a low-range low-volume day.  By the time it was all over, I had made a grand total of $67 in my trading account.  Will things get a bit more exciting on Tuesday.  We send Mr. Market to Dr. von Chart to find out.

The technicals (daily)

The Dow: A small spinning top here indicates indecision but its position higher than Friday's harami suggests further upside.  This is supported by a stochastic about to form a bullish crossover from a high level.

The VIX:  My comment here last night was "continued downside Monday" and that's just what we got, down another 2.64%.  That was enough to just barely crack support at 13 and with indicators continuing lower, I'd say the downward move isn't over yet.

Market index futures: Tonight all three futures are essentially flat at 12:54 AM EST with ES and NQ up just 0.01% and YM down by 0.01%.  Monday's nice green marubozu did confirm Friday's doji though and we now have a completed bullish stochastic crossover.  So it looks to me like ES wants to retest 1768.

ES daily pivot: Tonight the pivot rises from 1754.33  to 1760.08.  We remain above the new pivot so this indicator remains bullish.

Dollar index: Last night I wrote "what goes up must come down". And sure enough, the dollar ended its four day exponential rally on Monday with a 0.21% loss on a bearish harami.  Indicators are still way overbought and the stochastic is about to form a bearish crossover so I'd say there's more downside to come.

Euro: And correspondingly the euro put an end to its inverted exponential waterfall on Monday with a nice little hammer.  There's no follow-through in the overnight though and we're still in a declining RTC so it's not clear that the euro can advance any from here on Tuesday.

Transportation: Last night I commented on a bullish stochastic crossover from a high level here but wouldn't commit to it.  Now I wish I had, because we jumped 1.16% on Monday to give us two white soldiers.  And it looks like they're busy recruiting a third for Tuesday.


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
November   1      1      0           0        0.500     24

     And the winner is...

The charts certainly aren't a screaming buy right now but the positive glimmers I saw last night are a bit stronger tonight so once again it looks like the logical call is for Tuesday 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.

Monday higher

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

• Monday higher, low confidence..
  
• ES pivot 1754.33.  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

I based my call for Friday going higher on whether ES broke above its pivot or not.  Since that didn't really happen I'm just going to count this as a miss.  Oh well - there's plenty of time to catch up.

The technicals (daily)

The Dow: Friday's candle was a bullish harami but with the indicators still overbought and no RTC to guide us, this chart is too tough to call for Monday.

The VIX:  The VIX lost 3.42% on Friday but stayed inside its now two week trading range. The only guidance here is from the indicators which support continued downside Monday.

Market index futures: Tonight all three futures are higher at 12:30 AM EST with ES up by a respectable 0.21%.  We got a big star on Friday causing the indicators to reverse course before even reaching oversold.  The stochastic in particular is gearing up for a bullish crossover so this chart now looks bullish.

ES daily pivot: Tonight the pivot dips from 1755.08  to 1754.33.  But we remain above the new pivot o that's bullish.

Dollar index: Wow - another big gap-up day for the dollar on Friday, this time gaining another 0.68% to just about hit its upper BB in a move that is now clearly going exponential.  With the indicators now highly overbought, I'm thinking that what goes up must come down.  This is definitely not the spot to go long the dollar..

Euro: And of course the euro is mirror-imaging the dollar, down big-time on Friday in a downward exponential that has driven the indicators to extremely oversold.  The overnight is close to the lower BB and forming a hammer.  From here I'd say a reversal has to be coming Real Soon Now.

Transportation: The trans outperformed the Dow on Friday, up 1.04% but still couldn't break past resistance at 7055.  We got a confirmation of Thursday's hammer but we also got a bearish RTC trigger.  However, the stochastic appears to be about to form a bullish crossover from a high level and those are often good for a day or two of further upside.  Overall though, this chart is too tough to call.


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
November   0      1      0           0        0.000      0

     And the winner is...

Hmm, there's an uncommon lot of ambiguity about the charts tonight.  But my thinking right now is primarily affected by the VIX, the futures, ad the NYSE A/D line which began moving off its lows on Friday.  So I'm going to go out on a limb and call 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.