Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1788.33.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well I guess the fourth time's the charm.  After attacking the 16,000 level for four straight days, the Dow finally managed to close above it, just barely.  I was somewhat surprised given that Wednesday's big drop looked like an admission of defeat but hey, it is what it is.  Needless to say, this changes the picture so let's see what the charts have to say about this for Friday.

The technicals (daily)

The Dow: After teetering on the brink of a bearish RTC exit on Wednesday, the Dow popped right back in on Thursday.  But our record close hasn't yet truly broken through the resistance around the 16K level so Friday will be make-or-break day.  Right now, the action of this week so far is trendless so I have no comment on this chart.  It's too tough for me.

The VIX:  And here is perhaps the key to the whole puzzle.  Last night I wrote "I'm thinking the VIX may actually be moving lower from here."   That was perhaps the one good thought I had all day as the VIX dropped 5.52% on Thursday.  Never discount the predictive power of the VIX.  So tonight, with Wednesday's spinning top confirmed, we've got a stochastic just about to make a bearish crossover.  And with no support til 12.41, I say this chart is going lower again on Friday.

Market index futures: Tonight the futures are mixed at 1: AM EST with ES down by 0.07%, YM down 0.03% but NQ up 0.02%.  Thursday's big jump in ES took it out of its descending RTC for a bullish setup.  We also now have a just completed bullish stochastic crossover.  But resistance around 1794 remains strong, so I'm not getting a good read on this chart tonight.

ES daily pivot: Tonight the pivot rises from 1782.83  to 1788.33. We remain above the new pivot, so this indicator is now bullish.

Dollar index: Like the Dow, the dollar took a most unexpected turn on Thursday, jumping right out of its descending RTC for a bullish setup.  It also completed a bullish stochastic crossover and the indicators came off oversold.  The overnight is continuing those gains, so I'd say the dollar is now looking bullish for Friday..

Euro: On the other hand, the euro already had its big tumble on Wednesday and instead gained a bit with a green spinning top on Thursday.  The overnight continues to trade higher but with mixed indicators and a trend end, this chart is too tough for me to call.

Transportation: Wow - what a difference a day makes.  The trans which were looking pretty grim last night came roaring back on Thursday to rocket out of their new descending RTC and stop the indicators dead in their tracks form their march towards oversold.  So this chart now looks bullish again - go figure.


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   6      6      1           1        0.538    123

     And the winner is...

It's not often we get a picture this murky from the charts but I'm afraid I'm just not seeing it tonight.  I also have a nasty cold which isn't helping  And I'm still somewhat stung from getting Thursday badly wrong so I'm just going to regroup and call Friday uncertain.  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

• Wednesday lower, low confidence.
  
• ES pivot 1782.83.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Renewed taper talk drove the markets lower on Wednesday so we chalk up another one in the win column.  Is this finally a trend change?  The charts can tell us - read on.

The technicals (daily)

The Dow: The Dow finally dropped out of a nine-day long trend, so that's a bearish setup.  The bearish stochastic crossover is also now complete and the indicators have peaked and begun moving lower from overbought.  So everything's pointing to more downside ahead here.

The VIX:  On Wednesday the VIX was virtually unchanged,, somewhat surprisingly considering the losses in the market.  And it came with a long-legged spinning top that just about touched its upper BB intraday.  Wednesday should have been the payoff for Tuesday's bullish RTC trigger.  That failure makes me wonder if the VIX is losing it mojo around 13.50.  Supporting that is a very unusual 7.25% drop in VVIX.  I'm thinking the VIX may actually be moving lower from here.

Market index futures: Tonight all three futures are lower at 12:26 AM EST with ES down by 0.18%.  After a third down day in a row on Wednesday, ES is now officially in a new descending RTC.  The overnight is continuing lower squarely within this channel and the indicators continue to move from overbought to oversold so this chart continues to look bearish.

ES daily pivot: Tonight the pivot drops again from 1787.00  to 1782.83. Nothing much new here - we remain below the new pivot so once again this indicator is bearish.

Dollar index: Last night I wrote "we have at least a warning that a reversal higher might be coming soon" and so it did in a big way with the dollar up 0.53% on Wednesday with a big green marubozu that ejected it right out of its descending RTC for a bullish setup.  This was also enough for a bullish stochastic crossover and a clear bottom in RTC.  So this one looks higher again on Thursday..

Euro: While I nailed the dollar, I blew it on the euro, which took a big dump on Wednesday crashing right out of its rising RTC for a bearish trigger.  This move was enough to take the indicators all the way off overbought and send the stochastic on its way towards oversold.  But we're not there yet.

Transportation: Last night I wrote "this one looks continued bearish for Wednesday,"  And it was like shooting fish in a barrel as the trans lost another 0.29%.  So with a new downward RTC now established and indicators still just barely off overbought, this one still looks lower for Thursday.

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   22/41  17/38

 42 10/14       48         22        +      +   1703   23/42  18/39

 43 10/21       57         30        +      +   1745   24/43  19/40

 44 10/28       59         19        +      +   1760  

 45 11/4        42         25        +      +   1762

 46 11/11       39         39        +      x   1771

 47 11/18       52         30        +      +   1798 

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 along with the majority of the poll so we were both right.  Therefore we continue the year with an accuracy of 24 for 43, or 56%.   The poll as a whole improves to 19 for 40 or 48% - it continues to be a tough year for the poll so far.

This week I voted bullish again for the 11th time in a row.  Apparently a number of other poll participants joined me as bullish sentiment rose to 52%, its second highest level of the year so far.  I'm afraid that on the weekly and monthly charts, I'm still not seeing any reversal signs.


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   6      5      1           1        0.583    232
 
     And the winner is...

All the bearish forces mentioned last night remain in place tonight and there are not yet any reversal signs on the horizon, so the call simply remains the same: 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 lower

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

• Wednesday lower, low confidence.
  
• ES pivot 1787.00.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well ES made a couple of half-hearted attempts to break above its pivot Tuesday morning, but it was not to be, and we did end the day lower.  But it was an interesting chart move so let's run through the usual suspects and see where Wednesday is headed.

The technicals (daily)

The Dow: The Dow dropped just nine points on Tuesday but it did so with a spinning top, the second in a row.  We remain in a rising RTC but with indicators remaining overbought and a completed bearish stochastic crossover I now think there's more downside risk than upside potential here.

The VIX:  Last night I wrote "I'm saying the VIX is going higher on Tuesday."   It doesn't get much plainer than that and the VIX did in fact gain 2.21%.  Not only that but it also gave us a bullish RTC trigger and with the indicators now rising off oversold and the upper BB still at 13.99, it seems likely that there's still more upside to come.

Market index futures: Tonight the futures are mixed at 12:29 AM EST with ES down by 0.04%, YM flat and NQ up 0.07%..  ES put in a second spinning top on Wednesday, sitting right below Tuesday's.  That left us right on the edge of the rising RTC and the overnight action is just outside it for a bearish setup. The bearish stochastic crossover is complete and indicators are now coming down off overbought so this chart csontinues to look bearish.

ES daily pivot: Tonight the pivot drops from 1791.08  to 1787.00.  That still leaves us below the new pivot, so this indicator remains bearish.

Dollar index: On Tuesday the dollar lost 0.10% on a spinning top as a bullish harami.. With indicators now oversold we have at least a warning that a reversal higher might be coming soon.

Euro: The euro remains in a tight rising RTC.  Indicators are now broken overbought and have lost their predictive power so there's nothing here to suggest anything but more upside on Wednesday.

Transportation: Last night I wrote "this chart is looking lower for Tuesday" and indeed the trans dropped a significant 1% after Monday's bearish dark cloud cover.  This dropped us right out of the rising RTC for a bearish trigger, reinforced a bearish stochastic crossover and so this one looks continued bearish for Wednesday,


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   6      5      1           0        0.545    166

     And the winner is...

The bearish signs I saw in the charts last night are still there, only tonight they're more pronounced.  In addition, I'm seeing weakness in both the NYSE A/D line and the SPX Hi-Lo index.  While the rising regression trend remains intact for the time being, all signs are pointing towards a close of 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 higher only if pivot passed

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

• Tuesday higher only if ES pivot passed by mid-morning, else lower.
  
• ES pivot 1791.08.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well I did say that Monday was a tough one.  And both the SPX and the Nasdaq did finish lower, apparently courtesy of some comments by Carl "Captain Obvious" Icahn to the effect that stocks could experience a "big drop".  But the Dow managed to hang in there and finish in the green, so that's a miss for me, though not by much.  Let's see how this latest wrinkle translates to Tuesday as we wend our way through November.

The technicals (daily)

The Dow: On Monday the Dow closed on its upper BB again with another new record despite Uncle Carl's attempt to rain on the parade.  But the result was a spindly spinning top.  And with the indicators now well into overbought, this one has to be taken a bit more seriously.  But without RTC or stochastic confirmation, I'm still not calling a top here.

The VIX:  The VIX confirmed Friday's spinning top by bouncing strongly off its lower BB on Monday in a move big enough to clear its descending RTC for a bullish setup.  We also got a bullish stochastic crossover so I'm saying the VIX is going higher on Tuesday.

Market index futures: Tonight all three futures are higher at 12:33 AM EST with ES up by 0.10%.  On Monday ES gave us a bearish almost-dark cloud cover and a bearish stochastic crossover.  But we remain in the rising RTC and the overnight is showing some resilience.  We've seen a number of these one-day fake-out breakdowns over the past two months, so I'm reluctant to call a reversal here just yet without some confirmation.

ES daily pivot: Tonight the pivot dips from 1792.00  to 1791.08.  After dropping below at 3 PM Monday, ES has been slowly drifting higher and in fact just mounted an attack on the new pivot.  It failed, but it seems likely we'll see at least one more before too long.  So while this indicator is now bearish, the pivot is very much in play here.

Dollar index: Last night I wrote "it looks like there's still lower to come" and so it did with the dollar gapping down to finish with a stubby green hammer and a 0.09% loss.  But we have no other confirmation from the RTC or the indicators, so the jury remains out on whether this signals a move higher Tuesday.

Euro: Last night I wrote "there's no resistance til 1.3519, so I expect the euro to take a look at that level on Monday." and that's just what it did, hitting an intraday high of 1.3543 before finishing at 1.3500 with a spindly spinning top.  However, the new overnight isn't confirming that, rising instead as the euro seems obsessed with that 1.3519 level.  So although RSI is extremely overbought now, we remain in a rising RTC and have no bearish stochastic crossover yet.  Therefore, it is too soon to call this one lower.

Transportation: Last night I wrote "Monday could be a topping day" and the trans indeed produced a fat red spinning top that topped out at 7245 before retreating to form a dark cloud cover.  It also gave us a bearish RTC setup and a bearish stochastic crossover.  So this chart is looking lower 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   5      5      1           0        0.500    166

     And the winner is...

Hmm.  Tonight we seem to have more spinning tops than FAO Schwartz.  And we've got futures that are refusing to roll over.  But we also have a VIX wanting to move higher so I'm going to make a conditional call: if ES can break back above its pivot in convincing fashion by mid-morning Tuesday, we'll close higher, else 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 lower

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

• Monday lower, low confidence.
  
• ES pivot 1792.00.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Quote of the Day

"Your winnings, sir."

"Financial market experts have long speculated that the $5.3 trillion-a-day foreign exchange market might be manipulated."

                      - USA Today news story, 11/17/13

What?!  The FX market is rigged?  I'm shocked!  Shocked, I say.


Recap

OK, so what happened last Friday?  Nothing particularly exciting - just another record close - ho hum.  Now you know they say that what goes up must come down.  Unfortunately, they never say when.  Will Monday be the day?  We now work over the charts until they cry Uncle.

The technicals (daily)

The Dow: The Dow just keeps on motoring higher with an 86 point gain that closed 20 points above its upper BB.  We now have three white soldiers marching uphill and although the indicators are oversold, they're still only just barely - so technically I still don't think this run is done.

The VIX:  Last Thursday night I wrote "with two black crows cawing away, I can't call this chart higher yet".   And it's good I didn't because the VIX dipped another 1.46% on Friday.  Now Friday's candle was a spinning top that closed on the lower BB, and I always say the VIX generally doesn't spend much time around its BB's - either upper or lower.  But this is just a reversal warning, and with the indicators still not particularly oversold, this requires confirmation on Monday.  A big bullish engulfing candle in VVIX admittedly does suggest that a higher VIX may be on the way soon.  On Monday?  Don't know.  This is a wait & see chart.

Market index futures: Tonight all three futures are lower at 12:35 AM EST with ES down by 0.13%.    ES closed Friday even higher above its upper BB than it did Thursday.  RSI is now quite overbought (at 92)and the stochastic has curved around for a bearish crossover any minute now.  So this chart no longer looks particularly bullish.

ES daily pivot: Tonight the pivot rises from 1784.67  to 1792.00.  Turns out we just fell below the new pivot as I write this, so unless ES can recover as the night wears on, this indicator now becomes bearish.

Dollar index: Last Thursday I wrote "The trend is quite choppy but still vaguely lower".  No manipulation here as the dollar continued its downward drift on Friday with a read marubozu that tightened up the descending RTC and left the indicators continuing lower.  So overall, it looks like there's still lower to come.

Euro: On Friday the euro rejected Thursday's spinning top and resumed its advance to remain in its rising RTC.  We remain above the pivot, the indicators aren't yet overbought and there's no resistance til 1.3519, so I expect the euro to take a look at that level on Monday.

Transportation: On Friday the trans made their winning streak six in a row, finally hitting their upper BB and sending the indicators overbought.  The stochastic though is still not quite in position for a bearish crossover and we do remain well inside a steeply rising RTC so it's too soon to call this one lower yet.  But Monday could be a topping day.


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   5      4      1           0        0.556    180

     And the winner is...

This is a tough one.  I'm beginning to see a few bearish signs in the charts that hint that a top is at hand.  Whether it lasts more than a day remains to be seen, but the futures and the VIX in particular seem to be suggesting a move lower.  The conservative call here would be "uncertain" but I think there's enough evidence to call for Monday 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.