Friday higher

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

• Friday higher , low confidence
  
• ES pivot 1786.75.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well contrary to my expectations, the market moved lower on Thursday as Mr. Market remains in his schizophrenic "good news is bad news" haze.  So let's just break out the thorazine and consider where Friday is headed.  Cheers!

The technicals (daily)

The Dow: On Thursday the Dow just laughed at Wednesday's big doji and  dove another 68 points to remain in a steep, narrow descending RTC.  While the indicators are now quite oversold, we no longer have a reversal candle at hand, so this chart isn't really looking bullish at all right now.

The VIX:  The VIX continues to confound, now having spent four full days at or above its upper BB.  This is very unusual, particularly since we're not facing any really earth-shaking news like (yet another) Greek default or a US default for that matter.  Just the same old same old taper talk.  And with RSI now at 100 for the second day in a row, I really can't believe the next move is anything other than lower.

Market index futures: Tonight all three futures are higher at 12:28 AM EST with ES up by 0.20%.   ES totally dissed Wednesday's giant doji by continuing lower on Thursday.  But RSI has now clearly bottomed and the stochastic is >< that close to forming a bullish crossover.  We also seem to be developing some upward momentum in the overnight with ES having already retraced half of Thursday's losses, so this chart is looking reasonably bullish now.

ES daily pivot: Tonight the pivot drops again from 1789.67  to 1786.75.  In a similar situation to last night, that drop puts ES back above the pivot, so it's bullish again.  And tonight it's reinforced by some upward momentum that was lacking last night.

Dollar index: At least I got the dollar nailed when I wrote last night "the next move here is likely lower" as the dollar suffered its biggest loss since September, down 0.48% on Thursday to close under its lower BB.  With indicators now oversold one would think most of the selling is over by now, but looking back at the herky-jerky action in this currency over the past year, who knows.

Euro: On the other hand, I missed the euro badly as instead of continuing sideways, it took a big pop on Thursday =, handily clearing resistance at 1.3739.and closing well above its upper BB.  That move, plus a 0.12% drop in the overnight so far suggests some retracement on Friday.

Transportation: There was at least a bit of encouraging new in the trans on Thursday, as they lost only 0.02% to the Dow's 0.43%.  This isn't technically a reversal and the indicators are still not yet oversold, but it does now appear that the selling pressure is abating.


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      2           1        0.538    123
December   1      2      1           0        0.333     26

     And the winner is...

I think last night's call was ore a matter of being a day early that outright wrong.  And tonight things are looking somewhat more bullish than they were last night so I'm going to go waaay out on a limb and call Friday higher.  With the caveat of course that this all depends on how the jobs numbers shake out - if they're really bad - or is it really good, this could all change.  Perhaps I should do something that makes more sense than this market, like investing in bitcoins (whatever the heck those are).  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 1789.67.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

It was sort of a wild ride on Wednesday - we were up, then we were down and finally the Dow finished with just a 25 point loss, but it didn't really play out the way I had anticipated with my conditional call so I'm counting that as a miss.  It works a lot of the time, but not always.  So now let's move on to Thursday.

The technicals (daily)

The Dow: On Wednesday the Dow put in a tall spinning top doji.  With the indicators now well into oversold territory this is a fairly good reversal warning.  Though we remain in the descending RTC, I'd not be going short at these levels.

The VIX:  On Wednesday the VIX put in an unusual candle with a tall spinning top doji that traded almost entirely above its upper BB.   That's our third close in a row above the upper BB.  Also RSI has now hit 100, the stochastic is within a hair of making a bearish crossover, and we just dropped out of the rising RTC for a bearish setup.  Oh yes, and we had some bearish divergence in VVIX, which fell while putting in a dark cloud cover.  So overall, the VIX now looks ready to move lower on Thursday.  

Market index futures: Tonight all three futures are lower at 12:16 AM EST with ES down by 0.04%.  Wednesday's long spindly doji in ES combined with now-oversold indicators and continuing support around 1793 now point to the possibility of a move higher by the end of the week.

ES daily pivot: Tonight the pivot drops from 1793.17  to 1789.67.  With a fairly flat ES in the overnight, that combines to put us back above the new pivot for the first time in a few days.  So this indicator now turns bullish.

Dollar index: On Wednesday the dollar gained all of 0.01% but did it on a very tall spinning top doji.  With such a big attempt at a rally rebuffed, and remaining inside the descending RTC, I'd just have to say the next move here is likely lower.

Euro: And a tall doji on the euro too which finished Wednesday virtually unchanged.  The euro really seems to like that 1.3589 level.  And in the absence of any other directional forces, I'd have to say that we're in for some more sideways action for a while.

Transportation: Pretty much the same story with the trans as everything else on Wednesday- yet another tall spinning top doji.  The indicators here are not quite down to oversold but the magnitude of the current pullback is now about the same as the previous one last month, so I would cautiously call the trans higher Real Soon Now.

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   25/44  20/41

 45 11/4        42         25        +      +   1762   26/45  21/42

 46 11/11       39         39        +      x   1771

 47 11/18       52         30        +      +   1798 

 48 11/25       58         29        +      +   1805

 49 12/2        56         26        +      +   1806

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 once again we were both right.  Therefore the Night Owl  continues the year with an accuracy of 26 for 45, or 58%.   The poll as a whole improves to 21 for 42 or 50% - it continues to be a tough year for the poll so far, with not much time left for redemption.

This week is little changed from last with both bullish and bearish sentiment decreasing just a couple of points, but the majority remaining decidedly bullish and that was my take on it last Sunday based on the weekly and monthly SPX charts.


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      2           1        0.538    123
December   1      1      1           0        0.500     94

     And the winner is...

On Wednesday the SPX Hi-Lo index ticked up from 80 to 83, a bullish sign.  The NYSE A/D line is also quite low now and its MACD seems to have hit a minimum, also a bullish sign.  Then we have the VIX looking ready to reverse.  And good old Dr. Copper put in a bullish engulfing pattern to break a long slide.  These signs, along with a veritable plethora of spindly dojis all make me think that we will close Thursday 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.

Wednesday higher only if ES pivot passed

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

• Wednesday higher only if ES breaks above its pivot, else lower.
  
• ES pivot 1793.17.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well, looks like my "toppy" feelings last night  played out on Tuesday with the Dow dropping 94 points.  Now after three down days  things get interesting.  Tonight the charts earn their keep for telling us where Wednesday may be going.

The technicals (daily)

The Dow: We are now officially in a new descending RTC - the previous up-trend is over.  Tuesday's solid red candle makes two black crows and with indicators  still only halfway to oversold, this chart continues to look bearish.

The VIX:  The VIX blasted right through its 200 day MA on Tuesday, surprisingly, but formed a red spinning top doing do.  It also closed way above its upper BB and is now fairly overbought.  Taken together, these signs all point to a lower VIX very soon, if not Wednesday then more likely Thursday.

Market index futures: Tonight all three futures are higher (for a change) at 12:18 AM EST with ES up modestly by 0.08%.  Tuesday's increased selling action in giving up the 1800 level drove the indicators oversold and left us right around support at 1793.  The stochastic seems to be trying to set up a bullish crossover but isn't there yet.  Meanwhile the overnight action seems to suggest some sort of bottoming in progress.

ES daily pivot: Tonight the pivot drops from 1801.92  to 1793.17.  That now leaves us just one tick below the new pivot, so the pivot is definitely in play tonight.  A bounce off would signal continued lower, but a break above would be bullish.  It's just too soon to tell right now.

Dollar index: Last night on the dollar I wrote "I'm more inclined to think it's going lower Tuesday.".  .And the evening star played out to perfection, with the dollar sinking 0.40% on a gap down that neatly covered Monday's gap up.  You've got to hand it to those old Japanese rice traders - the evening star is a high probability play.  But now what?  With a new spinning top right where we ended last week, it's not at all clear where the dollar's going next.  >Shrug< - we'll see.

Euro: Last night I knew one of my calls would be wrong and it was the euro, which completely retraced Monday's losses on Tuesday.  With indicators remaining overbought, we're now in a sideways consolidation that's too tough to call.

Transportation: Last night I wrote "I'm going to take a guess that this one may be going lower on Tuesday".  Good guess, eh, as the trans dropped nearly a full percent on a big red marubozu.  That caused RSI to peak, the bearish stochastic to continue, and a big RTC bearish trigger.  So this chart looks continued bearish now.


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      2           1        0.538    123
December   1      0      1           0        1.000     94

     And the winner is...

After a bit of a sell-off, I'm now seeing at least some technical signs that a reversal might be near but it's not clear it will be on Wednesday.  Accordingly, and given the proximity of ES to its new pivot, I'm going to make a conditional call: if ES can break above its pivot by mid-morning, we will close Wednesday higher.  On the other hand, if ES fails to break above the pivot, we close 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 1801.92.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last night I called Monday uncertain, and it was indeed that as the Dow wandered around indecisively most of the day - until about 3 PM when it took off decisively to the downside for a 78 point loss.  So where does this leave us for Tuesday?  Perhaps the charts will be more conclusive tonight than last.

The technicals (daily)

The Dow: While I was hesitant to assign too much importance to last Friday's half-day inverted hammer, Monday's comparatively large drop is of more concern and it knocks us out of the rising RTC for a bearish setup and confirms a bearish stochastic crossover.  With indicators remaining overbought, this chart now looks bearish.

The VIX:  I didn't think the VIX had enough gas in the tank to manage the 3.87% gap-up it put in on Monday.  But that also put it above its upper BB and like I always say, the VIX rarely spends more than a day or two at such levels before pulling back.  However, Monday's candle was not a reversal sign and the indicators are not yet overbought, so a bit more upside is possible.  Keep in mind though that we've got some resistance in the form of the 200 day MA right above at 14.37.  When the VIX tip-toes up to the MA, it often has trouble passing it.

Market index futures: Tonight the futures are mixed at 12:33 AM EST with ES up by 0.03% but YM down 0.07%.  Monday's drop in ES was bearish engulfing i a big way and also a bearish RTC trigger.  RSI has now peaked at overbought and we now have a bearish stochastic crossover.  So everything is looking lower from here.

ES daily pivot: Tonight the pivot falls from 1806.42  to 1801.92.  Even with that drop we remain below the new pivot so this indicator continues bearish.

Dollar index: I was very wrong indeed last night as the dollar put in a big 0.35% gap up on Monday in a move that was good for a bullish stochastic crossover and a bullish RTC setup.  However, the pattern is forming as a bearish evening star and the dollar often quickly fills big one-day gaps, so I'm more inclined to think it's going lower Tuesday.

Euro: And of course I was also wrong on the euro which put an abrupt end to its rising RTC on Monday for a bearish setup along with a bearish stochastic crossover.  The overnight is pretty flat  so far but the signs are now pointing lower for Tuesday.  Of course that guarantees that either this or my dollar call will be wrong but I can't help that.  Looking at the individual charts, that's just how they look to me.

Transportation: In a bit of bullish divergence the trans actually gained 0.25% on a day when all three major averages were lower.  But the candle was something of an inverted hammer.  On the other hand we're still in a rising RTC.  Overall, this is a tough chart pattern, but  we've got two reversal candles and overbought indicators, so I'm going to take a guess that this one may be going lower on 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   6      6      2           1        0.538    123
December   0      0      1           0        0.000      0

     And the winner is...

Despite a positive showing from the trans on Monday, everything else is looking rather bearish tonight so logic dictates a call of Tuesday lower.  I'll be happy to be proven wrong as I'm always net long.

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 uncertain

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

• Monday uncertain.
  
• ES pivot 1806.42.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

I hope everyone had a happy Thanksgiving.  Not much happened in the market, with mostly meaningless sideways action.  So as 2013 starts to wind down, let's see where Monday's headed.

The technicals (daily)

The Dow: Last week the Dow put in four consecutive dojis, but that's more a reflection of the holiday shortened week than anything else so I wouldn't read too much into that.  However, if we look at the weekly chart, we see extremely overbought indicators and a stochastic that just formed a bearish crossover.  The last two times we were here, the market then moved lower.  Momentum has also been falling for three weeks now.  Hmmm...

The VIX:  Unlike the other charts which were pretty blah last week, the VIX rose all week up 5.55% just last Friday.  That completed a bullish stochastic crossover but it also touched the upper BB so its not clear how much more upside is left here.  We're also real close to a good resistance line at 13.88 ad I'll note that VVIX has not been participating in this advance, so I'm dubious that the VIX has much upside left from here.

Market index futures: Tonight all three futures are modestly higher at 12:26 AM EST with ES up by 0.07%.  ES spent last week basically moving sideways, which ejected it from its rising RTC for a bearish trigger.    But with the chart distortions induced by the holiday week, I'd take this one with a grain of salt.  That said, the indicators are now highly overbought, but we've seen ES have the ability to stay that way for extended periods and still run higher.  So my best guess right now is that this chart is mildly bullish.

ES daily pivot: Tonight the pivot inches up from 1804.33  to 1806.42.  However, that's just enough to now place ES below the new pivot, so this indicator turns bearish.

Dollar index: The dollar is back in a downtrend as it continues to put in lower lows and lower highs.  With indicators not yet oversold, I see no signs of a reversal here..

Euro: After a big dump two weeks ago, the euro has been marching right back higher again though it's been struggling the past few days around the 1.3513 level.  However, with a healthy 0.15% gain in the Sunday overnight so far, we remain in a steeply rising RTC, so it looks like the uptrend continues.

Transportation: Last week the trans cleared their last resistance level at 7214 to close at 7236.  Indicators are now overbought and the stochastic is close to making a bearish crossover but we have yet to hit the upper BB and remain in a rising RTC.  Still, I'm getting a bit nervous about this chart as it's now looking a bit toppy to me.


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   7      6      2           1        0.571    131 

     And the winner is...

I'm getting some conflicted signals form the charts tonight, due in part to last week's low-participation action.  Because of this, I think the prudent course is to simply call Monday uncertain as we wait for a new candle to begin a full trading week, providing us with some better direction.

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.