Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1776.92.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

The technicals worked out nicely on Thursday as the Dow slid another 104 points to extend its losing streak to three.  Will Friday make four?  We now pray, as we do every night, to the Chart Gods for inspiration.

The technicals (daily)

The Dow: With Thursday's drop, the Dow now has a new descending RTC going and three black crows to boot, roosting just below the lower BB.  But the indicators are still not yet oversold and there's no sign of a reversal here.

The VIX:  Last night I wrote " I think any move higher is limited.".   And the VIX was indeed up just 0.78% on Thursday with a candle that was part spinning top, part inverted hammer.  But any way you slice it, with two days now on its upper BB and indicators just short of overbought, the VIX is now looking toppy.


Market index futures: Tonight all three futures are higher at 12:15 AM EST with ES up by a non-trivial 0.20%.  Last night of ES I wrote "further downside is now limited" and we did in fact see the selling abate on Thursday with a stubby spinning top that pushed indicators close to oversold.  The overnight candle is developing as a bullish piercing line after bouncing off the lower BB.  So I'd say at this point this chart is looking bullish again.

ES daily pivot: Tonight the pivot drops once again from 1789.33  to 1776.92.  That dump coupled with a rising ES in the overnight finally puts us back above the new pivot so this indicator has now turned bullish again.

Dollar index: Interesting development with the dollar on Thursday as it busted out of an eight day descending RTC with a 0.27pop for a bullish setup.  A bullish stochastic crossover is now complete and indicators are still oversold but appear to have bottomed so this chart looks ready for higher on Friday..

Euro: Last night I wrote "I'd say a move lower is coming very soon."  Well was Thursday soon enough?  The euro posted its biggest loss in two weeks and just exited its rising RTC for a bearish setup.  Indicators remain highly overbought and a bearish stochastic crossover is now complete so I'd say this one's locking lower for Friday.

Transportation: I was a bit too pessimistic on the trans last night as they put in a nice little spinning top on Thursday with indicators now clearly oversold and the lower BB providing support.  So right now this chart is looking ready to move higher.

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   27/46  21/42

 47 11/18       52         30        +      +   1798 

 48 11/25       58         29        +      +   1805

 49 12/2        56         26        +      +   1806

 50 12/9        55         30        +      +   1805

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, and so that was correct.  However, the poll as a whole was in a dead-tie, so that makes it a push.  Therefore the Night Owl continues the year with an accuracy of 27 for 46, or 59%.   The poll as a whole  remains at 21 for 42 or 50% - it continues to be a tough year for the poll so far.  And time's up for 2013 calls.  Right now the calls are all for 2014.

This week both I and the poll as a whole once again voted bullish with bullish sentiment barely budging and bearish up a few points.  That's how it looked to me at the end of last week, though I must say I'm seriously considering switching my vote to bearish for next week's poll as it's looking like Mr. Market is running out of gas at these levels.

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   4      3      2           0        0.571    282

     And the winner is...

There are now some pretty good indications of a reversal in the technicals tonight, as much as I dislike calls bottoms (or tops), logic simply dictates a call of Friday higher.  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 lower, low confidence.
  
• ES pivot 1789.33.  Holding below is bearish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last night I wimped out in the face of mostly bearish signs because not all the stars were in alignment.  The conservative approach in this case proved to be wrong as the Dow suffered it biggest drop in a month.  Oh well - no harm done.  No let's see if we can be more decisive for Friday.

The technicals (daily)

The Dow: The accelerating losses in the Dow on Wednesday gave us a new bearish RTC crossover before ever hitting overbought indicators.  Some support at 15,815 but more downside looks likely from here.

The VIX:  A huge (and unexpected, by me anyway) 11% spike in the VIX, its biggest since October 15th, popped it right back up over its 200 day MA and formed a bullish stochastic crossover.  In fact it closed above its upper BB and right on resistance at 15.42.  While more upside is not impossible from here, I always say the VIX rarely spends more than a couple of days at its upper BB so I think any move higher is limited.

Market index futures: Tonight all three futures are lower at 1:40 AM EST with ES down by 0.81%.  Like the other charts, ES had a big red marubozu on Wednesday.  This one knocked it right out of its rising RTC - that trend is now over - and gave us a bearish stochastic crossover.  But the overnight has exactly hit the lower BB and bounced off, so there may be some support here on Friday.  I'd say further downside is now limited.

ES daily pivot: Tonight the pivot drops from 1805.17  to 1789.33.  We remain below the new pivot so this indicator remains bearish.

Dollar index: The dollar continued lower on Wednesday putting in a second hammer and driving the indicators highly oversold as we continue riding the lower BB downward.  Not really any sign this one is over either.

Euro: The euro just keeps moving higher though indicators are now extremely overbought (RSI=98.5) as we continue climbing the upper BB.  But that resistance at 1.3800 remains intact and with a developing doji in the overnight, it's not clear the euro has any gas left in the tank.  I'd say a move lower is coming very soon.

Transportation: The trans took a big 1.60% hit on Wednesday in a move that looks like it's going negative exponential.  It was enough to form a bearish stochastic crossover, drive the indicators oversold and hit the lower BB all in one.  Still, this big red marubozu is hardly a reversal candle, so there could be more downside to follow.


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   3      3      2           0        0.500    178

     And the winner is...

Wednesday's sell-off looks overdone to me but in the absence of any bullish reversal signs the only logical course is to call 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 1805.17.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

I did mention the possibility of an evening star forming last night but decided to ignore it because the indicators were nowhere near overbought.  Oops.  That was a mistake.  Fortunately we don't need to be right every time to still make money.  So we simply move on to Wednesday.

The technicals (daily)

The Dow: Though not a classic evening star Tuesday's red marubozu confirmed Monday's inverted hammer and put an abrupt end to a developing trend..  Though still not overbought, this chart has now turned bearish.

The VIX:  I also missed the VIX last night.  It looked bearish technically but on Tuesday it gained 3.11%, albeit on a red candle.  But the indicators continue to fall off overbought - go figure.  There's also no RTC right now and this is no pattern I recognize so I'll just have to admit this chart is too tough to call.

Market index futures: Tonight the futures are mixed at 12:38 AM EST with ES up by a scant 0.04% YM up all of 0.01% but NQ down 0.04%.  Overall, things are fairly flat in the overnight but the failure of ES to  capitalize on Monday's gains and touch its upper BB is a bearish sign. We also closed just outside the rising RTC on Tuesday for a bearish setup and the stochastic appears poised to make a bearish crossover very shortly.  So this chart now looks bearish.

ES daily pivot: Tonight the pivot dips from 1808.42  to 1805.17.  We are now below the pivot for the first time in a few days, so this indicator turns bearish.

Dollar index: At least I got the dollar right when I wrote "lower looks likely again" last night as it lost another 0.22% on a gap-down spinning top.  We continue to hug the lower BB and remain in a steep descending RTC.  There's at least a warning of a reversal now but one which requires confirmation.  Overall though, this chart continues to look bearish.

Euro: I also called the euro last night, writing "this upward  move still has a ways to go, possibly all the way to resistance at 1.3800".  And what was Tuesday's high? 1.3796.  Bada-bing!  So with that target now out of the way with an inverted hammer and indicators now highly overbought, it looks like the next move is lower.  So far the overnight isn't rejecting that idea, down just 0.03%.

Transportation: The trans' 0.73% loss on Tuesday provided a quick exit to a short rising RTC.  But the indicators are still well short of overbought.  There's no classical pattern that this matches, so I'm taking a pass on this chart too.


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   3      3      1           0        0.500    178

     And the winner is...

I don't know - we do have some bearish signs out and about tonight but I'd feel a lot happier calling Wednesday lower if the indicators were a bit more overbought.  We also have some news tonight that the Washington Clowns have apparently reached some sort of budget deal and that might move things higher.  So all in all, I think I'm just going to call Wednesday 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.

Tuesday higher

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

• Tuesday higher, low confidence
  
• ES pivot 1808.42.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Well we did close higher on Monday but it was pretty much what you'd expect after such a big move last Friday as Mr. Market took a pause to catch his breath.  Will he get his second wind on Tuesday?  Let's check the charts and see.

The technicals (daily)

The Dow: Monday's Dow candle was an inverted hammer but it isn't supported by the indicators which are still only just barely off oversold.  The stochastic has also just completed a bullish crossover so I'd take this reversal warning with  grain of salt.  Still it's questionable whether the Dow can resume its advance so soon after last Friday's big move.

The VIX:  Last night I wrote "there's still room to run lower on Monday." and run it did, down another 2.18%.  The candle was mostly bearish engulfing and the indicators are now clearly moving towards oversold.  The VIX shows no interest in filling Friday's big gap down and with the lower BB way down at 11.6, I'd say the downside is still not over.

Market index futures: Tonight all three futures are higher at 12:18 AM EST with ES up by 0.07%.  On Monday ES gave us a stubby gap-up spinning top vaguely reminiscent of an evening star.  But the indicators are not yet overbought and the overnight is continuing higher.  With no resistance now til the upper BB at 1816 and a new rising RTC established I see no technical signs of a move lower on this chart.

ES daily pivot: Tonight the pivot rises again from 1798.42  to 1808.42. And like last night we remain above the new pivot, though only by two points this time.  But so far ES is showing no interest in attacking it, so this one remains bullish.,

Dollar index: Last night I wrote "I'm not too optimistic on this one" and that pessimism was rewarded with a 0.22% drop on Monday.  That was enough to drive the indicators oversold and keep us inside a descending RTC as we dribble down the lower BB.  I see no reversal signs here, so lower looks likely again.

Euro: Last night I wrote "continued higher looks likely" and that's just what we got on Monday.  All the factors in place last night are still there tonight and the new overnight is already up another 0.13% so it looks like this upward  move still has a ways to go, possibly all the way to resistance at 1.3800.

Transportation: Last night I wrote "this chart now looks bullish", and so it was, up another 0.35% and handily outperforming the Dow on Monday.  So now we have two white soldiers, an upper BB at 7285, no resistance til 7257, a completed bullish stochastic crossover, rising indicators, and a new rising RTC.  I'd say this sure looks continued 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    7      5      8           2        0.643    674
November   6      6      2           1        0.538    123
December   3      2      1           0        0.600    230

     And the winner is...

The technical situation tonight is at least as bullish as it was last night and mostly for the same reasons so the logical call is simply 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 1798.42.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

How do you like that?  Last Thursday night I wrote "break out the thorazine" and it looks like Mr. Market took his does because all of a sudden on Friday, good news was good news (imagine that) and the Dow had its best day in a month.  Very interesting...  So let's see how this development changes the technicals as we run down the charts for Monday.

[Note: once again, Blogspot's spell checker seems to be on strike (for a higher minimum wage no doubt) so I apologize in advance for any typos].

The technicals (daily)

The Dow: After a pretty glum week, the Dow went out with a bang last Friday with a jolly green marubozu that blasted it right out of its descending RTC for a bullish trigger, caused RSI to bottom convincingly on oversold, and formed a bullish stochastic crossover.  So this chart is now looking bullish.

The VIX:  Last Thursday night I wrote "I really can't believe the next move is anything other than lower.".  And on Friday the VIX had clearly had enough.  The VIX rarely spends three days around its upper BB, and last week's four days was highly unusual, leaving the VIX ripe for a fall.  And fall it did, crashing right back through its 200 day MA on a big gap down for an 8.55% loss and a bearish stochastic crossover.  But even that still left it overbought.  So I have to think that even at 13.79, there's still room to run lower on Monday.

Market index futures: Tonight all three futures are higher at 12:18 AM EST with ES up by 0.15%.  Friday's big ES pop ends the latest descending RTC and formed a bullish stochastic crossover but the indicators are still nowhere near overbought and the upper BB is way up at 1816 so this chart looks like it's got more upside available.

ES daily pivot: Tonight the pivot jumps from 1786.75  to 1798.42.  Despite this move, ES still remains a good 10 points above the new pivot, so that's continued bullish.

Dollar index: Last Friday the dollar attempted some retracement of Thursday's big dump but to no avail, settling for a red spinning top at the base of Thursday's marubozu.  We're now sitting just off the lwoer BB but indicators are not particularly oversold and we've yet to get a bullish stochastic crossover, so I'm not too optimistic on this one..

Euro: And on Friday the euro continued climbing its upper BB, a move that continues in the overnight.  While the indicators are now fairly overbought, I see no real reversal signs here just yet, so continued higher looks likely.

Transportation: Pretty much the same story as the Dow here: bullish RTC exit, bullish stochastic crossover, and RSI bottoming.  So with not even any resistance until 7215 this chart now looks bullish too.


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   2      2      1           0        0.500    225

     And the winner is...

A big move like we had on Friday practically begs for retracement but I'm not so sure we'll see it on Monday.  The charts are all looking reasonably bullish now so the logical call is for 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.