Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1801.25.  Holding above is bullish.  (Now running the "H" contract).
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Ho hum - I'm glad I called Thursday as ":uncertain" because the Dow was up 11 and the SPX was down 1, that's about as uncertain as it gets.  I wrote "I think we could be in for a doji day" and that's what we got.  Since I'm taking a Christmas vacation all next week, this will be my last post until Sunday, December 29th.  I wish all my readers a merry Christmas.  Take some time to be with the ones you love, and tell them you love them, because the time will come when you're no longer able to.  And with that jolly thought, let's hit the charts once again as 2013 grinds to a close.

The technicals (daily)

The Dow: With its small gain, the Dow formed a little spinning top on Thursday.  But not having yet hit the upper BB and with the indicators still not quite to overbought, this reversal indicator require confirmation.  So this chart is too tough to call.

The VIX:  And on Thursday the VIX formed a fat hammer.  But like the Dow, the other confirming factors like indicators and BB's are not present, so we have to take a pass here too.  Thursday's 2.54% gain might simply be a DCB.  I'll also note that the 200 day MA is now directly overhead and with the indicators continuing lower, this lowers the odds of a further rise in the VIX.  We'll see.

Market index futures: Tonight all three futures are higher at 1:18 AM EST with ES up by 0.17%.   On Thursday ES, like just about everything else, put in a doji at the top of Wednesday's big gains.  While the overnight is positive, it still has to break above resistance at 1805.  RSI has just now gone overbought but the stochastic is still a ways from a bearish crossover and the upper BB is now at 1814, so it's not out of the question for ES to move at least a bit higher form here.

ES daily pivot: Tonight the pivot rises from 1790.75  to 1801.25. That still leaves ES above the new pivot so this indicator continues to be bullish. 

Dollar index: On Thursday the dollar gapped up big time, up a monster 0.67% for a bright shining evening star.  The last three times we saw this, the dollar was lower the next day.  And with RSI now officially overbought, I'm thinking that will be the case here too..

Euro: Similarly, the euro gapped down on Thursday and officially went oversold.  But the stochastic isn't yet in position for a bullish crossover and the lower BB is still miles away.  And with the overnight now down another non-trivial 0.16%, it looks like the euro's not done going lower yet.

Transportation: And finally, yet another doji with the trans, down just 0.01% on Thursday.  But it's the same story here too - no overextended indicators or other extremes.  So while this is a reversal warning, it's one that requires confirmation.  I'm not touching this one.


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   5      5      4           0        0.500    160

     And the winner is...

With all the dojis around tonight the cautious thing would be to simply call Friday uncertain.  But given the lack of outright bearish signs and the fact that we're not really badly overbought yet, I'm going to go waaay out on a limb and call Friday higher.  See you again Sunday after next!

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 uncertain

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

• Thursday uncertain.
  
• ES pivot 1790.75.  Holding above is bullish.  (Now running the "H" contract).
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Holy moly!  The dreaded Taper took place and it turns out Mr. Market liked it.  And boy did he like it - with the Dow blasting up 293 points for its biggest gain in three months and another record high.  And my REIT's participated in the action too giving my my best day since September 18th.  Ho ho ho! Now that that's out of the way, perhaps we can return to the technicals to see where Thursday's headed.

The technicals (daily)

The Dow: You can say it was news driven, but the RTC technique played out perfectly here.  On Monday, the Dow broke out of its descending RTC for a bullish setup.  On Tuesday, it traded entirely outside and that was the trigger.  And of course, Wednesday brought the payoff.  After such a big gain and having nearly touched the upper BB, I'd say that while Thursday's not necessarily looking lower, we probably don't have much upside to go here.

The VIX:  And of course the movement of the VIX on Wednesday was just as dramatic as the Dow, only to the downside.  The VIX dropped nearly 15% in one day and crashed right through its 200 day MA, completing a bearish stochastic crossover in the process.  And even at that, we're still overbought.  So it looks like there's more downside to come.

Market index futures: Tonight all three futures are lower at 12:23 AM EST with ES down by 0.19%.  This is perhaps to be expected after ES rallied hard on Wednesday all the way to its resistance at 1805.  After a big move like this, I'd expect a pause or a bit of retracement.  But I'm also thinking ES is going to check out its upper BB, now at 1811, pretty soon.

ES daily pivot: Tonight the pivot jumps from 1781.58  to 1790.75.  Note that tonight we are switching to the 2014 "H" ES contract.  We've been above the pivot since the Fed announcement and remain well above the new pivot, so this indicator remains bullish.

Dollar index: The dollar ended up little changed on Wednesday with a spindly doji.  With no real RTC going right now and the indicators wandering around halfway between oversold and overbought, I've got no way to call this chart.

Euro: The euro put in a similar long-legged doji on Wednesday but the new overnight is gapping down big time, off 0.69%.  A lower close looks likely here on Thursday.

Transportation: After a dip on Tuesday, the trans roared upward like everything else following the Fed news on Wednesday.  That sends the indicators off oversold and on their way to overbought.  No resistance til 7228, so there's more upside left here.


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   5      5      3           0        0.500    160

     And the winner is...

With the Fed uncertainty finally out of the way, it looks like the technical signs are bullish tonight.  However after running so hard so quickly, Mr. Market may need to pause to catch his breath on Thursday.  I think we could be in for a doji day, so accordingly I'm going to call Thursday uncertain.  I'm not expecting a big move either way.

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, low confidence.
  
• ES pivot 1781.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Oh great - so two nights ago I said the market would go lower, and so it went higher.  Last night I said it would go higher, so of course it went lower.  Not by much of course but it's still a miss.  Arrgh!  We now come to Wednesday, the inflection point of the week with what will be perhaps the biggest Fed announcement of the year.  Since I ordinarily call Fed days as uncertain as a matter of course, I will cut to the chase and announce that that's what I'm doing again.  Accordingly, we omit the chart-by-chart rundown tonight as superfluous.

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   27/47  21/43

 48 11/25       58         29        +      +   1805

 49 12/2        56         26        +      +   1806

 50 12/9        55         30        +      +   1805

 51 12/16       30         43        +      -   1775

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 both I and the majority of the poll voted bullish four weeks ago, so we were both wrong.  Therefore the Night Owl continues the year with an accuracy of 27 for 47, or 57%.   The poll as a whole  drops to 21 for 42 or 49% - it continues to be a tough year for the poll so far, with just one more 2013 call to go.  And in fact right now the calls are all for 2014.

This week we find a significant drop in bullish sentiment and rise in bearish sentiment as the majroity shifts bearish.  Perosnally though I continue to vote bullish because I'm still not seeing the sort of reversal signs that would lead me to switch my vote.  I could be wrong.

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   5      5      2           0        0.500    160

     And the winner is...

OK, so while I'm officially calling Wednesday uncertain, I'll admit I've still looked at the charts and the bias I'm seeing is higher.  I don't know how they know this, but someone apparently is figuring the taper is on hold for December.  We'll see, as this crazy week rolls on.

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 1779.75.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Wow - well I sure wasn't expecting a 192 point pop in the Dow on Monday - that one just came out of the blue.  Of course since I'm always net long, all that was hurt was my pride, but still.  What further surprises may this week have?  Maybe we can dig up some dirt in the charts.

The technicals (daily)

The Dow: I was far too conservative last night about the Dow's doji off the lower BB.  Turns out to have been an excellent reversal sign, and one that drove the Dow right out of its descending RTC for a bullish setup and also gave us a bullish stochastic crossover.  So this chart has now turned bullish.

The VIX:  At least I called the VIX correctly when I wrote "there could be more upside potential from here" because the VIX gained 1.71% on Monday in a move that keeps pace with a rising upper BB.  That now makes four in a row of touching the upper BB.  And with indicators now coming off overbought and a stochastic leveling off for a bearish crossover, I'd say that further upside is now quite limited and the VIX is due to go lower Real Soon Now.  A drop in VVIX on Monday with a hanging man supports this idea.

Market index futures: Tonight all three futures are ever so slightly higher at 12:43 AM EST with ES dead flat and YM up just 0.07%.  Monday's big move in ES took it right to the edge of its descending RTC for a bullish setup and gave us a bullish stochastic crossover so this chart now turns positive.

ES daily pivot: Tonight the pivot steps up from 1776.50  to 1779.75.  With ES trading sideways in the overnight we remain above the new pivot so this indicator now turns bullish.

Dollar index: Last night I wrote that the dollar "wants to retrace some of last Thursday's big gains" and that's what it did, down 0.15% on Monday almost totally erasing that pop.  But with a green candle and rising indicators the momentum now swings to the up side so now I'm looking for a move higher on Tuesday.

Euro: The euro tried to make a big move on Monday but was pulled back to end with small gains.  It's making another run on resistance at 1.3769 right now but with indicators remaining quite overbought and no distinct RTC for guidance, I'm not sure it can really push much higher right now.

Transportation: Last night I wrote "this chart is looking at least a bit bullish", and so it was, with a big 0.91% bit to the upside on Monday.  A complete bullish stochastic crossover reinforces that there's more gains to come.


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   5      4      2           0        0.556    169

     And the winner is...

It's admittedly going to be a fairly crazy week but the technicals now seem to be lining up on the plus side.  So I may regret this, but I will now officially make a call of 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 lower

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

• Monday lower, medium confidence.
  
• ES pivot 1776.50.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Last Friday the Dow managed to eke out some meager gains after three ugly red candles in a row.  Does this mean Santa's on his way?  Let's run down the charts to see who's been naughty or nice.  With both op-ex and a Fed announcement, it should be an interesting week ahead.  It's also going to be my last week of the year as I plan to take next week off for the holiday.

The technicals (daily)

The Dow: On Friday the Dow arrested its week of losses with a little green spinning top sitting on the lower BB as indicators continued to decline towards oversold.  It's now a reversal warning but one that requires confirmation.

The VIX:  Meanwhile, the VIX defied expectations by putting in a 1.42% gain on a bullish engulfing candle to close right back to its upper BB.  With indicators still not yet up to overbought, there3 could be more upside potential from here.

Market index futures: Tonight all three futures are lower at 12:24 AM EST with ES down by a significant 0.49%.  ES put in an inverted hammer last Friday but the overnight doesn't seem to be confirming that.  In fact we're right back to the lower BB which is falling away.  Not a good sign.

ES daily pivot: Tonight the pivot ticks lower from 1776.92  to 1776.50.  We spent Friday threading about the pivot but have now clearly broken lower, so this indicator is bearish.

Dollar index: On Friday the dollar put in a fat red spinning top in evening star position.  It's now giving the impression that it wants to retrace some of last Thursday's big gains.

Euro: The euro had a red spinning top of its own on Friday and the overnight seems to be confirming it, up a healthy 0.12% so far.  But with the indicators still just inside overbought, I'm not sure how much upside is available here on Monday.

Transportation: Last Friday the trans confirmed Thursday's doji and bounced off the lower BB.  With RSI now having bottomed at oversold and the stochastic moving into position for a bullish crossover, this chart is looking at least a bit 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   5      3      2           0        0.625    298

     And the winner is...

The charts are somewhat mixed tonight with a slight negative bias but I'm afraid Monday's going to be news-driven, the news being some disappointing PMI data from China (to the extent you can believe anything from the Chicoms).  That's already reflecting in ES so it looks like we simply have to call 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.