Friday lower

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

• Friday lower, low confidence.
  
• ES pivot 1829.67.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Sigh - I always hate starting off the year with a miss, let a lone a big miss but such was the case on January 2nd, 2014.  As far as I can tell what happened was that people who didn't want to take a capital gain in 2013 waited for the calendar to roll over so they could book some profits with the market at record levels.  I hadn't considered that because I'm not seeing any technical reversal signs so I wasn't considering selling.  But that was then, this is now.  So now that we finally have a full day of trading out of the way to prime the pump, let's see if we can generate any meaningful insights to Friday.

The technicals (daily)

The Dow: The big drop here on Thursday took the Dow right out of its rising RTC for a bearish setup and sent the indicators lower off their overbought peaks.  This doesn't bode well for Friday.

The VIX:  While the VIX did rise on Thursday, the gain was less than 4% and it came with a gap-up doji for an evening star as once again the 200 day MA proved too tough to crack.  This all suggests maybe a move lower.  But I note that we're still a long way form the upper BB and the evening star is not yet complete so a move lower Friday is not guaranteed.

Market index futures: Tonight all three futures are lower at 12:27 AM EST with ES down by 0.12%.  At least we now have some fresh data to work with. Like all the other charts, ES fell out of its rising RTC for a bearish setup on Thursday.  And its indicators have come off overbought and are now marching lower.  With ES itself continuing lower in the overnight, this chart looks bearish for Friday.

ES daily pivot: Tonight the pivot plunges from 1840.58  to 1829.67.  Even with that big drop, ES is still below the new pivot so this indicator continues bearish.

Dollar index: The dollar had a big 0.75% pop on Thursday with a gap-up doji for the mother of all evening stars, very nearly hitting its upper BB in the process.. However, this was accompanied by a bullish stochastic crossover and an RTC just rising off oversold.  The candlestick pattern looks compelling but it's not really complete yet, so I'm going to have to take a pass on this chart.

Euro: The euro took a big hit on Thursday dropping out of its rising RTC too for a bearish setup and completing a bearish stochastic crossover.  There's something of an attempt to stabilize in the overnight but it's not looking good.  The euro remains below its pivot and is nowhere near oversold yet.  This chart looks bearish.

Transportation: Finally, the trans were much worse off than the Dow on Thursday, losing 1.52% on a tall red marubozu that dropped them out of their rising RTC for a bearish setup.  Same deal as the Dow - same implications.

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   28/48  22/44

 49 12/2        56         26        +      +   1806   29/49  23/45

 50 12/9        55         30        +      +   1805

 51 12/16       30         43        +      -   1775

 52 12/23       38         29        +      +   1818 

 

 01 12/30       50         23        +      +   1841

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 last few calls of 2013 with an accuracy of 29 for 49, or 59%.   And the poll as a whole rises to just above break-even at 23 for 45 or 51%.   In three weeks we'll be able to fill in the remaining blanks for 2013 and come up with the final numbers.

This week we see that bullish sentiment took a big jump to 50% while bearish sentiment dropped to 23%.  While this is a pretty wide spread, it's by no means the biggest of 2013.  As for me, I continue to see no bearish technicals signs on the SPX weekly and monthly charts so I just continue to vote bullish.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    0      1      0           0       0.000     -135

     And the winner is...

The first two days of January are historically bullish but with the failure of day no. 1 this year and some pretty bearish looking charts I'm just going to have to call Friday lower.

ES Fantasy Trader

Portfolio stats:  the account continues the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.

Thursday higher

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

• Thursday higher, low confidence.
  
• ES pivot 1835.58.  Holding abive is bullish.
• Friday bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

I hope everyone had a happy New Year.  Tonight we say goodbye to 2013 and start off afresh for another trip around the sun matching wits with that wily old Mr. Market.  December certainly went out with a bang - now let's see if the January effect is anywhere to be found.

The technicals (daily)

The Dow: With a mid-week holiday, the natural ebb and flow of the markets is badly interrupted.  So we move out to the weekly chart and find, somewhat surprisingly, no bearish signs at all.  In fact we even have a newly completed bullish stochastic crossover there as we continue to ride the weekly upper BB higher.  No sign of a pull-back here.

The VIX:  The last VIX candle, from Tuesday was an inverted hammer that just touched the 200 day MA before retreating.  Though the indicators are not yet overbought, I consider this a bearish sign.

Market index futures: Tonight he market futures are still closed, so no guidance here.  Tuesday's pop did cancel the two preceding dojis though.  And we still have some room before hitting the upper BB.  We'll have to see where this leads.

ES daily pivot: Tonight the pivot remains at 1835.58.

We omit the remaining charts tonight as not particularly relevant.

Performance:

Here are my final performance stats for  2013.  I didn't do as well as last year and am a bit disappointed I didn't beat my benchmark, the Dow, although I can't really complain about a 23% annual return.  And in any case, with the Dow having a truly outstanding year and its best performance since 1995, the bar was set very high indeed.

My account was hurt by the underperformance of my sub-portfolio of REIT's which got absolutely hammered in 2013 every time someone even said the word "taper", which was often.  The ESFT suffered a few very large losses that proved the adage that "the trend is your friend" and when you ignore that, you pay for it.

For the record here is how my trading account has done: since I started keeping records

        Michele     Dow    IRA     ESFT
2007    -10.83%     6.43%
2008    -16.68%   -33.84%
2009     30.57%    18.88%
2010     31.99%    11.03%
2011     -0.01%     5.51%
2012     27.52%     7.29%  10.19% 93.50%
2013     22.94%    26.48%  11.24% 10.63%



Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    0      0      0           0       0.000       0

     And the winner is...

With a good fraction of the usual guidance missing toinght, I'm going to have to make this call partly on momentum and partly on history, and they both suggest Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account begins the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1835.58.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

That's one of the hazards of forecasting on holiday weeks.  The technicals looked ripe for a fall but the Dow managed to eke out a 0.16% gain on the penultimate day of the year anyway (thought the SPX did decline a bit).  So here we are - the last day of 2013 is upon us.  Once more into the breech, and then we take a day off.  So Happy New Year to one and all and here's wishing you a safe, happy and prosperous 2014!

The technicals (daily)

The Dow: Monday's gain might have only been 26 points, but it was enough to cancel last Friday's star, particularly since we remain in a rising RTC.  Indicators remain pegged on overbought but we've seen all year how that can just go on and on.  So in the absence of any other bearish signs, this chart resumes bullish.

The VIX:  At least I got the VIX right last night when I wrote "this one looks ready to move higher."  And it sure did, with a gap-up green marubozu good for a nearly 9% gain that broke out of the descending RTC for a bullish trigger to go with a completed bullish stochastic crossover.  So with the indicators just barely off oversold, it looks like there's more upside left here.

Market index futures: Tonight all three futures are virtually unchanged at 12:24 AM EST with ES dead flat and YM up a scant 0.02%.  Monday's red spinning top in ES took it outside its rising RTC for a bearish setup.  The new candle will be a bearish trigger unless ES can close above 1845 on Tuesday, which doesn't seem likely.  With resistance at 1837 intact, this chart continues to look like it wants to go lower.

ES daily pivot: Tonight the pivot inches down from 1836.58  to 1835.58.  That still leaves ES below the new pivot so this indicator remains bearish.

Dollar index: On Monday this head-scratcher of a chart gave up all of Friday's gains to finish almost exactly in the same place.  The failure to capitalize on Friday's big move plus indicators now marching lower suggests a lower dollar on Tuesday..

Euro: I did miss the euro though, which moved strongly higher on Monday, not lower.  So while RSI has now entered overbought, the stochastic has only just completed a bullish crossover.  But the euro now faces strong resistance around 1.3805 and is in fact moving lower in the overnight.  So I'm just going to call again for a move lower on Tuesday.

Transportation: Last night I wrote that the technicals "suggests a move lower Monday".  It wasn't a bad suggestion with the trans down just a bit on a nice star.  That makes two dojis in a row now and still leaves us highly overbought and right at the edge of the rising RTC.  This chart continues to look 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   6      6      2           1        0.538    123 December   6      6      4           0        0.500    176

     And the winner is...

While the technicals continue to look bearish, Tuesday is New Year's Eve and I'm sure the big players will have already departed for the Hamptons or their ski chalets in Aspen.  So I'm figuring a slow day which could end either way.  Therefore, I'll just end the year with a call of Tuesday uncertain.    See you again Wednesday night.

ES Fantasy Trader

Portfolio stats:  the ESFT is closed for 2013.  The account ends the year 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.  We'll reset to $100,000 on New Year's day and start over for 2014.

Monday lower

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

• Monday lower, low confidence.
  
• ES pivot 1836.58.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Ho ho ho!  I hope everyone had a merry Christmas.  We're back and it looks like Santa showed up right on time bringing loads of profits to all the good little traders, the Night Owl among them, having hit her high of the year just last Friday.  With the Santa rally wrapping up, the next obvious question is what of the January effect?  And with a second chopped up holiday week on a row coming up let's see if we can make any sense of it.  Speaking of sense, if I had any, I'd take this week off too.  I'm only here because it's the very end of 2013 and the start of a new year so it seems like I should show up.  So in the waning days of 2013, let's run down the charts once more.

The technicals (daily)

The Dow: It was quite a week for the Dow as it remains solidly inside a rising RTC while it climbs it upper BB.  The indicators are all broken at overbought now (RSI is 99.75).  The only  notes of caution here are the look of an exponential run-up and the doji on Friday suggesting a pause may be coming.  Year-end tax loss selling is also due to kick in (assuming it happens at all this year).  So I'd at least entertain the possibility of a down day here on Monday.

The VIX:  Supporting that notion is the VIX, which on Friday put in a small gain following a doji on Thursday.  It has now found support in the 12 area and bounced off its lower BB.  We also just got a fresh bullish stochastic crossover so this one looks ready to move higher.

Market index futures: Tonight the futures are mixed at 12:25 AM EST with ES down by 0.04% but NQ up by the same amount.  The overnight action is pretty trendless.  But Friday's candle was a perfect star that closed off the upper BB for the first time in five days.  With the indicators majorly overbought and no positive movement in the overnight, there's a suggestion here of a move lower on Monday.

ES daily pivot: Tonight the pivot inches up from 1834.67  to 1836.58.  That was enough to put ES below the new number so this indicator turns bearish.

Dollar index: On Friday the dollar put in one of these funny candles that's a tall green marubozu but still counts as a 0.14% loss because of a big gap down at the open.  These "backwards losses" are always tough to figure, and doubly so in a holiday-shortened week so I'm not touching this chart tonight..

Euro: Friday's euro chart was a bit less conflicted, giving us a tall inverted hammer whose tail pierced the upper BB.  After an attempt to move higher in the Sunday overnight, the euro has now fallen below its pivot and looks to be starting a dark cloud cover.  There's not much of an RTC here and the indicators are of little help but the rest of the evidence suggests a move lower on Monday.

Transportation: The trans, like the Dow are quite overbought now.  And on Friday they put in a hanging man that broke away form the upper BB.  That, plus highly overbought indicators suggests a move lower Monday.


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   6      5      4           0        0.545    202

     And the winner is...

Though Monday is historically bullish, that may not be the case this year as the charts are looking a bit toppy to me.  In fact, I see enough reversal warnings out there to call Monday lower.  Of course, it's another holiday-shortened week with the holiday in the middle so anything's possible, but that's just how the technicals look.

ES Fantasy Trader

Portfolio stats: I am now calling the ESFT closed for 2013.  The account ends the year 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.  We'll reset to $100,000 on New Year's day and start over for 2014.