Wednesday depends on ES pivot

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

• Wednesday higher only if ES remains above its pivot, else lower..
• ES pivot 2079.42.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader closed.

Recap

And so we come to the end of another trip around the sun.  One more day to call it a year and perhaps the trickiest one of all to call.  But we'll give it a shot anyway and see what's what.  Just a reminder, this is the last post of the week as I'm taking Friday off.  So a very Happy New Year to all and we'll see you again Sunday night.

The technicals

The Dow:  After three days of dojis, the Dow lost 55 points on Tuesday to trade outside its rising RTC for a bearish trigger.  Remember when RSI hit 100 last Friday?  Well that was that.  With all the indicators coming back to life and headed lower but still overbought, this chart looks lower.

The VIX:  After finding support right on its 200 day MA last week with a hammer, the VIX popped back to 15 on Monday and then rose another 5.71% on Tuesday but with a doji star.  Purely technically, this reversal warning is overshadowed by z newly completed bullish stochastic crossover and an RSI that has clearly bottomed and begun moving higher.  So there could me more upside here on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:57 AM EST with ES up  0.19%  But ES had a bad day Tuesday with its biggest loss since the 16th, falling out of its rising RTC for a  bearish setup.  Add falling indicators and a bearish stochastic crossover and this chart looks lower.

ES daily pivot: Tonight the ES daily pivot falls from 2083.50 to 2079.42.   That drop was enough to put us just above the new pivot, so this indicators is bullish.

Dollar index:  After hitting another multi-year high on Monday, the dollar took a break on Tuesday with a little hanging man, down 0.24%.  But the prevailing trend continues higher, though I'm not so sure about Wednesday.  We might see a bit more downside here.

Euro:  Meanwhile the euro has exited its descending RTC for a bullish trigger and peeled away from its lower BB.  The indicators remain highly oversold but have begun moving higher so with a star on Tuesday there's a decent chance of a higher euro Wednesday.

Transportation:  On Tuesday the trans traded outside their rising RTC for a bearish setup on a red spinning top.  Indicators remain highly overbought and resistance around 9234 seems to be holding for now so I'd say this one seems to have more downside risk than upside potential.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   5       3      6           1       0.600    241

     And the winner is...

Hmm - the last day of the year is historically bearish as the tax loss sellers do their thing and technically, all the charts are looking bearish tonight.  The only thing that bothers me is that the futures are all higher and I never like to go against the futures.  So I'm going to make a conditional call, given the proximity of ES to its pivot as I write.  IF ES can remain about its pivot by mid-morning Wednesday, we'll close higher, and if not, then lower.  That's all she wrote.  Happy New Year!

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  The ESFT is now closed for 2014 so those are our final numbers.

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 2083.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well Monday was just about what one would expect for the last Monday of the year - the Dow was down a bit, the SPX was up a bit, ho hum.  In fact I don't expect much action until Wednesday when the tax-loss sellers show up, assuming that is that they even do show up this year given the fact that we're going out on record highs.  But anyway, I'm thinking we'll see even less volume on Tuesday and therefore there's little point in trying to call the market either higher or lower..  So I will just save everybody some time, skip the chart by chart run-down, cut to the chase, and call Tuesday uncertain right here.


Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   5       3      5           1       0.600    241

     And the winner is...

 The technicals matter little for Tuesday.  By this point what we should be more concerned about is checking on the stores of champagne and caviar for Wednesday night.  So the call is simply Tuesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  The ESFT is now closed for 2014 so those are our final numbers.

Monday higher

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

• Monday higher, low confidence.
• ES pivot 2001.33.  Holding above is bullish.  Now running the "H5" contract.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

My my, Santa just kept right on delivering the toys as the rally marched on in a week that wasn't quite as boring as I'd expected, especially with the Dow crossing 18,000 for the first time.  I'm dating myself but I remember when it crossed one thousand for the first time.  So here we are facing the end of yet another year.  I'd take this week off too with another holiday on Thursday but I'd like to at least check on how things finally wrap up.  I won't bother posting Thursday night for Friday though.  But for now it's on to Monday.

The technicals

The Dow:  Last week the Dow continued a slow crawl into record territory on low volume that left all the indicators at extreme overbought levels.  How does 100 for RSI sound?  And Friday traded just outside the long rising RTC for a bearish setup.  Still, with the holiday last week and the end of the year upon us one must take these charts with a grain of salt.  Let's call it a reversal warning but one which requires confirmation.

The VIX:  Meanwhile the VIX continued its slide last week to find support exactly on its 200 day MA at 14.00.  Support continued Friday giving us a pair of doji stars.  With extremely oversold indicators and a stochastic in good position for a bullish crossover any time now, this one looks ready to move higher.

Market index futures: Tonight, all three futures are higher at 12:56 AM EST with ES up  0.08%  ES like everything else last week continued higher into record territory, hitting impossibly overbought levels RSI=99.68).  So the indicators are now all broken and useless.  We still have a tight rising RTC and the upper BB continues to float away, now at 2115.84.  So until I see a bearish sign, I guess I just have to think this one will continue higher.

ES daily pivot: Tonight the ES daily pivot rises from 2079.75 to 2083.83.  We remain above the new pivot so this indicator continues bullish.  Reminder - we're now (obviously) tracking the "H5" contract.

Dollar index:  The dollar spent last week in a holding pattern.  It did peel off its upper BB though and with highly overbought indicators, the next logical direction from here is lower.

Euro:  The euro tried to rally at the start of December but ultimately failed only to resume its march to the cellar and closing at 1.2185 on Friday.  On a monthly basis, that's the lowest close since April 2006.  With 2010 and 2012 monthly support now broken I'd have to say we're looking at a visit to a patriotic 1.1776 before too long.

Transportation:  The trans have been rallying steadily since the 12/17 bottom.  Although all the indicators are now as impossibly overbought here as everywhere else, there's no reason not to believe the trans won't take a look at their upper BB at 9285 on Monday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   5       2      5           1       0.750    256

     And the winner is...

Of course it's now the last week of the year and a holiday week at that and they can be tricky.  However, seeing no bearish signs on the charts tonight, all I can do is call Monday higher.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.  I think we're probably done for the year and I'm considering dropping this feature next year - I'm just not feeling the love.

Friday higher

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

• Friday higher, low confidence.
• ES pivot 2001.33.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Ho ho ho!  Looks like Santa showed up, right on schedule, delivering the Dow's best one day performance since the late Mesozoic with a whopping 421 point moonshot, the biggest gain I remember since I started doing this.  And the last two days have erased almost all of last week's sickening declines.

The technicals

The Dow:  I figured we were going higher on Thursday but after Wednesday's nice rally I didn't think Mr. Market still had that much gas in the tank.  But Thursday's action rocketed us right out of the recent ugly descending RTC for a bullish trigger, solidified the bullish stochastic crossover, and kept the indicators rising off oversold.  So with two big white soldiers on the march, this chart looks like Santa's not done delivering presents to all the good little traders.

VIX daily

The VIX:  This is quite extraordinary.  Last night I wrote "The pattern looks amazingly similar to what we saw back in October. ...If this holds up, we should be in for more declines on Thursday."  Now look at how it turned out on Thursday.  On October15th we had a long-legged star trading above the upper BB, just like December 16th.  On October 16th, we got a tall red marubozu dropping back under the upper BB, just like yesterday.  And on October 17th, we got a gap-down doji star, just like today (Thursday)!  Even the indicators are all in the same relative positions.  This is how the VIX trades.  I hate to say never, but I've never seen this fail.  In any case, this chart looks good for some more downside on Friday.

Market index futures: Tonight, all three futures are higher at 1:09 AM EST with ES up  0.53%  On Thursday ES put in the best one day gain I've ever seento leaves its descending RTC in the dust for a bullish trigger and sent the indicators steadily marching away from oversold.  You'd think Mr. Market would be kind of pooped after such a massive two day run, but no, not only are we up significantly in the overnight, we're back to flirting with record highs just under 2079, a level that looked like ancient history just a few days ago.  We've now retraced the entire week-long oil induced tumble.  And it appears that this rally isn't done yet.

ES daily pivot: Tonight the ES daily pivot zooms from 2001.33 to 2047.92.  And even with that massive gain we're still well above the new pivot so this indicator continues bullish.

Dollar index:  Even the dollar managed a 0.17% gain on Thursday with a little gap-up star that came close to its upper bB.  That's a reversal hint but one which requires confirmation, especially with indicators still not yet overbought.

Euro:  And the euro lost again on Thursday for a bearish RTC trigger along with falling indicators.  I'd say we're headed to the lower BB at 1.2257 on Friday.

Transportation:  On Thursday, the trans, like everything else had a great day gapping up out of their descending RTC for a bullish setup and confirming Wednesday's hammer.  Indicators all rising off oversold make this chart look bullish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   4       2      5           1       0.714    229
     And the winner is...

I really think Mr. Market deserves a rest after rallying furiously for two days but it looks like there's just no stopping him.  With the Dow and SPX back near record highs, I think he's going to want to take another look at those levels.  We could see a topping day but since I don't see any bearish signs anywhere, I've got to call Friday higher.

That's all she wrote.  Reminder - I'm taking all of next week off due to the extended major holiday for Christmas.  See you again Sunday the 28th.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

Thursday higher

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

• Thursday higher, low confidence.
• ES pivot 2001.33.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night I was seeing a lot of indications that we were due for a reversal but I wasn't willing to commit to it because it had been such a losing play recently and of course because Wednesday was a Fed day and I always call those uncertain.  Too bad too because the Dow put in a big 288 point pop and that changes the picture.  So let's take a look at how as we continue to count down the waning days of 2014.

The technicals

The Dow:  The Dow was already on a decent technical rally on Wednesday when the Fed announcement hit and after that it was up up and away to finish the day with  a 1.69% gain, the first in four days and the biggest in over a year.  This had the eff3ect of finally forcing a bullish stochastic crossover, causing a bottom in RSI (though it's still oversold) and finally unsticking us form the lower BB - all bullish signs.  We're still in the descending RTC but just barely.  Everything else being equal (which it rarely is) this chart now looks bullish.

VIX daily

The VIX:  Last night I wrote "I still have to think that the VIX is going lower on Wednesday" and hey presto so it did, down a big 17.52% off highly overbought indicators with a big red marubozu.  We now have a bearish stochastic crossover in place andwe've finally broken away from the rising upper BB.  The pattern looks amazingly similar to what we saw back in October.  See if you don't agree:  Compare the action on the left side of this chart to the right.  If this holds up, we should be in for more declines on Thursday.

Market index futures: Tonight, all three futures are lower at 12: AM EST with ES down 0.16%. ES had a spectacular day on Wednesday with a giant green marubozu that broke away from the lower BB and managed to just exit the descending RTC for a bullish setup and confirm Tuesday's inverted hammer.  The bullish stochastic crossover is now complete and all the indicators have started to rise (finally) off oversold so technically this chart now looks bullish


ES daily pivot: Tonight the ES daily pivot jumps from 1985.92 to 2001.33.   That puts us back above the new pivot for the first time in a while so this indicator now turns bullish.

Dollar index: The dollar had its best day since June 2013 with a 1.17%  green marubozu that confirmed a bullish stochastic crossover, brought the indicators off oversold and formed something of a big morning star,.  This all looks bullish to me.

Euro: Meanwhile the euro had its biggest drop since September 4th, to close at 1.2337.  That ends its recent rally, confirms the bearish stochastic crossover and send all the indicators down off overbought.  The euro though has shown a propensity for DCB's following big losses though so I'm not touching this one tonight.

Transportation: The story was pretty much the same on Wednesday with the trans which put in a 0.84^ gain on a big hammer that caused a bullish stochastic crossover and bottomed all the indicators on increased volume.  Now this looks like a reversal to me.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   3       2      5           1       0.667   -192

     And the winner is...

Technically the charts all suddenly look bullish.  My only concerns at this point are that this is an op-ex week and Friday is quadruple witching.  And we're not seeing any positive pin action in the overnight futures.  It's also not uncommon to see the market take a pause after such a big one day gain.  But all in all, I think it's not unreasonable to call Thursday higher.  Of course if there's more chicanery around oil on Thursday all bets are off.  But I'm not expecting a triple digit loss.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

Wednesday uncertain

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

• Wednesday uncertain.
• ES pivot 1985.92.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Holy moly - I think "uncertain" was absolutely the right call for Tuesday after a triple digit roller coast ride both up and down.  But in the end, the selling just continued.  Will Santa Claus come to the rescue?  It's getting to be about time to ask that.  Maybe the charts have the answer (or maybe not).

The technicals

The Dow:  The Dow just continued its sell-off Tuesday down another 112 points, this time on a big inverted hammer.  But reversal candles are meaningless lately so what else have we got?  Well there's RSI which at 6.21 is now extremely oversold.  And the stochastic's %K line is 2.54 - doesn't get much lower than that.  But also the 200 day MA is now moving into view at 16,861.  This whole pattern is now looking a lot like early October and that didn't end til we'd broken under the 200 MA with a couple of big dojis.  So for now we continue riding the lower BB down locked in a steep descending RTC.  No bullish signs here.

The VIX:  The VIX is looking even more like October than the Dow with a big 15% gap up long-legged doji star on Tuesday.  Back in October (10/15 to be exact) that marked the beginning of the end.  The next day saw a big blow-off top and then down we went.  And interestingly, oil had begun a steep leg lower at exactly the same time, just like now.  We actually have a completed bearish stochastic crossover in the VIX and VVIX already peaked two days ago..  I know this market has really gone off the rails but I still have to think that the VIX is going lower on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:43 AM EST with ES up  0.28%.  ES had yet another lousy day Tuesday, ho hum, and seems to be trying to rally in the overnight, just like last night and we all know how that ended.  I can't rely on overnight moves anymore  the way I used to.  But RSI appears to have bottomed at extreme oversold and OBV took a turn higher   So there might be good news here but with the VIX pushing 24 we need some real confirmation before calling a rally.

ES daily pivot: Tonight the ES daily pivot falls again from 1996.92 to 1985.92.  And we once again remain below the new pivot so this indicator remains bearish.

Dollar index:  Interestingly, the dollar took a big gap down, off 0.43% on Tuesday breaking support at 59.86. to hit oversold and just north of its next support at 59.40.  Does this mean a move higher?  Not in this Kafkaesque market.  Who knows.

Euro:  The euro meanwhile continued its recent rally to end at 1.2495 on an inverted hammer that just touched its upper BB and hit overbought.   It still might be able to push higher from here, but the euro is looking a bit tired to me right now.

Transportation:  The trans just laughed at Monday's doji and resumed their march lower, down 1.32% in a move I just do not understand.  You'd think lower oil prices would help this sector.  But anyway down we go with no end in sight despite way oversold indicators.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   3       2      4           1       0.667   -192

     And the winner is...

Well once again we're seeing a lot of good reversal signs, especially from the VIX.  I'll note too that the Morningstar Market Fair Value index has now gone below 1 - to 0.99.  And the SPC Hi-Lo indicator has now gone to a very low reading - 15.22.  The last time we were around these levels was in mid-October and that marked the end of the early October slide.  And we also had falling oil back then too.  And a VIX above 25.

So what I'm thinking is that Wednesday will be a blow-off top in the VIX and then he market will begin to move higher, perhaps on a hammer.  That would time nicely for Santa Claus and his rally - assuming he bothers to show up this year.  But then we've still got that pesky oil problem so once again I'm calling Wednesday uncertain until things calm down a bit.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.