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.