Friday lower

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

• Friday lower, low confidence.
• ES pivot 1827.33.  Holding below is bearish.
• Next week bias uncertain.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside

Recap

Finally, I got one right. My call for Thursday lower played out, as well as my reading of every individual chart I looked at.  But we will avoid committing too much hubris here and simply move on to Friday.

[Note: the Blogspot spell checker is on strike again tonight, so I apologize in advance for any typos.]

The technicals (daily)

The Dow: Last night I wrote "there's more downside to come on Thursday." and did it ever come - down 176 points for its worst one-day loss since last August.  That broke support at 16,263, completed the bearish stochastic crossover, and busted through the lower BB but did not drive the indicators oversold yet.  So we might still see some more selling on Friday.

The VIX:  Last night I wrote that the VIX "now at least seems to be wanting to move higher" and on Thursday it put in an unusal gap-up gravestone doji that just touched its 200 day MA before retreating.  Although the indicators ar enot yet overbought, this is bearish for Friday.

Market index futures: Tonight all three futures are lower at 12:42 AM EST with ES down by 0.14%. Last night I noted congestion in ES and wrote "we may be setting up for a move lower out of this range" and that's just what happened on Thursday with ES taking a decsive dump to send the indicators lower.  And with some negative pin action in the overnight, the selling may not be over yet.

ES daily pivot: Tonight the pivot drops from 1838.83  to 1827.33.  We remain below, so this indicator remains bearish.

Dollar index: I didn't call the dollar last night, which was good because I sure didn't see a one percent drop coming on Thursday.  This big gap-down marubozu took the indicators off overbought and broke a couple of support levels.  But with this big gap, a DCB isn't out of the question on Friday..

Euro: Last night I wrote "the euro is ready to move higher" and boy did it ever, up a whopping 1.11% on Thursday to blast right out of its descending RTC and clear past resistance at 1.3515.  And even that wasn't enough to drive the indicators overbought.  But after such a big move, I'd expect a pause on Friday.

Transportation: Last night I wrote "more upside is not out of the question" here and indeed we got another 0.28% out of the trans on Thursday as the bullish divergence continued.  But now it's hard to say.  With the indicators pretty overbought and the trans clinging to their upper BB, we don't have a reversal candle, but a move lower could come at any time.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    2      8      5           0       0.200     -224

     And the winner is...

I don't know - after such a big move down, it's tempting to call for a DCB, but with all the charts continuing to look bearish, I'm afraid I'm just going to have to call Friday lower.  See you again Sunday night.

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.