Tuesday, January 21, 2014

Tuesday - higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1833.00.  Holding above is bullish.
  • Rest of week bias uncertain.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside

The market concluded its nervous jiggling about last week with a win for the Dow but losses for the Nasdaq and SPX.  With this sort of action, is it any wonder I called Friday "uncertain".  Now we're starting  a holiday-shortened week.  If I had any sense I'd just take a vacation this week.  So instead on we go, to examine the charts, such as they are.

The technicals (daily)

The Dow: Last Friday the Dow continued its semi-random jiggling by retracing most of Thursday's retracement of Wednesday's retracement.  Indicators continue vacillating midway between overbought and oversold, there's no RTC or stochastic crossover so this chart is totally devoid of guidance.  I there's a pattern in here, I don't see it.

The VIXThe VIX is similarly conflicted, putting in on Friday a green spinning top that nonetheless was a 0.72% loss.  We do at least have a descending RTC going, though it's wide and not very focused (Pearson's = only 0.870).  My guess is that the VIX may go lower Tuesday, but only because it doesn't seem terribly interested in moving higher.

Market index futures: Tonight all three futures are higher at 12:23  AM EST with ES up by an impressive 0.40%. Monday's trading yielding something very close to a dragonfly doji which is a very good reversal indicator.  And the overnight candle is confirming this in a big way, bringing ES all the way back to resistance at 1842.  But with indicators still a ways from overbought, we may have enough momentum to continue at least a bit higher from here.

ES daily pivot: Tonight the pivot drops from 1838.17 to 1833.00.  That move plus the big jump in ES now leaves us well above the new pivot to make this indicator solidly bullish.

Dollar index: After putting in candles with tails pointing in opposite directions last week, the dollar finally managed  a decent 0.42% gain to hit its upper BB.  But even that did not drive the indicators overbought so more upside could be coming on Tuesday..

Euro: On Monday the euro gave us a fat hammer with a small gain.  The overnight is retracing the same ground but support at 1.3529 is firming up nicely.  With indicators now oversold and the stochastic positioning for a bullish crossover, I'd look for the next move to be higher.

Transportation: The trans moved lower last Friday on a red hammer.  But I wouldn't put too much faith in this since we also got a bearish RTC trigger and the indicators have now peaked at overbought.  More downside seems possible from here.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    1      6      5           0       0.143     -315

     And the winner is...

Tonight the majority of the charts seem to have turned bullish, so I'm going to call Tuesday higher.  And I'm going out on a limb here because this week is historically terrible.

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.

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