Wednesday, January 8, 2014

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher, low confidence..
  • ES pivot 1828.33.  Holding above is bullish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

It was a long shot, but one that underscores the importance of watching the VIX and the futures.  While the Dow daily chart was looking decidedly bearish last night, the other signs were bullish so I called Tuesday higher and that's all it took to finally get us on the scoreboard for 2014.  Now let's see if we can bat one in for Wednesday.

The technicals (daily)

The Dow: The Dow's big 106 point pop on Tuesday was just enough to take it all the way to the right edge of its descending RTC for a bullish setup.  It also turned all the indicators upward and set up the stochastic for a bullish crossover.  So that's the difference a day makes - this chart now looks bullish.

The VIXLast night I wrote "this chart looks continued bearish" and sure enough the VIX dropped another 4.65% on Tuesday.  It admittedly formed a funny gap-down green candle but with a fresh bearish stochastic crossover and the lower BB not til 11.68, it looks like there's still room to run lower here.

Market index futures: Tonight all three futures are higher at 12:15 AM EST with ES up by 0.10%.  Tuesday's tall green candle in ES completed the bullish RTC setup I mentioned last night and it also completed the bullish stochastic crossover.  Indicators remain low and there's no resistance til 1836 so I see more upside here for Wednesday.

ES daily pivot: Tonight the pivot rises from 1823.50  to 1828.33.  We remain above that number so this indicator remains bullish.

Dollar index: I did get the dollar wrong on Tuesday - I thought we'd see lower but instead it gained 0.22%.  That leaves us in a trading range with no RTC and indicators  that are not at either extreme, so there's little to go on here and consequently I'm not going to call this one..

Euro: And of course I was wrong about the euro which moved lower on Tuesday..  It is now, like the dollar, similarly conflicted with no clear direction so we'll just have to let this one be and see if Wednesday provides us with clearer guidance.

Transportation: And finally, the trans had a nice 0.74% gain on Tuesday with a bullish inside harami that moved the stochastic into position for a bullish crossover.  It wasn't clear last night, but support around 7240 held, so this chart now turns bullish.

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    1      2      1           0       0.333     -58

     And the winner is...

Tonight there seems to be a general bullish consensus among the various charts so the logical call is for Wednesday higher.

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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