Wednesday, January 15, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 1826.67.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Arrgh!  Tuesday's 116 point pop in the Dow helped propel the Night Owl to my worst prediction performance ever, now an abysmal 0.167 average for the month so far.  At least I resisted the temptation to go short last night.  But trading is a game of persistence if nothing else.  I'm reminded of the time I went to Vegas to play blackjack, played a perfect basic strategy and still lost five hands in a row thus wiping me out.  Fortunately, I'm a bit better bankrolled here today so we soldier on to see if we can finally get one right for Wednesday.

The technicals (daily)

The Dow: The Dow recouped more than half of Monday's losses on Tuesday.  In fact it was almost exactly a perfect 0.618 Fibonacci retracement, if you're into that sort of thing.  This tall green marubozu is bullish ad it brought the stochastic very close to a bullish crossover.  The other indicators have also bottomed at oversold so this chart suddenly turns bullish again.

The VIXMeanwhile, I was wrong about the VIX which dropped 7.53% on Tuesday.  The bullish RTC trigger failed to produce and we now have a bearish harami.  But indicators remain just off oversold.  I've been burned so badly with this chart this month I'm not touching this one tonight.

Market index futures: Tonight all three futures are basically unchanged at 12:44 AM EST with both ES and NQ dead even and YM up just 0.03%   We got a big retracement in ES on Tuesday leaving us back in the congestion zone form last week.  The indicators are kind of bouncing around in No Man's Land between oversold and overbought, so no help there.  This chart is too tough for me.

ES daily pivot: Tonight the pivot rises from 1821.08  to 1826.67.  This move, plus the ES's rise above the pivot at 10 AM on Tuesday leaves this indicator bullish tonight.

Dollar index: And I missed the dollar call for Wednesday too as it put in a small gain for a bullish harami.  The stochastic is now down to levels from which bullish crossover start so I'd say this chart is now looking mildly bullish.

Euro: Amazingly, I managed to get both the dollar and the euro wrong for Tuesday, as the euro posted  a tiny gain on a second doji in a row.  But maybe I was just a day early because the euro is now falling hard in the overnight, down 0.28% so far.  So now it's looking bearish for Wednesday.

Transportation: The trans are now in yo-yo mode with a big 1.29% nearly erasing Monday's losses and after all that action leaving us just about where Friday closed.  It's not making much sense, technically so I have no opinion here.

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    1      5      3           0       0.167     -250

     And the winner is...

I really really wish that the people from the Fed would just shut up outside of Fed meeting days.  It really throws a big monkey wrench in the technicals.  And having been wrong, what, now four days in a row, I'm outta here - Wednesday uncertain.  That's all she wrote.

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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