Thursday, February 27, 2014

Thursday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain.
  • ES pivot 1844.42.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Quote of the Day
"It's hard not to think that the real problem in Bitcoinland isn't denial-of-service attacks. It's denial."
      -  The Economist, on Bitcoin (whatever the heck that is) after the collapse of Mt. Gox (whatever that was).


Another one of these zig-zaggy days on Wednesday as the Dow gave up some AM gains in early afternoon selling but managed nonetheless to recover by the close to save my call for an up day.  So on we go to Thursday as we tackle tricky tactical technicals (say that three times fast).

The technicals (daily)

The Dow: The Dow has now given us two spinning tops in a row but no break lower.  With Wednesday's being something of a bullish harami and RSI now off overbought, it would seem not entirely implausible to get another leg higher form here.

The VIXHuh - I thought the VIX might visit 13.44 on Thursday but no such luck as it actually gained 5% in an unusual positive correlation to the market with a bullish one-white soldier candle.  Nonetheless we remain in a descending RTC and the stochastic is not yet in position for a bullish crossover.  That said, I now think the VIX may want to take a peek at its 200 day MA again on Thursday at 14.64, this time as resistance.

Market index futures: Tonight all three futures are higher at 12:05 AM EST with ES up by 0.18%. Wednesday's ES candle was a wide-ranging bearish engulfing spinning top.  The indicators seem to support a reversal from here as they continue drifting lower off overbought, but the pin-action tonight suggests otherwise and we do remain inside a week-long rising RTC.  So with mixed signals, this one's a push.

ES daily pivot: Tonight the pivot barely moves from 1844.83  to 1844.42.  We're still above the new pivot, though not by much, so for the time being this indicator is bullish, just barely.

Dollar index: I missed this one completely with the dollar gapping up 0.37% on Wednesday, not moving lower.  We're now out of a month-long descending RTC but this chart is just too herky-jerky for me, especially with indicators neither overbought nor oversold..

Euro: The euro finally broke out of its week-long consolidation and after five dojis in a row it took a big dump on Wednesday down to 1.3683.  That drove RSI oversold but the stochastic is still falling.  Support at 1.3697 is now resistance so I wouldn't be surprised to see at least a bit more downside, though honestly, this chart is really too tough to call.

Transportation: A bit of bearish divergence here as the trans lost 0.25% on Wednesday while the Dow gained 0.12%.  It was on a spinning top but it also formed a bearish stochastic crossover, so more downside could be coming here.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
February   5       2      1           0       0.714     58

     And the winner is...

With not just a lack of clear direction but a number of contradictory signals in the charts tonight, I'm afraid I'm just going to have to declare Thursday uncertain.  Maybe a more clever technician than I can make sense of this mish-mosh, but I can't - and I'm not going to lose any sleep over it.  There's no need to play these low percentage plays.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

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