Friday, March 7, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 1876.08.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

The technicals worked out well on Thursday as the Dow gained another 62 points, pretty much as I'd expected.  So as the first week of March draws to a close, let's see now where Friday is headed.

The technicals (daily)

The Dow: Thursday's action was quite bullish, canceling any doubts I was having last night with a bullish engulfing candle that pushed us back into the middle of the rising RTC,  It also brought out a bullish stochastic crossover from a high level, quite a bullish sign at least for a day or two.  So with the upper BB still about 100 points away, this chart remains bullish.

The VIXLast night I wrote "I expect the VIX to at least take a look at [13.65] on Thursday" and that almost happened as the VIX bottomed at 13.73.  But the VIX ultimately rose 2.30% in an unusual correlation with the Dow which was also higher.  This bullish engulfing candle makes me think the VIX could now go higher again on Friday.

Market index futures: Tonight all three futures are higher at 12:47 AM EST with ES up by 0.15%.  Little has changed since last night - we remain in a rising RTC and I still think we're headed to the upper BB, now at 1888.

ES daily pivot: Tonight the pivot rises yet again from 1871.92  to 1876.08.  And once again we remain above the new pivot even as it continues higher, so this indicator is still bullish.

Dollar index: On Thursday the dollar took a big dive, down 0.56% and surprising me greatly as I was thinking it would go higher.  We not only cratered out of the rising RTC but also broke support at 54.68 (remember, this is the $USDUPX, not $DXY).  It also drove RSI lower and formed a bearish stochastic crossover.  But we just barely bounced off the lower BB so given the magnitude of the day's decline, it's possible we could get a bounce on Friday.

Euro: And then of course as the dollar floundered on Thursday, the euro took off, busting right through resistance from last October to close above its upper BB at 1.3861.  So I was of course wrong about this too.  Now the euro has been taking profits after big run-ups lately so I'd have to guess that's what will happen on Friday.

Transportation: On Thursday the trans continued to climb their upper BB with a nearly 1% green marubozu.  We are now just off resistance at 7570 so with the indicators now moderately overbought, Friday is do or die day to see if we can make another push higher.  I'm not sure there's enough gas left in this particular tank.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
February   5       2      2           1       0.750    107

March      3       0      1           0       1.000    444

     And the winner is...

The overall technical picture remains bullish tonight as the bears are all MIA.  Therefore, I can only call Friday higher.  The trend is your friend, as they say.  Happy weekend and see you again Sunday night!

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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