Thursday, March 6, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1871.92.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
This is the Night Owl's 1000th post!

I know it seems hard to believe, and I wasn't at all sure I'd make it even one year when I first started this blog over four years ago but here we are in 2014, and still going strong publishing every night before a market day (well except for when the Olympics are on).  Many thanks to all my readers for their continuing support, and we'll see you again for number 2000.


I believe it was correct to call Wednesday uncertain as the Dow ended the day down a scant 36 points.  Now let's see if we can get a better sense of direction for where Thursday's going.

The technicals (daily)

The Dow: This is pretty much what I expected - what's the inverse of a dead cat bounce?  The Dow put in a lackluster small-range red candle at the top of Tuesday's monster pop.  Technically, that was just enough to fall out of the rising RTC for a new bearish setup.  The indicators remain vague and indecisive, wandering about just below overbought so it's hard to give them much credence here.  But there's at least a hint of reversal now but one that requires confirmation so bzzzt - no call on this chart tonight.

The VIXLast night I wrote "more downside now seems possible Wednesday" and that possibility came to pass as the VIX dropped another 1.5% on Wednesday.  We are now approaching a level of aupport at 13.65 but in the absence of any bullish signs, I expect the VIX to at least take a look at that number on Thursday.

Market index futures: Tonight all three futures are higher at 12:38 AM EST with ES up by 0.12%.  Last night I wrote that I expected a "small range or doji day" and ES delivered a perfect spinning top on Thursday right at the upper end of Wednesday's big pop.  But the new overnight isn't confirming that as we continue to trade inside the rising RTC.  And the indicators are only just barely overbought while the stochastic has actually formed a bullish crossover from a high level which is generally good for a day or two of further gains.  So this chart moves from indecisive back to bullish again.  The upper BB, now at 1888 is still not out of the question.

ES daily pivot: Tonight the pivot rises once again from 1863.25  to 1871.92.  Once again we remain above the new pivot so this indicator continues bullish.

Dollar index: Huh - I though the dollar would rise on Wednesday but instead it lost 0.08%.on a stubby spinning top.  We're still in the rising RTC and still have a newly minted bullish stochastic crossover so I still have to believe the dollar's going higher.

Euro: OK, we now have a pattern here. I believe I detect a descending triangle with a base around 1.3736.  This is a pretty good play that when the break comes, it will be lower.  Just sayin'.  That also squares with my call for a higher dollar.

Transportation: In a show of strength, on Wednesday the trans managed to extend Tuesday's huge gains another 0.32% even as the Dow closed down 0.22%.  This is, to me, quite impressive.  We're on the upper BB now but the trans have shown an ability to crawl up this line for quite a while.  And with no resistance now til 7571, it sees like there's more upside left.

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      2       0      1           0       1.000    382

     And the winner is...

Tonight the charts are generally looking at least mildly bullish and there's really a general absence of bearish signs, so I guess I just have to call Thursday higher.

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.


  1. The market doesn't want to reward shorts, but day traders may get something out of today's tight range. If the trade can survive the morning session it could be a nice trade.

  2. A thousand thanks to you four your generous time, energy, enthusiasm, smiles and the money I’ve made.

    1. Thanks for the kind words. The NIght Owl is always happy to hear that.


Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.